What Corporate Management Can Teach Academia???

Last update: Friday 6/3/2015

I originally posted this note back in June 2012 in response to an outrageous overreach by the Board of Visitors of the University of Virginia when it fired Uva's president, Dr. Teresa A. Sullivan. President Sullivan responded with a statement that contained the following quote:

"Corporate-style, top-down leadership does not work in a
great university.  Sustained change with buy-in does work."

An article in the Chronicle (6/15/12) suggested that President Sullivan's unexplained dismissal reflected the influence of a powerful alumnus, a venture capitalist, who proposed that UVa needed leadership that embodied "strategic dynamism" -- whatever that is. Another article in the Chronicle (7/17/12) implied judgement by the Board that Dr. Sullivan hadn't implemented MOOCs fast enough. The eventual good news, of course, was that the Board subsequently rescinded its decision by reinstating Dr. Sullivan president of UVa.

President Sullivan's dismissal struck me as yet another example of corporate intellectual imperialism, a belief, correction, a fundamentalist faith that corporate management knows what it takes to cure whatever ails the rest of America, in this case, a prominent institution in its academic sector.  So what can corporate management teach academia? My answer ==> not much.

Now isn't that a shocker? A man who has spent most of his adult life in universities as a student, as a tenured faculty member, and as a member of an academic senior staff declares that corporate managers don't have much to offer faculty and academic administrators who seek to improve the functioning of their colleges and universities. Yup. I'm just another pointy-headed, closed minded academic who refuses to worship in the High Church of Corporate Management, MBA.  Or am I?

A Mostly Corporate Fable
Once upon a time, a long, long time ago, a businessman faced a vexing problem. Try hard as he might, he made no headway. When he was just about to give up, he had a flash. Why not ask Professor Know-Something to give him a hand? Know-Something had been one of the most interesting teachers the businessman had had in college because the professor really enjoyed solving problems.

So he called his old teacher, described his problem, and was disappointed when Professor Know-Something honestly declared that he had never considered such a problem before, but would give it some thought. A few days later the professor stopped by the businessman's office on his way home and gave him some creative suggestions as to how the problem could be solved. The businessman immediately realized that the professor's ideas not only solved the problem; they would enable him to increase his profits by 10 percent right away. So he insisted on paying the professor one percent of his anticipated gains. The professor was delighted. Indeed, he was so pleased with his windfall that he offered to help his former student whenever possible in the future. Moreover, the professor was able to develop a rigorous formulation of his solution to the business problem in the form of a paper that he submitted to a refereed journal, a paper that was promptly accepted for publication.

From time to time thereafter, the professor would call the businessman to inquire if he needed more help. Sometimes he did, but not often enough to absorb most of the professor's creative energies ...  and the professor's thirst for extra income to supplement his meager academic salary. So the professor began to approach other businesses, especially those owned or managed by his former students, asking them if they needed help. Many of them did, and each of them paid the professor what he considered to be a generous consultant fee.

From time to time the professor also called a few of his students who had become government administrators. Yes, they also needed help; but since government agencies couldn't pay the professor nearly as much as private corporations, the professor spent most of his time with his corporate clients.

And once in a great while, the professor would approach a university administrator and invariably get the same response. "Yes, indeedy, we could really use your help, but unfortunately we don't have any money so we can't pay you."  Needless to say, the professor didn't do much academic consulting.

At the end of each year Professor Know-Someting found that his consulting fees had the same distribution: 90 percent from corporate clients, 10 percent from government clients, and nothing from his few pro-bono academic clients. And his records showed that he allocated his consulting time and creative energies in a similar manner: 90 percent for corporate clients, 9 percent for government clients, and 1 percent for his pro-bono academics.

What's more interesting is that other professors heard about Professor Know-Something's prosperous consulting activities and began to do some consulting themselves. And at the end of each year these other professors also found that their income and man-hours had  similar distributions. Their corporate clients dominated their practices, although they did earn significant income from government agencies. And, of course, none of them spent very much time working on academic problems.

As the professors published more and more descriptions of their clever problem solving methods, they realized that they had amassed a considerable body of knowledge, especially with regards to business problems. Being professors, they created graduate degree programs through which they could teach bright students their creative approaches to business problems. They called these programs Masters of Business Administration, or MBAs. The well trained graduates of MBA programs quickly became the rising stars in whatever businesses they entered. And of course they always called their old professors for help whenever they encountered problems they couldn't solve using the techniques they had learned in their MBA courses. In other words, the virtuous cycle continued with better trained MBAs asking for help on more complex problems which the professors solved, published in journals, and incorporated into their courses.

The End.

Moral of the Fable
So what's the moral my little fable? Very simple. Corporate managers know how to solve business problems because smart academics taught them what they know. Government managers aren't as clever because smart academics didn't spend as much time on government problems because government fees were substantially lower than corporate fees. And nobody knows very much about how to solve academic problems because smart academics seldom work for free ... :-)

So whenever I read that the University of XYZ has hired a president or a provost to apply "proven" corporate management techniques to the university's problems, I usually chuckle, become annoyed, or sadly shake my head. We academics fathered corporate management as it is now practiced. So what can we learn from our robust intellectual offspring? Not much. We didn't develop those ideas to solve academic problems, nor did we verify their applicability to academic problems; so no one should assume that they will work in an academic environment. As for why so many universities seem determined to apply these untested notions, we need only look at their Boards of Trustees whose memberships are increasingly dominated by MBAs. Why? Because universities are hard pressed financially and successful MBAs can provide substantial donations. Unfortunately, he who pays the piper calls the tunes ... :-(