Arguably, knowledge is the most important strategic resource in a university and the management of this knowledge is critical to sustainable success. If universities can capitalise on the knowledge they possess, if they understand how knowledge is created, shared, and used within and beyond the university, then this is the first stage of good knowledge exchange and value creation.
The second is to understand the dependency between relationships and knowledge (social/relationship capital and intellectual capital) and the third is to look at all the assets of the university using a multi capitals approach such as integrated thinking and reporting (a principles based framework), as a lens to help navigate the changing expectations of different stakeholders and to better articulate and demonstrate the value that you create for all stakeholders.
Even though universities are primarily about people, ideas and relationships, management focus is often on financial performance and inputs/outputs rather than holistic outcomes - this is much deeper and wider than value for money – it is about understanding the relationships between the resources available to a university, the stakeholders impacted by the activities of the institution, and the consequent creation (or destruction) of value across all activities.
Just as we would classify and characterise financial capital and perhaps intellectual capital, so institutions are likely to find that it is helpful to classify and characterise social and relationship capital. Universities are also starting to look at natural capital, for example, how our organisations can contribute to the UN Sustainable Development goals. It is hard to imagine an organisation which does not integrate its strategic thinking and decision making to take into account all these assets or resources, how they are used, their interdependencies and the value that is created collectively for all stakeholders.
However, through our work at Advance HE we have noted that institutions may need more help to enhance connectivity between senior leaders across the organisation and to think differently about how a range of strategies, from Teaching and Learning Strategy, to Sustainability Strategy/Estates Strategy, can be more joined up to create a more consistent and compelling narrative about the value that higher education creates.
Sometimes role differences, undertaking contrasting responsibilities with varying expectations and structural differences such as the existence of diverse career pathways can exacerbate connectivity problems or objectives, strategic aims and priorities are not always aligned. Such barriers can make collaborative decision and policy making even more difficult and this is particularly true of social and relationship capital, arguably, more than any other resource or asset.
Thinking about social and relationship capital in the context of the forthcoming KEF means that universities need to better understand it, demonstrate it and communicate it in order to flourish. I personally welcome a framework which is not intended to create divisive structures or league tables, but to provide universities with tools to understand, benchmark and improve their performance, to provide stakeholders with more relevant information and to provide greater public visibility and accountability.
Many organisations concentrate on monitoring their relationships at a transactional level: how many deals do they do with us, how likely are they to recommend us, what is the profitability of the deals? Transactional measures are useful, but they often miss the underlying relational dynamics because they tend to be lagging indicators of the direction of the relationship. Indeed, they only tell you what is, rather than what could be.
Financial assets tend to be classified in terms of liquidity. Some organisations find it helpful to classify relationships or relational assets in terms of the general class of stakeholder but however you decide to classify them the critical exercises are:
- to link the investment you are making in nurturing, contracting and managing relationships back to the institution’s purpose and strategic aims, and
- to ensure that the relationships are cross fertilised to ensure they remain consistent with objectives, outcomes and values.
In a similar way, knowledge exchange covers an extremely diverse range of activity and it is appropriate that some HEIs will perform more strongly in different areas that align closely with their mission and strategic goals. UKRI has proposed a range of seven perspectives with related metrics to track this and knowledge/intellectual property will underpin most of them.
As university leadership teams continue to address ‘many masters’ in terms of reporting, evidencing and tracking performance, the re-thinking of value by a pathfinder group of universities has shown some real insights on how to tackle the current challenges around perceptions of value and communicating how higher education creates value.
Through the lens of the principles-based framework, integrated thinking and reporting, they have explored how to lead their organisations by thinking about all resources/assets/capitals. You are not required to do an integrated report to adopt the framework, rather, the primary reasons for including the capitals in this framework are to serve as a guide to ensure that your organisation is considering all forms of resource/asset/capital that they use and affect.
It is well understood that value is not created by or within an organisation alone. It is influenced by the external environment, created through relationships with stakeholders, and dependent on all the resources (capitals that we have), but it is what we do with them in an integrated and focussed way which changes the narrative about the value that we create for all stakeholders.
The value of higher education, strategic purpose and integrated thinking are topics being debated at the Advance HE Let’s Talk Value Conference on 11 February 2020. Find out more and book your place now.