Developing Organisational Resilience: Directions for WSU

I hope that what I'm going to say will resonate with each of you in different ways. I have made a few changes to what I thought I might say tonight on the basis of the sorts of things that were said earlier today, but fundamentally I wanted to share some experiences of other universities. I've been doing a lot of thinking and reflecting on how other institutions have responded in circumstances that may be similar to ours.

In part, it began last year. I was at a function where I was fortunate enough to sit next to Peter Greste, the Al Jazeera journalist. Many of you will remember that he was arrested in Cairo in 2013. He was first placed in solitary confinement for a month, and then sentenced to seven years in jail. This man is a journalist who is used to going into conflict zones so you would expect that he would be well prepared to deal such an eventuality. Talking with him, one of the most striking things was that he went into Cairo completely unprepared. Normally when he goes into a conflict zone, he's got a backup plan. He is mentally prepared for adversity. He goes in with a physical kit. In this case, he was relieving for a colleague over the Christmas break. He wasn't going to an identified conflict zone and he thought it was all going to be pretty straightforward. So, when these particular events happened to him and he wasn't prepared. He had no backup plan.

He hadn't done that mental preparation, and the personal resilience that he demonstrated in that period of time was remarkable and profound - even more so because his detention was unexpected. That caused me to think a lot about personal resilience, and then I also thought about what we've heard about today in relation to students: why they persevere, why they're successful, why they stay with the university, or why they drop out.

There's a relationship between personal resilience and organisational resilience that I started to think quite a bit about because of the situation in which we find ourselves as a university. Thinking about how similar personal resilience is to organisational resilience. Are there some common characteristics? What is it about organisations that help them to be successful, that help them to adapt either to incremental change or to unexpected crisis?

This morning's opening from the Vice-Chancellor framed the characteristics that we as an institution need, and the characteristics that we're currently exhibiting in relation to responding to challenge and change. I think we can say quite a few are characteristics of resilient organisational behaviour. Our conversations during the day really built on this, and we heard a lot of those ideas get drawn out. Martin today, referred on more than one occasion to coming back to our true purpose.
And you know, all of the writing about organisational resilience and all of the case studies show the importance of understanding and maintaining a focus on the core purpose and on the mission is absolutely central.

We're currently in an environment that demands resilience. It will continue to require us, as it has done, to exhibit all of those characteristics. Our capacity to anticipate is important, yet even the Vice-Chancellor referred to unanticipated consequences. We've had four years of anticipating what might happen in an uncertain government policy framework. It hasn't played out quite the way we thought it would a few years ago, but it's been central in our thinking all the time. So, we have been developing our versions of backup plans through this. But we also have incremental and sudden and anticipated changes. Certainly for us, some of those were the things that Peter reminded us about this afternoon: for example, Wollongong University's announcement that it was moving into Liverpool, our heartland, a while back. This region was ours, and we know that other universities are starting to find Western Sydney a much more attractive proposition than they once did. We have been thinking about that, and I this is an area that we need to put a little bit more focus on, because for all of us it's really important.

Still, we also need to think: what do we do when we start to behave in ways that allow us not just to survive, but to thrive and to grow? I thank everybody who presented today because they've filled in a lot of the background that I might have given here about the thriving, dynamic region in which we're located and Tim's session today gave us some pretty important touchstones to consider.

Martin and I were having a conversation about how we might start to think about the role of the university as an anchor, and what that might tell us about how we might refine our purpose; what might that tell us about what our purpose might look like moving forward, and how will this allow us to respond to a lot of changes we know, and a lot of changes we don't yet know will come?

Some of you will probably know these stories, but I thought I would share a couple of case studies. I think the case study of OneTel we saw this morning is a really useful one for us in terms of an organisation that has been able to change very quickly and respond to a new environment and markets. The big questions are:

• what is it about some organisations' behaviour that allows them to adapt and to thrive?
• what is it about other organizations that causes them to either become frozen, or become far less successful and less viable?

Institutional resilience is multi-dimensional. We've picked up a lot of those characteristics today. It's really important that we move to much more adaptive operating models and how we do that is an important question for us.

We had a very nice overview of trends in terms of: what students expect; trends in the community; trends in the university; tech trends in higher education; and trends in the local region. Now we need to recognize those trends, anticipate where they're heading, and think about what they might demand of us. That's going to be central to what we do.

There are some other messages around what it means to be resilient. They include valuing diversity and difference, and being able to innovate despite adversity. We need to be able to keep experimentation going. Tony Giddins' ideas of unsupported risk-taking (taking risks in a managed way with a safety net) and the notion of continuing to invest are crucial, but that's really where we ended our conversation. We need to think about investing not just in our systems, but in our client base. We need to invest in our students, in our partners, across all levels of our workforce, and in our leaders so that we can continue to develop and refine the capabilities that we need to make us relevant and keep us competitive. There is a relationship between individual resilience and organisational resilience and there's enough research data that tells us that organisations that have a large number of resilient individuals in them tend to be resilient themselves. And this is particularly the case in knowledge driven organisations, where the product we have is the people of that organisation. So, people are important and they are important characteristics of resilient organisations.

I'm going to start with a story that certainly made me cry at the time, and not in a very personal sense. Many of you are aware of the circumstances that London Metropolitan University found itself in over the last decade or so.

London Met is a public, metropolitan, multi-campus research university in London. It is the consequence of a 2002 merger between London Guild Hall (a poly) and the University of North London. The merger was not an easy merger. It was very contentious and the university was plagued by sustained industrial action.

Besieged by industrial action, London Met had very unhappy staff, a lot of bad press, and a very negative media coverage around the merger. Then, in 2008, HEFCE (the Higher Education Funding Council of England) wanted to claw back 15 million pounds from the university, but that went on to become 36 and a half million pounds. This was a claw back of government funding that had been given to the university on the basis of misreported student completions.

Unfortunately, the university had been using a non-compliant definition of retention. This had been brought to the university's attention, but the university continued to use the inaccurate definition. After continued warnings they continued to do so. Of course, it wasn't just bad for the university, the loss of thirty six and a half million pounds from their budget wassignificant. There was the consequent fallout for the executive of the university and for their board. I should just tell you a little bit about the scale of the misinterpretation of attrition: the university had been reporting a three percent non-completion rate. When the official interpretation was applied, this went up to a 30 percent non-completion rate among students. So, of course, the university again experienced negative public relations fallout. Their Vice-Chancellor resigned. They had to repay thirty six and a half million pounds, and their recurrent grant was also cut. So this was a pretty bad situation for the university to find itself in.

Things didn't really get any better for them, and many of you will remember that in 2012 the Home Office withdrew their authority to sponsor international student visas. This was a university that had a reasonable number of international students. After some serious systemic failures were identified in the university, it was found that more than 25 percent of their international students did not have permission to be in the country. A significant portion of their international students did not meet the English language requirements to be studying with the university, and there was no record of lecture attendance for more than 50 percent of their international students.

It's easy for us to sit back and say, well that was pretty stupid of the university. Somebody should have been on the game and somebody should have been monitoring these things. But it's a circumstance that arose. International students were given 60 days to find another course somewhere else or leave the country. London Met lost the capacity to recruit international students for quite some time. They won their capacity back after a legal challenge, but as you can imagine it had a significant effect again on their reputation - both domestically and in the international marketplace. And it was very hard to attract their lost international students back.

London Met got another new Vice-Chancellor in 2009, and he instituted a number of reforms. Under his leadership the number of offerings at the university was reduced from 557 to 167 courses. He closed a number of programs in the university in 2012. 200 academic jobs were cut in 2013. Then another 150 jobs were cut in the School of Business. The university made significant changes to their fee structure and privatised many of their non-academic services. By 2016, their student numbers had dropped to 13,000. Of course you can imagine none of those cuts happened without associated staff unrest, declining morale, and poor media coverage.

It was certainly also the perception that their strategy wasn't clear. There was no clear sense of direction and many staff believed that some of the changes that had been put in place meant that the deserving students whom they thought were part of London Met's core constituency were being turned away. In this new environment, the university again suffered significant reputational damage.

You can see that there are things the university was trying to put in place, but these things just hadn't been working out. 2014, saw the appointment of a new Vice-Chancellor. In 2015, another 165 jobs were cut. In 2016, four hundred more jobs were cut, and two of their three campuses were identified for closure. This was, however, accompanied by a consolidation on to a single campus in Islington. It was also accompanied by a very significant curriculum review. The idea of one campus-one community had a very high level of student support. The aim was to create a real community and campus feeling, and there was a positive response from students and a belief that there were a lot of benefits in having a single campus that really had some vibrancy to it. However, this year when we look at the total enrolment at London Met, it is 10,000 students. They've gone from a university of 30,000 students to a university of 10,000 students and one that is finding it very difficult to survive. Its viability is pretty challenged. This is not a stellar example of how to deal with crises or how to deal with some of that incremental change in the sector.

I think everybody would admit that if we look back at the initial merger, it was not as well handled as it could have been. There was a lot of disquiet, and a lot of staff unrest throughout. It would always appear that there was not a clear and strong vision for the university and to come back to that idea of purpose, there was not a purpose that held true throughout all of the changes. Unfortunately, the two major crises were brought about through a culture of non-compliance and the first crisis did not lead to substantial change or improvement in that compliance. The timeline for responding to the crises and to the change was also not clear, the sense of urgency about the things that needed to happen first wasn't clear, and nothing was clearly communicated. Communication was always quite combative. It was not a sense of 'we are all here collaborating', 'we are all here working together', or 'we are collegial'. As I'm saying some of these things I hope everybody is doing a mental checklist against the way in which we've been demonstrating our own behaviour.

London Met lacked clarity of the vision the mission the purpose and the values that were driving its changes and that were informing what the university would be like. Major effects were very negative on viability, and on reputation and the future. In contrast, I'd like to move to what is a more positive story about a university responding to change.

I'll suggest that you may think this is a measure of success- to move in around about 10 years from being a university whose claim to fame was that it was previously ranked the number one party university in the United States, to being the university that is now consistently ranked the number one most innovative university in the United States. Many of you will know the university I'm talking about - Arizona State.

Arizona State is a public, metropolitan, multi-campus, research university located in Phoenix. It has a number of campuses, - five campuses, four regional learning hubs. And it now has a significant online presence. It was founded in 1958 and had itself been through several mergers. It had antecedent schools, and a teachers' college that expanded to become a much broader higher education institution in the 1990s. While it has an endowment of over six hundred million dollars, it was still a university that was heavily reliant on state funding, which was one of their major challenges.

Arizona State's charter required them to be a comprehensive public university measured not by whom is excluded, but rather by whom is included and how they succeed. Their charter also charges them with advancing research and discovery of public value assuming fundamental responsibility for the economic, social, cultural and overall health of the communities it serves. You could change the language and it would sound pretty familiar to us.

In 2002, Arizona State was the number one party school in the United States. Michael Crow became the president and set about refreshing the university. Central to this was his vision for a new American University which was an egalitarian institution committed to academic excellence, access, and maximum social impact. And that, I think, is a really nice succinct way to describe the values that are at the core of the university. It didn't seek to replicate a gold standard University. Instead, what it was charged and was intending to do was to engage in comprehensive, long range planning that uncovered and fixed design flaws and advanced new and differentiated models for universities. This was a longer term plan - a decadal plan – focused on fundamentally changing the whole university. This meant changes to the way the university thought about itself, the way it structured itself, and the way its organisational structures worked. It was very much driven by a very strong commitment to trans-disciplinarity, and a very strong focus on sustainability and the environment. A lot of work went on around creating trans-disciplinary organisational structures that didn't just inform the way in which academic units were organised, but informed the way everything in the university was organised.

Arizona State was seeking to become very broadly inclusive across all demographic areas. It wanted to provide more education for the traditionally under-served, and it wanted to be much more inclusive in its admissions policies and practices. It wanted to accelerate organisational evolution and to make major change happen in a 10 year time span. Sustainability was at the core of everything they did. It informed the way they created their organisational structures and their academic structures, and the trans-disciplinary approach informed their structures in a similar way. The aims of this redesign of the university and the creation of some new schools were to increase the research profile, to expand student numbers, to expand accessibility, and to increase access to a high quality education.

Arizona State worked on this for a number of years until, in 2008 and 2009, the global financial crisis hit. This was not a challenge that they had anticipated. It was not something that had featured in their long term planning. In 2008, they experienced a cut of almost 20 percent to their state funding. In addition, the State capped the number of new admissions that could attract State funds. So, this put a limit on the number of students Arizona State could enrol. Not surprisingly, during the GFC, philanthropy was down and the return on their corpus was down in the period between 2008 and 2011.

Arizona State's operating budget was reduced by ninety one million dollars at the same time that they were attracting thousands of students - they were dealing with a lot more students off a reduced revenue base. So how did Arizona state respond to the funding cuts that they experienced?

They focused on lowering the cost of producing a graduate. In 2008 their cost of producing a graduate was $68,000, By 2012, it was $56,000. Their reliance on state investment went from $35,000 to $16,000. How did they do it? They raised their tuition fees. They increased their class sizes. They did implement staff cuts (of the magnitude of about 550) during the very worst of their financial periods. They had some of their senior staff on 10 to 15 days furlough, which was quite common in the US at that stage, and they introduced cost saving measures that included purchase reductions, drive energy conservation, and brought in a hiring freeze. In 2009, they implemented a lot of changes to their academic units and organisational structures, moving and merging departments and schools, to maximise efficiency.

They rationalised their program offerings. They consolidated their program offerings and they closed more than 50 programs. At one stage, it looked like they were going to have to close some campuses, but they managed to avoid doing that. So there were a number of things that they were putting in place, and it really was about trying to come up with a much more contemporary design of their structures - particularly their organisational structures. They continued to work to build a distinctive institutional profile building on their strengths.

Arizona State had a federation of transdisciplinary departments, institutes, schools and colleges that kept a focus on that strong sustainability theme. By requiring people to work across their discipline areas, they were able to come up with some innovative solutions to work on very big collaborative projects. They would argue for the strength of the transdisciplinary profile, and about working together better. But this transdisciplinarity didn't happen on its own. It happened in the context of a much bigger organizational reconfiguration. Arizona State managed to grow through this period of financial hardship and challenge by growing student numbers. It did so by engaging in very deep, very significant, and very extensive educational and research partnerships and maximized the use of technology for scaling.

Arizona State also reviewed its planning assumptions and operating models. Through that review, it maintained its commitment to its trajectory and to its values. It was very aggressive in its moves to become more cost efficient. It kept its focus and its energies on developing powerful strategic partnerships. Again, the university stayed true to its purpose. Through all of this, Arizona State was forced to innovate!

We would argue, even now I think, that the transdisciplinary model they put in place was particularly innovative and impressive because of its scale and reach. But, in addition to that, they moved into online education. They did this in 2010 which was about the time that we were starting to see some of the for-profits almost on that edge of decline.

Arizona State entered a major partnership with Pearson Education to deliver its online education. Pearson provided most of the capital and delivered a share of revenue and were responsible for marketing, enrolment management, retention and managing the learning management system. Again, this might sound a bit familiar. In 2008-2009, the university had twelve hundred online enrolments, by 2014, online enrolments were up to 10,000.

Arizona entered a particularly important partnership in 2014. Starbucks announced that it would provide free enrolment online to any of its employees. While this meant that Arizona State got a smaller share of the student tuition fee, they got tremendous publicity. They got great media coverage. It opened up awareness of their online courses to a whole new sector of the market that they really wanted to attract.

At this time, Arizona State has revised their online projections, and their target for 2020 is 100,000 students. Even in 2010, Arizona had adopted an innovative online model. They learned a lot from the for-profit providers and they implemented a lot of the things that the for-profits did. They also leveraged their own advantages as a research university, their credibility and reputation and their curriculum that already existed and didn't have to be started from scratch. They leveraged all of those components of themselves and they learned from the for-profits.

Remember the stories about the for-profits in the period 2010 to 2013 who were enrolling students who were not suitable for university study, who were gullible students at risk of not completing? Arizona State looked at what the for-profits had done that was not effective and decided focus on their admissions, because they wanted to focus on attracting the right students. They wanted to attract students for whom access was important, and students who were going to be able to succeed. This will again sound familiar to us, even in 2017. Instead of using the sort of marketing that the for-profits had been using, Arizona State used search engine optimisation. They used much cleaner websites sites, responsive call centres, and emphasis was on retention, not on enrolment numbers. They focused on admissions standards and student service provision.

Arizona State also partnered very deeply and very strongly with a whole range of tech companies - over 100 of them. Many of you who have been interested in learning analytics will know that Arizona State has been held up as the poster child for learning analytics. They understand their learners. They know when to intervene. They've developed the sorts of things we've been talking about, to provide automated guidance for students about what majors they should choose, what course is the right course for them, what their next subject should be, what a pathway might look like. At the time, this demonstrated a very distinctive focus on student success. Arizona State's focus was always around interaction, around engagement, and around personalisation.

In 2014, their online component generated $94 million in revenue for the university, which made up for three years of budget cuts. Cost effectiveness, throughout all of this, has been one of the key metrics for Arizona State and this has proved to be successful. They've certainly generated student success. They have doubled their graduation rates, their student completion rates are 13% above the national average. They have quadrupled their research funding. And they have enhanced student performance with no increase in staff numbers demonstrating productivity gains. They have successfully diversified their revenue streams beyond State funding to tuition fees, research funding, industry partnerships and commercialisation activities. The university actively promotes and publicises its successes, including its rankings performance. And they continue to grow their on campus and online operations as well. This is an organisation with a very strong focus on its core purpose. It was always clear to see what the end game was here.

So I'm going to not remind you of everything we've talked about today, but if we think about the sorts of measures that we've put in place as a university, we may find ourselves thinking about those components that we can see in Arizona State – the things that made them resilient in times of both crisis and continuous change. Western Growth, and everything that comes with Western Growth - its intention, and its outcomes - are positioning us in the right way. Those projects we identified last year in Transforming Western Sydney are absolutely about creating something that's dynamic but something that stays true to our purpose. I think after today, we might think about what being a university city means for us. We might also reflect on what anchoring might actually mean for us as a way of giving us another touchstone that contributes to our resilience going forward. I think there are lots of things that we're currently doing, and there is much that we can do, that learns from what it means to be resilient. I am going to end by saying it is about being clear about our true purpose and having that guide all of our behaviours and all of our decision-making.

Thank you very much.

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