The Consultants Aren't the Problem

Viewing universities through an MBA is revealing, but, occasionally, generic advice sits at odds with their unique structure. Glen O'Hara's FT piece on management consultants in universities resonated, where he argues against institutions seeking "cookie-cutter consultancy". But something nagged at me - O'Hara's analysis mistakes the symptom with the disease. Universities do not have a consultant problem; they have a strategic capability vacuum.

While O'Hara asks us to reconsider why we are hiring consultants, the real question is: why can't the sector do its own strategic development?

Product Innovation vs. Strategic Innovation

In Loonshots, Safi Bahcall writes about two types of innovation: P-type, where the output is revolutionary products and services, and S-type, where the innovation is in how the organization captures value and delivers its mission, rather than just what it produces. Universities are the archetype P-type innovators: producing new knowledge and transforming graduates is literally the job. Despite variations across the sector, the "product" being offered remains strong.

Unfortunately for universities, S-type, not P-type, disruption kills successful organizations. A change in the underlying operating model can quickly lead incumbent models to be obsolete - and without a business model, the best product in the world is meaningless. In other words, when institutional failure occurs, the science has not declined: the strategic delivery has.

What does successful S-type innovation look like in practice? The Universities of Strathclyde and Cranfield are great examples: neither are Russell group and neither are the biggest or strongest in their own geographic area. But they both reoriented their operating model around a specific way of working: Strathclyde through embedding the first Fraunhofer centre in the UK with a historic motto of "The Place of Useful Learning", and Cranfield by capturing the market for Ministry of Defence postgraduate education.

Yes, both institutions are universities that deliver teaching and research. But both made textbook S-type moves: making clear strategic choices to capture and own operational segments.

Strategy as Theatre

The Toxic University reflects the too-commonly seen alternative. Successful institution planning documents become expanded vision statements - goals without means, budgets without resources, processes as performance, and no ownership of compromise or prioritization.

When planning documents exists to signal direction rather than to determine it, the organization has already lost strategic capability. If they don't reallocate resources from legacy activities to new goals, they are not a strategy but a brochure.

Such documents are inherently P-type, reflecting tweaks to teaching, education and research. It is the missing gap in S-type thinking - where we ask what activities the organization wants to own - that leads to outsourcing of strategic thought. Enter the consultants.

O'Hara's solution is clearly stated: academic self-governance and more power to the frontline. But this approach is tried and tested - and will simply reproduce the existing problem, because the frontline academic role is explicitly designed and rewarded for P-type output.

At national level (REF, TEF) and institutional level, academics are rewarded for publications, teaching quality, admin efficiency, grant income, impact-generation. Spending three years to develop a coherent industrial engagement strategy, redesigning PhD programmes, or building data-driven recruitment models? Not so much. The institution may need this work, but the incentive structure punishes it.

This is not a criticism of academics in leadership roles or outside of them. Successful S-type disruptors do come from within the faculty. But the role structure and KPI's are fundamentally misaligned.

Why Self-Governance Isn't Enough

Universities must deliver on teaching and research; and research-intensive organizations need to exploit their capabilities. S-type innovation requires fundamentally different organizational muscles.

Organizational ambidexterity is the ability to excel at present while exploring the future. Bahcall calls these functions "artists" and "soldiers" - the explorers and the executors. The self-governing model is proven for P-type innovation - producing the best versions of teaching and research. But it is a poor model to undertake structural exploration required for S-type innovation, particularly where exploration threatens or questions existing power structures and rewards systems. It is no surprise when leadership search beyond the organization for unencumbered (but ultimately generic) strategic insight.

At Oxbridge college scale, with sovereign-level endowments and centuries of accumulated reputation, organizations can afford to move slowly. But at the scale and financial exposure of many Russell group universities, this approach is borderline irresponsible. We must take responsibility for our own S-type journey.

Strategic Innovation

S-type innovation is possible - but requires leadership.

The question is whether universities are genuinely willing to reward faculty to develop strategic capability from the inside - not as a distraction or a hobby, but as a recognised and valued contribution in its own right. We do not need to turn all academics into strategists, but we must reward experimentation within the organization to explicitly undertake S-type structural exploration.

Without that reward, the faculty incentive is clear: do the P-type work that gets you noticed and promoted, and leave the S-type gap for someone else to fill. That someone else might just have a day rate and a slide deck.

This is already playing out. Hiring consultants who do not understand the context, implement generic frameworks, and leave. Capability is not grown, a vacuum remains, and in three years - assuming you are still solvent - you hire them again.

O'Hara is right that consultants are damaging the sector, but not about why. The locusts, as he puts it, aren't the cause of the harvest failure. They're the signal that the farm has stopped tending its fields.