Understanding value

Higher education in the UK is looking for better ways to demonstrate the value that it creates for its students and for society as a whole. Advance HE (formerly the Leadership Foundation for Higher Education) has been working with a pilot group of universities to explore how integrated thinking and reporting can help. And I’ve had the honour of drawing out some of the insights that the project has yielded so far.

The institutions participating in the project are already noticing a range of benefits to changing the way in which they think about and report on their activities.

The clear focus in the integrated reporting framework on how organisations generate value in the short, medium and long term is helping to put value at the heart of their strategic planning and decision-making processes. And it is leading to a greater focus on the needs of universities’ stakeholders, particularly their students.

You can read more about what the institutions are doing, the challenges they are facing and how they are overcoming them in this article on the LFHE blog.

This approach also has clear benefits for an institution’s governing body. It provides a complete and inclusive insight into the institution and its activities. It focuses on how the institution creates value. It considers how well the institution uses the financial and other resources available to it. And it provides information on the institution’s failures as well as its successes.

In short, it goes behind the facts and the figures to really tell the institution’s story. Read more about integrated thinking and reporting can help governors in my second article on the LFHE blog.

It is, however, the success of its students that will determine a university’s ability to thrive. So it is vital that universities are able to understand the needs of their students and that they engage with their students in a productive discussion about the value that a university education represents.

Because while a university’s students may not speak with one voice, they do all have a voice. And even if the university does not listen to what they are saying, others will. Read about what institutions can do to get this right in my third article on the LFHE blog.

And finally, universities would, of course, be nothing without their academic and professional services staff. After all, higher education is a people business and it is through their people that universities create value.

But human ‘capital’ is not like other forms of capital. It cannot be owned. It cannot be moved around at will. And it can have a bad day, get sick or choose to leave. Consequently, the value of an organisation’s human capital is extremely hard to measure.

Which is, perhaps, why most organisations simply don’t bother. The only place that a university’s people appear, for example, is as an expense in the income and expenditure account. As a cost to the organisation. Usually the biggest cost, too. And when it comes to the (financial) crunch, it is our costs that we seek to cut. Starting with the biggest.

Read more about how integrated thinking and reporting can combat this by helping universities to tell great stories about the value that their people create in my article on the Universities HR website.

Integrated thinking and reporting is not an end in itself. Rather, it is about changing the way that universities think about who they are and what they do. It is about putting the creation of value – for students and for society as a whole – at the heart of strategic decisions taken by individual universities and by the higher education sector as a whole.

If you’re interesting in finding out more about integrated reporting and its implementation in the higher education sector, check out the work that the British Universities Finance Directors Group is doing, too. (Including the ‘Phase 1’ project on which I had the pleasure of working.)

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