What is the value of a university? The debate isn’t new, but the current argument seems to be about what the best metric is to measure this value and then create a league table out of it.
I think this is the wrong conversation, and we need to find another way of answering this question. Surprisingly, I think the answer can be found in American capitalism.
Last summer, 181 CEOs of the largest American corporations put their names to an open letter, making the case for redefining the purpose of a corporation to promote an “economy for all Americans”. The Business Round Table, as this group of powerful CEOs is called, had been long standing supporters of the idea of shareholder primacy – that corporations exist to serve only their shareholders, making money for their owners. Their single measure of value for a corporation was the value they returned to shareholders, measured in dollars.
The economics and business professors reading this will know that this shift has been brewing for a while. The global financial crash of the late 2000s, the rise in dissatisfaction with globalisation, the brand affinity that comes from purposeful corporations such as Patagonia. You can see this manifested in how the B-Corp movement has spread around the world and the annual letters of the all-powerful investor Larry Fink. Business is looking beyond its shareholders and thinking about all its stakeholders. This is the rise of stakeholder capitalism.
Lessons for HE
What lessons can universities take from this? Well, first, this shift is about CEOs of big companies making an ambitious pitch on why their companies can, and will, do good in the world before the regulators and legislators jump in.
Second, while they share a common vision, each company will deliver value to its stakeholders in different ways, appropriate to their context and business.
Finally, it is the right thing to do. The social contract between company “fat cats” and the rest of society was about to snap, and they needed to rebuild trust between their institutions and society at large. I think all of that fits with the current debate about the value of a university.
My suggestion is for universities to move the value debate forward on a similar basis, not to just make the case that the value delivered by higher education goes wider than the salary of their graduates and then fail to agree on what the best alternative metric is. Universities should argue that each institution delivers value in a different way to their different stakeholder groups, that they deliver different types of value and that is a good thing because they serve different groups of stakeholders.
Universities can share this common vision of delivering value to society, can stitch it into their unique strategies and become more accountable to their own stakeholders for increasing the value delivered to them. I believe that universities can move away from the reductive arguments about comparing every institution to each other with a common metric and celebrate the myriad ways that they deliver social value.
Frameworks for assessing social value
Luckily, there are existing frameworks for assessing social value that can be applied easily in the university context. Social Value UK is the national network for measuring and improving the delivery of social value, or social impact, across the country. Their approach to social value has been used in FTSE100 listed companies, charities, housing associations and social enterprises. It is flexible because it is based on principles, which can be applied just as easily to a research intensive university as an education focused civic university.
The first principle of the Social Value UK framework is to involve stakeholders in the process of measuring social value, and another is to only value the things that matter. This means asking your stakeholders what they value. This will probably make perfect sense to many of you, but it will feel counter-cultural for some institutions.
What these principles mean is that we should be out there asking our students, graduates, staff, businesses, resident neighbours and research partners “what do you value about our university?” This is the starting point for a discussion. Your university might be doing something that it believes is hugely valuable, but none of your stakeholders view it like that. Why is that, do they know you’re doing it, do they care, what can you do to connect your work to their wants and needs better?
The other principles may also give you pause for thought. If we are to fully articulate the value that universities supply to society, we need to do a bit of soul searching. It might be that you find out that all the effort you put into a particular civic programme really doesn’t deliver much that the local community values. Or your student support services aren’t really valued by the students they are supposed to be supporting.
The temptation might be to brush that bit of knowledge under the carpet, after all it makes us feel good to deliver that programme or we believe it is the right thing to do to provide those services. But like some corporate social responsibility programmes delivered by those big American corporations, perhaps that money could be better spent doing something meaningful rather than using it for window dressing in a nice marketing brochure.
Accounting and accountability
Once you have measured your social value, report it in university accounts, and in direct communications with stakeholders. By becoming directly accountable to your own set of stakeholders you can tune into what matters to them and adjust your actions. The comparison that matters is the amount that each university improves its social value over time, not the comparison between individual institutions. If every university can demonstrate that it is returning a large, and increasing, amount of value to society every year, and that society recognises and supports the value that they are receiving, perhaps universities will be able to reclaim the debate on the value of universities.
If universities want to recover the positive social contract that they enjoyed for so long, we need a new way of articulating the value that higher education delivers to people across society. Putting that social value at the heart of university strategies will demonstrate, just like the Business Round Table CEOs are doing, that this is a serious part of what being a university is all about.