Jim Rushton

On the basis of the ideas put forward by Burton R. Clark in his seminar book Creating Entrepreneurial Universities", the author of this article explores the ways the key elements of an entrepreneurial university find their expressions and configuration in the Warwick University. The emphasis is put on the history of transformations that took place in the University, particularly in its management structures and in the ways its academic and administrative staff started to bring about changes. The question of whether the example of the Warwick University should be followed by others is raised by the author in order to convince the reader to formulate independently the answer based on facts.

The period since 1980 has seen universities across the world face serious and growing challenges. These include:

• Growth in student numbers. In 1960 it is estimated there were 13 million students world wide. In 1995 that had grown to 82 million. By 2025 it is expected the number will be 200 million.
• A significant decline in funding per student head.
• A broadening of the kind of student seeking university education. Mature students, short course vocational students, part-time students, distance learning students all contribute to a much diversified student body.
• Employers increasingly demand students who have vocational skills as well as their subject disciplines. Lifelong learning is also increasingly seen as a necessary vocational support and one which universities should provide.
• The growth of knowledge presents an almost insurmountable problem. In the early 1990s, Chemistry produced a million research articles in a two year period, mathematicians are generating over a hundred thousand theorems a year and new business management books come off the presses at the rate of five per day. Other subjects show similar tendencies and new subjects are introduced with a regularity which compounds and intensifies an already impossible situation.
• As if all this were not enough, we see governments demanding greater efforts by universities to make their research and teaching activities more relevant to the economic needs of their region and nation. All of course to be achieved with less State funding but with much increased levels of accountability.
• The IT revolution presents universities with considerable uncertainty about its future impact on teaching and indeed the nature of higher education. In the meantime, what is less uncertain is the ever escalating cost of maintaining and updating an IT infrastructure sufficient to meet the expectations of staff and students.

In his book "Creating Entrepreneurial Universities", Professor Burton Clark1 describes universities as being "caught in a cross-fire of expectations" and outlines the consequences for university management as follows:

"In the face of increasing overload, universities find themselves limited in response capability. Traditional funding sources limit their provision of university finance: governments indicate they can pay only a decreasing share of present and future costs. "Underfunding" becomes a constant. Traditional university infrastructure becomes even more of a constraint on the possibilities of response. If left in customary form, central direction ranges between soft and soggy. Elaborated collegial authority leads to sluggish decision-making: 50 to 100 and more central committees have the power to study, delay, and veto. The senate becomes more of a bottleneck than the administration. Evermore complex and specialized, elaborated basic units - faculties, schools, and departments - tend to become separate entities with individual privileges, shaping the university into a federation in which major and minor parts barely relate to one another. Even when new departments can be added to underpin substantive growth and program changes, the extreme difficulty of terminating established academic tribes or recombining their territories insures that rigidity will dominate. Resources go to maintenance rather than to the inducement and support of change.

As demands race on, and response capability lags, institutional insufficiency results. A deprivation of capability develops to the point where timely and continuous reform becomes exceedingly difficult. Systemic crisis sets in."[2]

In order to assess how this seemingly impossible state of affairs might best be handled, Clark looked in some detail at five European Universities which he felt had handled this situation satisfactorily by becoming, in his words, 'more enterprising, even aggressively entrepreneurial'.[3]

He defined enterprising universities in the European setting as 'places that actively seek to move away from close governmental regulation and sector standardization. They search for special organizational identities; they risk being different; they take chances in "the market". They adhere to the belief that risks of experimental change in the character of universities should be chosen over the risk of simply maintaining traditional forms and practices'. [3]

The universities studied by Clark were the Universities of Warwick and Strathclyde in the UK, the University of Twente in Holland, Chalmers University of Technology in Sweden and the University Joensuu in Finland. His study identifies five elements which are common to the experience of all five universities and which he argues are necessary components of transformation. The five elements are:

· A strengthened management core

In most universities management tends to be democratic and consensual and where office holders are elected for fixed terms it may well lack continuity. Such a system is not equipped to handle the increasingly specialized and professional nature of university management and deal with the demands of a much more competitive and demanding environment. Not surprisingly Clark found that all five of the universities he studied had devised mechanisms to enable them to act more quickly and decisively in the interest of the institution as a whole, and most importantly they had achieved this necessary improvement in managerial capacity without inflicting too much damage on traditional academic values.

· Development and expansion at the periphery

All five universities had grown in areas which responded to the need to develop and support external links. This was demonstrated by the establishment of offices for industrial liaison, industrial and commercial research contracts, intellectual property, continuing professional education, alumni activities, public affairs and development. This peripheral growth also included cross disciplinary developments and a profusion of project oriented and collaborative research centres. Such centres have more flexibility than large established departments in being easy to establish and terminate. They are often based on new funding sources, bring into the universities new staff and very considerably broaden the range of institutional contacts. Given managerial competence and confidence this kind of activity combines growth with flexibility in a responsive manner hardly possible from the university 'centre'.

· An increased and diversified funding base

Each of the five institutions set out to generate additional revenues to compensate for declining government support and to undertake new activities. They were all successful and most noticeably generated funds from the provision of services for local public and private organizations thus making their institutions important contributors to the regional economy.

· A stimulated academic heartland

This fourth factor is best expounded by Clark himself:

"When an enterprising university evolves a stronger steering core, and develops an outreach structure, and diversifies its income streams, its heartland is still found in the traditional academic departments. Whether they accept or oppose a significant transformation is critical. It is here in the many units of the heartland that promoted changes and innovative steps are most likely to fail. If the basic units oppose or ignore would-be innovations, the life of the institution proceeds largely as before. For change to take hold, one department and faculty after another needs itself to become an entrepreneurial unit, reaching more strongly to the outside with new programs and relationships and promoting third-stream income. Their members need to participate in central steering groups. They need to accept that individuals as well as collegial groups will have stronger authority in a managerial line that stretches from central officials to heads of departments and research centers. The heartland is where traditional academic values are most firmly rooted. The required blending of those values with the newer managerial points of view must, for the most part, be worked out at that level. In the entrepreneurial university, the heartland accepts a modified belief system."[4]

· An integrated entrepreneurial culture

The fifth element is an entrepreneurial culture. This doesn't occur overnight and sometimes follows and sometimes leads new developments. It doesn't necessarily gain hold across the whole of an institution but in the five institutions studied by Clark there was a clear perception by large numbers of staff that their institution had a special character which involved innovation, risk-taking and self-help.

How far did these elements apply to the development of the University of Warwick since 1980? The following account will demonstrate a strong correlation.

First, the strengthened management core. This is certainly a most important feature. Warwick has a very tight group at the centre which meets weekly to advise the Vice?Chancellor, to discuss policy and to take urgent decisions in between meetings of the main statutory committees. This body is called the Steering Committee and consists of the Vice?Chancellor, three Pro?Vice?Chancellors, three Faculty Board Chairmen, the Chairman of the Graduate School, the President of the Students' Union and the Senior Officers (Registrar, Deputy Registrar, Academic Registrar, Finance Officer, Administrative Secretary, Estates Officer and others as required). There are four points to be made about this arrangement:

1. The Vice-Chancellor and the Officers are permanent appointments whilst the Pro?Vice?Chancellors and Faculty Chairs are elected for three and two year periods. This gives a good balance between professional and academic concerns and between continuity and democratic representation.

2. The Steering Committee has strong links into the academic heartland and therefore has the confidence to take quick action when necessary.

3. Warwick has a strong centre and strong departments with little in between. There are no Deans and the Faculty Boards are committees with little or no management responsibility. This helps quick and efficient communication and decision-making.

4. For many issues of strategic and financial importance, the lay Chairs of the Council, Finance Committee and Building Committee will have a considerable involvement. These Chairmen are usually widely experienced in business or public service, and there is no doubt that the University benefits enormously from their experience and advice.

5. The Registrar is the senior administrative officer under the Vice-Chancellor with the additional responsibility of providing the secretariat to service all statutory University committees. This unified administrative function is most important. It frees the Vice-Chancellor from having to arbitrate in sectional disputes, but much more important at Warwick has been the ability to set high standards across all sections of the administration and to ensure that they all follow centrally driven policies to be 'customer' oriented, to be flexible, to be non-bureaucratic, and to see their role as supporting the main academic and revenue-generating activities of the University. The importance of this central coordinating, motivating, standard-setting function cannot be underestimated in the Warwick context

Secondly, the development and expansion at the periphery is demonstrated strongly by the Warwick experience. Between 1980 and 1997 the number of research units and centres increased from 3 to 44. These units and centres represent an area of flexible and often responsive activity, very often with links into the community, very often dependent on winning grants or providing services for their survival. The University's three residential management training centres, the Science Park with its 65 companies and 1350 employees and the Arts Centre which has 250,000 visitors per year further exemplify a vigorous presence at the periphery. In addition, all the support functions such as industrial liaison, research contract support, patent and copyright, fund?raising and public affairs were introduced at Warwick after 1980.

The third factor - an increased and diversified funding base is clearly demonstrated by the reduction of Government funding as a proportion of total income from 85% in 1980 to the present day figure of 44%. The earnings which last year totalled L76 million come from 55 different activities, all of which report to the Earned Income Group chaired by the Registrar.

The fourth factor - a stimulated academic heartland again very much reflects the Warwick experience. The tremendous growth in all subjects - but especially the Warwick Manufacturing Group, the Warwick Business School and Continuing Education, the development of the Graduate School and growth of graduate student numbers to 40% of the student body, the high scores in the Research Assessment Exercise and Quality Assurance Agency Teaching Assessment, and the recent establishment of a Medical School - all testify to a vigorous and buoyant academic heartland.

The fifth factor - an integrated entrepreneurial culture has been carefully nurtured at Warwick by the early and transparent use of performance indicators, by means of incentives and rewards for success and by appropriate internal and external publicity. Professional press management and public relations are a vital part of this process.

Clearly the Warwick experience supports Burton Clark's conclusions but there are other factors which contributed to Warwick's ability to transform itself during the nineteen eighties into an innovative and entrepreneurial institution.

First, and arguably the most significant, were the radical higher education policies being implemented by the new Conservative Government from 1979 onwards. These included a large reduction in state funding, an increase in the number of students, the intrusion of market forces and competition into the macro and micro management of higher education, and measures to encourage institutions to become more relevant to the social and economic development of the nation. Of these the financial depredations and consequential prospect of serious damage to the quality of academic life created a climate within the University in which previously unthinkable policies could be introduced as dire necessity, but which were subsequently accepted as salvation and eventually embraced with pride as part of 'the Warwick Way'. Without the external 'threat' it is most unlikely that Warwick would of its own volition have initiated the radical programme of change and transformation.

The Warwick response was a decade of hyperactivity, of innovation and of growth. It was a decade which saw the University's 'earned income' grow from 15% to 50% of total turnover. Above all it was a decade in which the University came of age as a contributor to the social and economic development of the region. The major contributions came through a rash of new developments outlined below:

A Department of Continuing Education was established and after the transfer of Responsible Body status from the University of Birmingham in 1984 the number of local Open Studies courses and attendees increased tenfold. The Continuing Education Department was also responsible for the introduction of access courses and the innovative 2+2 degrees in collaboration with local Further Education Colleges. To further underline the University's concern for local matters, the Continuing Education Department established an advisory centre in one of Coventry's more deprived areas.

In 1980, Professor S K Bhattacharyya established a Department of Manufacturing Engineering within the School of Engineering Sciences. By addressing regional and national needs through the provision of consultancy, training, research and development services and by working closely with major engineering companies and their suppliers, Kumar Bhattacharyya built up one of Europe's largest university centres of Manufacturing Engineering.

In 1983, Professor George Bain was elected Chairman of the Warwick Business School and proceeded to transform an average department into one of the nation's leaders. This was achieved partly by massive expansion, much of which was based upon the provision of consultancy, training and research services to meet the needs of regional and national, private and public sector organizations.

Local and regional needs were also very much in mind with the establishment of the Department of Applied Social Studies and the Department of Postgraduate Medical Education. In both cases the training and updating of professional staff brought the University into a close working relationship with an important local service provider.

In response to the very high unemployment in Coventry, the University Science Park was established in 1983 on the University campus in collaboration with the Coventry City Council, Warwickshire County Council and the West Midlands Enterprise Board. The Science Park now accommodates 65 companies which employ over 1350 staff.

Other developments introduced during the '80s which had a strong regional orientation included the building of three residential training centres, expansion of the Warwick Arts Centre to generate a quarter of a million visitors per year and efforts by the Sports Centre, Library and Language Centre to make their facilities and services available to organizations and members of the public within the region.

Implicit in the strong regional developments just described was a policy of growth. Growth in student numbers, growth in existing activities and growth of new activities were all pursued vigorously and achieved as the figures below demonstrate:

1980 1997 Students (heads) 5250 15630 Postgraduates 550 5769 Overseas students 250 2474 Self-financing course students - 3396 Research Institutes and Centres 3 44 Income L20m L1387m

During the same period the staff-student ratio declined by 50 per cent and State funding per student head in excess of that figure. The growth of the University meant that these cuts could be absorbed less painfully whilst at the same time expansion created a feeling of excitement, generated new income streams and generally boosted morale in very considerable contrast to the depressed state of the higher education sector as a whole.

A further factor which contributed to Warwick's transformation was the youthfulness of both its staff and structures. There were no departmental 'baronies', no Deans defending the indefensible and the decision-making structure had not yet reached the sclerotic state exhibited by many older institutions.

This allowed the development of an important feature of the Warwick model. It is the 'progressive taxation' system under which a sizeable proportion of departmental earnings, where they exist, is re-distributed for the benefit of the University as a whole. Youth and related administrative flexibility might also account for the surprising ease with which the Earned Income Group grew from an informal meeting of officers under the Chairmanship of the Registrar to its current position where it monitors or controls over half the University's total budget in a manner which would not have been possible in many older institutions. A central feature of the Earned Income Group policy has been to appoint high quality professional managers with relevant business experience and then provide guidance and support to enable them to survive and prosper within what is still a largely uncomprehending and potentially hostile internal environment. In no area is this support more important than in the need for continuous investment for growth and to remain competitive. For example, a costly refurbishment of a perfectly acceptable residential management centre might appear extravagant and even wasteful when put alongside funding needs for 'core' university activities such as teaching and research. However, such refurbishment has to be seen in the context of the competitive imperative of the industry and the fact that a failure to invest would certainly jeopardize future earnings. Warwick has handled this dilemma well partly through the Earned Income Group structure and partly because the very strong centre (Vice-Chancellor, Pro-Vice-Chancellors, Faculty Board Chairs, senior officers and the three senior lay officers) has been able to set a sensible long term development budget and resist the many and varied short term pleadings. In contrast, the grim and shabby state of many universities at present bears testimony, not just to shortage of funds, but to weak decision-making and a willingness to pass on the consequences of gradual deterioration of plant and buildings to be picked up at some indeterminate point in the future.

In his concluding discussion Burton Clark stresses the incremental and holistic nature of change in universities. He quotes with approval David W Leslie (1996) who states '... change in colleges and universities comes when it happens in the trenches; what faculty and students do is what the institution becomes. It does not happen because a committee or a president asserts a new idea'.[5]

Whilst the change in universities must embrace the wider community, there is little doubt that the process at Warwick would not have started without the prescient and far-sighted recognition of the need for change by the Vice-Chancellor, Jack Butterworth. He reached this conclusion long before his fellow vice-chancellors and outlined his views eloquently to the University Court in his annual report in 1980. He said:

"I began by drawing your attention to the three functions of a university: teaching, research and service to the community. A university which is doing its job in teaching, research and service to the community will inevitably find that it is an agent of change. Universities are frequently criticised for being ivory towers, often by those who have only an imperfect knowledge of what a university is doing. In most university work there is an element of the cloister, and indeed of dedication and retreat, in order that the highest standards can be achieved, whether in research or teaching, but the days of the ivory tower as such are long since over. A new dispensation is now being differently received in different institutions. Some adopt the new order willingly, some, like the University of Warwick, enthusiastically, some cautiously and a few reluctantly, but all admit that universities must come to terms with the community which we serve. For the reasons which I have tried to explain, community service has now gone far beyond extra-mural work. If I may put it shortly, it is a philosophy, a point of view which affects the whole operation and structure of the university. It may be that the old structure has had its day and that those universities will be successful which do not wait for a new model or precedent but are already moving towards a new and different approach."[6]

Jack Butterworth recognized very clearly that the élite university system could not last and that movement to a mass system of higher education would inevitably lead to a continuation of the cuts introduced by Mrs Thatcher in 1980. For Warwick to maintain the standard of academic life to which it had been accustomed, it would be imperative to replace the lost Government funding. The course was set by the Vice-Chancellor but it required the prodigious energy, imagination and high level management skills of the Registrar, Michael Shattock, to enrol the active support of the wider University community and to ensure that the pace of change and development did not slacken.

How far the Warwick experience demonstrates either the general validity of Burton Clark's five elements or indeed whether its own experience can provide a template for other institutions is an interesting and important issue. To address this we might ask the question "which of the factors contributing to Warwick's transformation were so fundamental that without them the change would not have occurred?"

Warwick, like other UK universities is a self-governing organisation of consent, and as such is constitutionally resistant to change. Without Mrs Thatcher's sword of Damocles, it is almost certain that the panic-driven instinct for survival would not have been triggered. The fact that other UK universities faced the same problem at the same time but did not respond with the same speed, vigour and opportunism can be attributed to a range of factors, but there can be little doubt that without the far-sighted, energising leadership of the Vice-Chancellor and Registrar, the Warwick response would also have been slow and feeble. Without an effective and unified management team to introduce and support the implementation of change, it is almost certain that the transformation would not have succeeded.

So we have three ingredients without which the transformation at the University of Warwick would not have taken place. These are incentive, leadership and management.

What then of Burton Clark's three remaining elements of transformation: development at the periphery, increased funding base and the stimulated academic heartland?

In each case they are first a consequence of change instigated by the University and secondly a most important contributor to its growth, development and success. For example, it was a clear intention of the University to become more relevant to the economic and cultural life of the region, which in turn led to growth, new income streams and a much enhanced, positive local and national profile. The additional income from the provision of local services contributed greatly to the University's ability to fund further growth and change. Similarly, the increased and diversified funding base was initially a policy which in time became part of the fabric of successful change. The stimulated academic heartland has been a major feature of the Warwick landscape. Without it, the other elements of change could certainly have brought financial and reputational success, but in the absence of 'buy in' from academic departments, Warwick's success would have been a pale shadow of what has been achieved.

It may be concluded that whilst Warwick's growth and development since 1980 most certainly incorporated the five elements of transformation identified by Professor Burton Clark, these were not in themselves a sufficient condition of change. Several other factors were important but without the external stimulus of Government policy, the far-sighted and dynamic leadership of Jack Butterworth and the high level management skills of Michael Shattock, it is most unlikely that Warwick would have become what Lucy Hodges described as '... the success story of the university world'.[7]

-- Based on an article published in "The State of UK Higher Education", editors David Warner and David Palfreyman, SRHE and Open University Press, 2001 --

[1] Burton R Clark (1998) Creating Entrepreneurial Universities - Organizational Pathways of Transformation. UK: Pergamon Press
[2] Ibid., pp. 131, 132
[3] Ibid., p. xiv
[4] Ibid., p. 7
[5] D W Leslie (1996) Strategic governance: the wrong questions?, The Review of Higher Education, 20(1): 101-112
[6] J B Butterworth, Annual Report, 1980-81, University of Warwick
[7] Lucy Hodges (2000) Fear not... the Professor has a cunning plan, The Independent, Education Section, 2 March, p. 2