Posted tagged ‘risk’

The 3 ‘i’s versus the 3 ‘r’s

January 3, 2012

This blog post is coming to you from the west coast of the United States of America. It is an interesting place to be right now, as the US swings into election mode for 2012 and therefore looks more thoroughly into its soul. A good bit of the public discourse here follows similar patterns to those across the Atlantic: concerns about economic recession, public debt and unemployment – as well as criticism of the behaviour of bankers, property speculators and politicians. But what caught my eye was an article in the local newspaper here, reporting on an opinion poll that found most Americans feel that 2011 was a bad year; and yet they viewed 2012 with optimism.

Of course 2012 may turn out to be as bad or worse for all of us. Many commentators are predicting exactly that. But I cannot help feeling that the irrepressible American tendency to be optimistic gives them an edge, and a sense of purpose and energy that Europeans sometimes lack.

And here’s something else that attracted my attention. A local politician here said recently that the country will be in peril if everyone just focuses on what he called the three ‘R’s: ‘regulation’, ‘risk’ and ‘routine’. What was needed much more was a push for three ‘i’s: ‘innovation’, ‘information’ and ‘initiative’. Events over the past 3-4 years have pushed people to look for more regulation, when in fact there is not that much evidence that we had too little: rather, we had too little effective application of regulation, and not enough appropriate information. In the end increased regulation usually settles down as bureaucratisation, and a mentality in which caution stifles the drive for renewal.

Universities are in exactly this position: where some believe that more regulation and less autonomy is the answer. It almost certainly isn’t. More responsibility and a greater sense of community is needed, but that’s something quite different.

My hope for 2012 is that we don’t all become mesmerised by the problems we now face, and that we allow innovation and initiative to flourish, while also recognising that we need to do this as a community with a common cause.


Overcoming the fear of failure: the entrepreneurship imperative

June 13, 2011

The Global Entrepreneurship Monitor is a respected consortium that reports on attitudes to entrepreneurship across the world. Apart from offering some global observations it also reports on individual countries. Recently it issued its latest report on Scotland (in association with the University of Strathclyde), and on page 7 we can read the following comment:

‘In 2010, 43% of working age adults in Scotland who thought there were good opportunities for starting a business agreed that fear of failure would prevent them from starting a business, up from a low of 31% in 2007. This compares with 36% in the UK and 35% across all Arc of Prosperity countries.’

As Scotland, by one route or another, takes more direct control of its economic destiny, it will be vital that indigenous enterprise is encouraged and promoted. This in turn means that business failure must be accepted as a possible by-product of innovation and must not be seen as a negative reflection on the person who has experienced it. Scotland’s universities must support the drive to generate enterprise by encouraging students to put risk and failure in perspective, and to see entrepreneurship and creativity as the hallmarks of a self-confident population.

College disasters and their causes

March 27, 2009

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.