The head of the Higher Education Funding Council for England has said that “Universities need to develop a new narrative of how higher education creates value” in order to continue attracting funding.In this essay I will discuss the role of narrative and examine what lessons we can take from the recent banking crisis?
Banks were touting the importance of their role in a country’s economy long before the crisis and said they helped create strong economic growth,so it looks like the banking industry is making bankers richer, which might sound bad. But the benefits to both customers and banks might outweigh those losses. Banks would be more efficient and customers would get better service. That helps growth in other sectors and even manages risk better by trading 24 hours a day.Banking leaders even argued that they were doing ‘God’s work’. The theory was that this would not create risk for the economy as a whole because markets, being self-regulating, have built-in controls against overleveraging. As one Nobel-Prize winning economist, Merton Miller, stated, it was not worth worrying about second-order, self-correcting problems like financial leveraging, because theory demonstrated that this could not happen.
Find out where the best bank is for you, make a list of your needs and contact them. Ask about what features you are looking for and make sure their service is a perfect fit. It seems reasonably clear what this might comprise. First of all comes culture change – a return to traditional banking values re-focussed upon service and customer relationships – and a call to liberate banks from the dominance of an investment banking mind-set where the priority is generating profit through short-term trading rather than investing in the long-term future of clients and the economy. Banks are dealing with a breakdown of the public’s trust. This unmet need can be solved by creating long-term relationships with your clients instead of just continuing with shortsighted goals for sales and numbers. It starts with a focus on equality, which looks to combat this issue with modern techniques.
There are possible parallels with higher education here. For example, David Willetts maintains that universities need to give better value for money and provide a better level of engagement. The debate around the student experience suggests that at some universities students have become a means rather than an end and that student fees, particularly international student fees, are treated as capital to be leveraged, with a lack of transparency about how they are contributing to an improved student experience. This perception is likely to become more intense as home and EU student fees rise and students become more vocal in criticising a perceived weakening of their social contract with the university. As with the banking sector, I predict a growing demand for culture change.
One major challenge for university leaders will be to work out how to deliver better service in a culture where research is prioritised before teaching by many of its staff and funders. There is a genuine confusion about the role of the university. Its funders, government and students, have expectations that do not sit easily with current ‘business practices’. The danger is that an overly simplistic narrative of its role runs the risk of alienating its consumers. Economic growth, particularly at a time of deteriorating business conditions, will prove a difficult yardstick for universities to meet. Employability, a growing concern for students, will also be very difficult to deliver in our current austerity conditions. A common theme uniting protestors from the Arab Spring to the Occupy Wall Street and the Occupy the City movements is an increasingly educated and vocal youth with dwindling life chances expressing their sense of betrayal. The banks encouraged people to buy products – sub-prime mortgages being the worst example – that promised much but actually delivered unsustainable debts. Let us hope universities do not come to be seen in a similar light.
Effective narratives achieve two things. They are credible and they help people make sense of the world. In troubling times universities still have much to offer in terms of helping students make sense of the world. This part of their historical mission must not be allowed to fade away under the pressure of pure economic justification. Economy needs balancing with society and culture, giving universities a key role to play beyond ‘employability’ in helping students create a viable and sustainable sense of identity. A key challenge for banks and other forms of business beyond banking – both the pharmaceutical industry and the news media also stand accused of abusing their power – is to demonstrate how they create value for their customers and why customers should trust them. Universities also have to face this challenge. It is not clear yet what new narrative will be believable or trustworthy.
In my own area of the university, the business school, there has been much debate about the financial crisis, not least because it was the theories of finance and globalisation created and championed by the business schools and economics departments of leading US universities that created the narrative that helped lead to the crisis. It was the graduates, the MBAs from top business schools, who became the shock troops of the investment banks and other firms purveying the ideas of a new financialised economy. More enlightened business schools are working with business to challenge the crisis of trust that they, and many businesses, now face1.
The banking crisis is widely perceived to reflect a failure of business and academic leadership. Business leaders such as Paul Polman of Unilever argue that we need a new model of business and a new sort of values-led business leadership that reflects and is responsive to the complex interdependence of healthy business and healthy society. The challenge for business schools is to work with the business leaders of the future to create the knowledge and the management practices that best align individual, business and societal interests, thus regaining the trust of stakeholders, and to educate students who embody and enact more sustainable business practice. Coordinating with your stakeholders is one of the keys to creating a narrative that is both feasible and coherent. This can be difficult as there are conflicting opinions when it comes to this issue.