College disasters and their causes
By now we have become accustomed to the parade of disaster stories from financial institutions, and on the whole we now know how they got themselves – and us – into the major messes we have witnessed. But now the question is occasionally being asked whether higher education institutions will also start to hit the headlines for these reasons. There have been plenty of stories about deficits, and some of these look serious. But the first major crisis story in Ireland is from Waterford, where the Institute of Technology has hit major financial problems.
According to a recent article in the US Chronicle of Higher Education, a large number of American institutions are in crisis, with budget cuts and lay-offs. But the writer indicates that this is not all down to the bad economic environment; many of them took poor decisions during the good times that have now come to haunt them. The article describes thirteen such reasons, including risky investments, relying on too much cheap credit, too many capital projects, poor political lobbying, the failure to focus on appropriate niche areas.
It is well worth while reading this analysis in full. But it is also important to note that a common theme of much of this is that the institutions took risks; and as we know, risks can go wrong. So what we now need to ask ourselves is how good we are at evaluating risk and developing our strategies accordingly. It cannot be right to suggest that we should only act prudently and avoid all risks – to do that would mean never to innovate. But not all risks are good risks, and we need to be able to identify the more likely bad ones.
My view is that, on the whole, Irish universities have not been bad at this, and while there have been some initiatives (as you would expect) that didn’t work, or didn’t work as well as expected, or didn’t work immediately, there have been many others that have been spectacular successes; and few life-threatening disasters. But if we are now to be yet more entrepreneurial (as we should be), we need to have a shared framework that represents best practice in identifying risks and assessing the wisdom of taking them. In the overall planning framework for higher education institutions, this should become one of the priorities.Explore posts in the same categories: higher education, university comment below, or link to this permanent URL from your own site.