Higher Education is one of Whitecap’s areas of specialist expertise. In this blog, our HE lead Lal Tawney shares his thoughts on the challenges facing the sector and the priorities that senior leaders of UK universities should be considering for 2020 and beyond.

Introduction

With the student recruitment cycle for 2019 now complete, University Vice Chancellors will be focussed on 2020 and beyond. There are high levels of turbulence and uncertainty both in the UK and in the Higher Education sector within the UK. However, Vice Chancellors have to get on with the “basics” which include driving up teaching quality, managing research quality, improving the student experience, and maximising student completion rates. And then there’s the additional very broad range of “challenges” that Vice Chancellors face including the growth of mental health issues amongst students, the excessive use of unconditional offers as a recruitment tactic, the evolution of new “products” such as apprenticeship degrees and 2 year degrees, the issue of social inclusivity of the sector, the pensions deficit and the required corresponding rise in Employer pension contributions, and the need to develop a truly sustainable campus, to name but a few.

Having the privileged position of advising universities, we’ve considered what Vice Chancellors and their teams should prioritise for 2020 and beyond. The focus is about balance – considering growth, financial sustainability, and futureproofing the university – here are our recommendations.

1. Growth: Consider Further Education as a Diversification Opportunity

The role of the wider education sector is changing. The way we work, and study, needs to be flexible to meet the needs of individuals and the economy.  It has been recognised that the government, universities, employers and further education providers need to work much more closely than they have done in the past.

The further education market has been neglected. To support the focus on the skills gap and social mobility, the Chancellor last month confirmed £400 million of extra funding would be channelled into further education in England, after saying that “for too long further education has been a forgotten sector”.

Vice Chancellors will need to evaluate the strategic opportunities within the further education market. Potential opportunities to diversify include:

  • taking advantage of existing university assets and advanced technical facilities which are needed to teach specific vocational subjects/courses that may have been traditionally taught at further education colleges, or
  • collaborating with further education colleges to provide joint propositions and qualifications.

2. Growth: Take Advantage of the International Opportunity

The UK is a world leader in higher education. The UK continues to be the second most popular global destination for international higher education students. International higher education student numbers in the UK have increased since 2011 and are now at record highs, and there continues to be no limit on the number of students who can come to study in the UK. HM Government have outlined their ambitious target to grow the numbers of international higher education students studying in the UK to 600,000 by 2030.

The demand for quality higher education continues to grow. However, the USA, Australia, Canada and New Zealand have been competing hard to recruit international students – and have taken advantage of this growth and successfully, like the UK, increased their international student numbers.

Vice Chancellors will need to ensure they have deliberate strategies to take advantage of the international opportunities. Typical questions:

  • Which geographic market offer the best opportunities? What are the priority “focus” markets?
  • What is the competitive strategy in each of the markets?
  • What is the participation model in each market?
    • UK campus model
    • Partnership with a local university
    • Build own campus
    • Online distance learning

3. Financial Sustainability: Understand and Monitor the University’s Cost Base

The focus on value for money will continue in 2020 and beyond. There will be much discussion on what this means and how this is best measured.

However, the value that a student gains is partially a function of the University’s overall efficiency and effectiveness. This is not a new theme to the sector so Vice Chancellors and their teams should have a clear understanding of the cost of key activities of their university, and understand how these have changed over time and why. Typical questions that should be answered include:

  • What is the cost to acquire a new undergraduate student? How does this differ between different students (e.g. UK vs International)?
  • What is the cost to teach a student? How does this differ by programme or course?
  • What is the cost to provide non-academic support to a student?
  • What are the most expensive activities in the student experience?

The university that has great data on costs and a strong management focus on effectiveness is in an ideal position to eliminate inefficiencies and waste, thus being able to provide greater value to their students.

4. Futureproofing: Embrace Digital Transformation

Digital transformation is happening — Vice Chancellors need to determine how they embrace this to support their respective university strategies.

In many cases, the driver for digital transformation is to improve student experience and the level of services provided to students. This covers a broad range of opportunities including the effective use of online learning, the use of student analytics to understand and predict student behaviour, and to give students exposure to new “disruptive” technologies such as machine learning.

However, the transformation is not a “simple” IT project — the transformation and its benefits cannot be realised without looking at the operating model from a number of interconnected lenses:

  • What is the desired student experience (for each segment of students)?
  • What organisational processes are required to support the experience most effectively?
  • What are the requirements from university staff?
  • What it the optimum data design?
  • And finally, what are the technology requirements?

The transformation is also likely to take much of the organisation’s headspace — and the university will only be able to manage one or two large transformations at a time management. So, this needs to be a key focus for the Vice Chancellor for it to be successful such that the organisational culture as well as the necessary support for resourcing are given top priority.

5. Futureproofing: Embrace Market Differentiation

UK Universities are competing harder than ever before to recruit students, attract and retain staff, maintain and improve service and curriculum, and secure funding for research and innovation.

In this context, and to support the growth, Vice Chancellors need to consider to how they differentiate their respective universities such that they set themselves apart from the crowd. Certain universities have reputation (e.g. Oxford and Cambridge) which provides uniqueness; other universities have distinct propositions (e.g. Buckingham or The Open University) which provide uniqueness; however, there are many UK university brands could be easily interchangeable with other universities.

Vice Chancellors should see university and brand strategy as a mechanism for the successful identification and development of a brand in order to achieve university goals. In very simple terms, the more aligned the efforts of all parts of the university, the stronger the university brand will be.

In the past, brand management hasn’t been a topic likely to be discussed by the Vice Chancellor and the leadership team or Executive. However, as the operating environment and market economy becomes more challenging, now is the time to invest in the brand.

In Summary

Vice Chancellors and their teams will have lots to do to tackle the challenges that will come their way in 2020 and beyond. We recommended that the following are on the agenda for Vice Chancellors:

  1. Consider Further Education as a Diversification Opportunity
  2. Take Advantage of the International Opportunity
  3. Understand and Monitor the University’s Cost Base
  4. Embrace Digital Transformation
  5. Embrace Market Differentiation

We are keen to hear your views on these points, as well as your view of key strategic priorities in the HE sector. Please post your thoughts and tag ‘Whitecap Consulting’ (LinkedIn) or @Whitecapconsult (Twitter) or send Lal an email at [email protected]

 

Hopefully you’ve found this article useful. If you feel that your strategy development and strategy implementation process would benefit from independent review and challenge, please get in touch.

 Established in 2012, Whitecap Consulting is a regional strategy consultancy headquartered in Leeds, with offices in Manchester, Milton Keynes, Bristol and Newcastle. We typically work with boards, executives and investors of predominantly mid-sized organisations with a turnover of c£10m-£300m, helping clients analyse, develop and implement growth strategies. Also, we work with clients across a range of sectors including Financial Services, Technology, FinTech, Outsourcing, Consumer and Retail, Property, Healthcare, Higher Education and Professional Services, including Corporate Finance and PE.