Higher education in the labyrinth: a tale of managing enormous risks arising from insoluble problems

James Coe considers approaches to deal with the difficult, diffuse, and occasionally dangerous problems facing the sector

James Coe is Associate Editor for research and innovation at Wonkhe, and a partner at Counterculture

Risk in higher education can never be eliminated entirely.

There is no amount of registers, action plans, and horizon scanning that can stem the tide of the unpredictable and malign that stalks the corridors of our higher education institutions.

We’re a rescue team. Not assassins

Of course, these corridors are within our own control. Indeed, the history of the western literary canon is the history of the banishment of risk until it returns in ever more dreadful ways. Readers of Wonkhe may be familiar with Theseus and the Minotaur. Unable to contain the Minotaur safely within his kingdom and unwilling to kill his wife’s son, Minos, the King of Crete, banishes the Minotaur to a labyrinth where it feasts on visitors. This is until Theseus, armed with a twine to find his way out of the maze, kills the Minotaur.

It is a story of hubris, and heroes, and adventure, but it is also a dynamic risk management process. Unable to kill the Minotaur it is simply moved out of sight and out of mind until a solution presents itself ordained by invisible external forces. Like the item of the risk register that has no obvious solution but marked high danger and high likelihood presumably Minos could have left the Minotaur to roam the labyrinth forever and kept his fingers crossed that it did not bring down his Kingdom. He got lucky but nobody is lucky every time.

The part of this tale that is sometimes forgotten in its retelling is that it has a pretty miserable ending. Theseus failed to tell his father that he had killed the Minotaur. So much was his dad consumed by grief that he drowned himself in the Aegean Sea. Minos’ wife, Pasiphae, is later seen in the underworld forever trapped in the home for sinful lovers. The Minotaur is dead but the consequences of his birth, life, and death, live on forever.

If it bleeds we can kill it

The one advantage that Theseus had over university risk managers is that the Minotaur can be killed. The nature of universities is that not only are problems often out of sight, unpredictable, and occasionally dangerous, but they are insoluble as well. Risk can be reduced but it can never be defeated.

To take a few examples. The single biggest financial risk to universities is if there is no future uplift, by whichever means, to the quantum of funding allocated to home undergraduate students. There is excruciatingly little universities can do individually to change the system but they have to deal with the real life consequences of its impacts. The second biggest risk is that geo-politics closes the borders to students from China which would leave a financial hole from which many universities could not recover.

Of course universities can broaden their entries, grow income elsewhere, and the like, but it is not possible for the whole sector to have an operating model that is not primarily reliant on the recruitment of home undergraduate students. It would also be impossible for the whole sector to make this change all at once; there is simply not sufficient demand. The only policy response becomes either the untried in mass university mergers or the unthinkable of closing down larger parts of the university or the university entirely.

There are then the risks that require a level of understanding so deep that it might be unreasonable to expect any one university can respond to them. Is it possible to expect universities to make predictions on geo-politics over 5, 10, 15, or 20 year time horizons, as to who might be a future reliable partner? Can we ask a risk management professional to predict, and therefore prepare, for future regulatory requirements? Is it at all remotely realistic to ask universities to prepare “the graduate of the future” when the job market is so unpredictable? For example, despite its obvious growth potential job listings for roles in Artificial Intelligence have declined by 21 per cent in a year. It is ethically dubious to work within the expectations of a regulator today in the hope that uncertainty is smoothed out by the regulator of tomorrow.

Get to the chopper

The question then becomes what it is universities should actually do when risks are so hard to pin down and in any case are insoluble. One natural response could be to build up security today to provide some insulation against the unpredictability of tomorrow. A temptation might be to increase reserve levels but this runs into the real life problems of funding having to be found, or saved, from somewhere. And the accusation that the funding is not useful sat in an untouched bank account.

The second might be creative insurance products that universities could collectively pool into to offset against major and obvious risks. This might be a decline in student numbers; for example. It’s not clear how much appetite there would be from providers for this kind of product or how it might work but it is likely a market would exist for it in some form.

There is a wider cultural question on the extent to which universities are recruiting and training staff with flexible and adaptable skills. There will also be a need for specialists but if there was to be an unpredictable regulatory clampdown on partnerships, research themes, or programmes, universities will need staff that can change their work quickly, and be supported to do so.

The biggest and scariest view of the world is that risk is only getting larger and more complex. Reliable international partnerships are fraught, the regulatory environment is more interventionist, and we may only be at the foot of the declining resource mountain. Short of the hero who will turn up to the slay the Minotaur universities may wish to consider gearing their investment in legal, compliance, and risk, toward a world where our labyrinths are only more complex and the monsters within them more dangerous.

2 responses to “Higher education in the labyrinth: a tale of managing enormous risks arising from insoluble problems

  1. Great article James – the risk universe for HE institutions feels like it is changing on a daily basis, with numerous elements that ‘keep me awake at night’… regular engagement with risk owners to understand the latest position is key, with the role of the Risk Manager to question, challenge and support the development of controls to improve organisational resilience.

  2. Interesting piece, James – thanks. You are right that nailing a university’s future to a set of predictions about demand, geo-politics, technology, and regulation is hugely dangerous.

    I would offer two principles for such an uncertain world. The first is diversification; if part of the university is inherently exposed to a particular risk, the impact if the risk is realised will be much less for the university as a whole if other areas are unaffected. The drive to reduce dependence on China for international student recruitment is a good example – while recruiting from other countries still carries considerable risk, it does at least begin to moderate the impact that would be felt if a meltdown in Sino-British relations one day turns off the flow of Chinese students.

    The second principle is agility – in resourcing, staffing, governance and much else. The ability rapidly to develop new programmes, close old ones, respond to regulation, repurpose facilities, and use staff where the value is greatest, will surely be critical. Above all, taking account of changing external factors and adjusting tack accordingly should be seen as a sign of strength rather than an admission of previous failure. The universities that prosper will not be those that most accurately predict the future, but those that are most effective at responding to the external world, whatever the future may bring.

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