Wednesday, March 09, 2016


True in Both Directions

I wasn't surprised to read that a majority of college presidents say that people from outside of higher education are less likely to be successful at leading colleges.  Flip the question around and nobody would argue.  Would a lifetime academic be likely to be better at running a Fortune 500 company than someone from within the industry?  

Of course not. The rules of engagement are different.  But for some reason, recognition of that seems to run mostly in one direction.

Part of it, I think, is that most people don't give much thought to the difference between running a public college and running a public company.  Their goals are different, their cultures are different, and their accountabilities are different.  I saw the clash firsthand when I worked at DeVry, which tried to be both a college and a company.  At the time -- and I don't know if this is still true -- it finessed the clash by having different reporting lines: the admissions office on campus didn't report to the campus president.  It reported directly to Home Office.  "Sales" (meaning admissions) and "operations" (meaning academics) had different bosses, even on the same campus.  

When enrollments were climbing, it sort of worked.  Yes, there were clashes around allowing students who had flunked out to re-enroll, but those were mostly on the margins.  But when enrollments started to drop, and the two sides clashed over which way to go, "sales" always won.  Growth papered over all sorts of conflicts, but when the growth reversed itself, the conflicts came roaring back, and the “sales” side always won.

Colleges are less like most businesses than they are like local governments.  They can’t just pursue money, or any one good.  They have to balance multiple and conflicting goods in the service of a mission that’s both inspiring and hard to measure.  Shared governance carries a weight in higher education that it doesn’t in most corporations.  (Political scientists will recognize interest-group politics in the context of many curricular battles.)  The stakeholders in higher education are far more numerous, and hard to isolate, than shareholders in a corporation.  And in public higher ed, the tension between “shared governance” as shared among members of a campus community and “shared governance” as in sharing with state and local governments raises issues very different from those typically faced in corporate America.

And that’s before addressing, say, tenure and unions.  In the private sector, unions are the exception at this point, and tenure is simply unheard of.  In public higher ed, they’re both common.  From a management perspective, they change the game fundamentally.

Corporate and collegiate cultures have their own logics and their own virtues.  At their best, corporations are insanely productive; at their worst, they’re predatory.  Their wealth comes at the expense of stability.  At their best, colleges provide spaces for reflection, experimentation, and learning.  At their worst, they’re insular and sclerotic.  Their stability comes at the expense of speed.  Each sector has its place, but they’re different -- and rightly so -- because they serve different purposes.

Trustees more often come from the business world than from the education world.  In an unfamiliar setting, it can be tempting to go with what they know.  Presidents who speak “business” can “sound right” to trustees who haven’t taken the time to think through what makes the sector different.  That works until it very much doesn’t, as in the case of Simon Newman.  Applying the logic of one sector to the innards of the other tends to end in tears.  Worse, the people doing the damage honestly think they’re right.  That’s why they keep going until forced to stop.  

Leaders in higher ed -- and especially public higher ed -- have to be fluent in both idioms.  If they can help trustees, politicians, and other stakeholders understand education’s needs in terms that make sense to them, everyone can win.  But pretending that a college is a car dealership does justice to neither.  And that’s true in both directions.

It is indeed true that the culture of a nonprofit college or university is quite different from that of a typical for-profit corporation. Unlike colleges or universities, most corporations do not have to deal with the issues surrounding tenure, academic freedom, or shared governance. Contracts that guarantee employment during good behavior are very rare in the corporate world--there is generally no such thing as tenure in the corporate environment, and employees are largely at-will and can be fired or laid off for any reason whatsoever, or even for no reason at all. Employees generally do not have the right to criticize or dissent from official corporate policy, especially in public. There is little shared governance in the corporate world, and lower-level employees usually have little or no say in the formulation of company policies. And unions are becoming less and less prominent in corporate America, although they are prominent actors in many colleges and universities.

As Matt points out, there can be problems when a person with a corporate background is named as a college or university president. They grew up in a corporate environment, one in which they got used to a top-down management structure, one in which they gave orders and had them obeyed without question. In the corporate world, company policy is established by the top management, and lower level employees are expected to carry it out without dissent. The goals of a profit-making corporation are quite different from the goals of a nonprofit college or university. The goal of a corporation is to make a profit and to keep the stock price high, whereas the goal of a nonprofit college or university is to increase knowledge and to educate the next generation of citizens so that they can become productive citizens in a democracy. It is true that a college or university has to bring in money to sustain its operations, but making money is not its primary goal.

College presidents with a military background can have similar problems—they are used to barking out orders and having them instantly obeyed. Such a strategy often does not work very well in an educational environment, especially one in which tenure, shared governance, academic freedom, and strong faculty unions are prominent features. Faculty members, especially those with tenure, would not react very favorably if the college president treated them as if they were fresh recruits in boot camp.


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