The reason a manufacturing plant exists is to produce product. Everything that directly produces product creates external value and should be considered primary. Everything in the plant that does not produce product is there to support those people and systems that do. That is how they create internal value and should be considered secondary. The needs, desires, or preferences, no matter how legitimate, of secondary entities should never outweigh the legitimate needs, desires, and preferences of primary entities unless there is a compelling, customer-value-based reason for doing so.
This is true for manufacturing plants. It is also true for fast food restaurants. And hotels. And landscapers. And, yes, universities.
The reason a college exists is twofold: to produce research and to teach students. In other words, its raison d'être is to generate and disseminate knowledge. Faculty are the primary agents involved in research and teaching. As a result, faculty are primary resources.
In contrast, administrators and staff are secondary resources and are ultimately there either to help the faculty do their jobs or to help students with their needs. Even someone as obscurely related as, say, fundraising is connected in this way. Fundraising staff support the Dean or President, who is supposed to generate and resources that enable research and teaching.
If there is a productivity loop within the organization that doesn't ultimately end in research and teaching, one has to question why it exists. Many colleges and universities have forgotten this basic, common-sense concept.
Also, colleges are increasingly shifting administrative burdens away from staff to faculty (e.g., requiring faculty to process their own travel reimbursement paperwork). This makes zero sense. Why would you ask an employee who can produce primary value (in this case, do research and teach) to do the job of someone who cannot, especially when they're paid more? It would be like having the surgeon clean up the OR after a procedure instead of simply walking across the hallway to another patient who's ready to go.
Ultimately, every organization has a core mission. If someone or something's contribution to the mission isn't clear, it should be scrutinized for possible removal.
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When we let politics trump science, people are needlessly put in harm's way. http://arstechnica.com/science/2017/01/self-censoring-fears...
We can keep your framework but substitute different goals, arriving at something that's a closer match to reality.
ReplyDeleteSpecifically, you say that the reason for a college's existence is to spread knowledge. What if it was, instead, to make money? If so, then professors are now secondary and fundraisers are primary.
Steve S then you get colleges that recruit unprepared students to meet quotas, abuse the student loans system for profits (saddling students with massive debt), get rid of faculty in favor of contract Adjuncts, and graduate students with useless degrees that will not gain them emplyment.
ReplyDeleteNo degree is useless. Unless you truly believe you wasted your time, in which case you may be right. I didn't use my undergrad degree directly for employment for 14 years, but use it I did. And I used that experience to get more work later—after a 5-year gap. You can literally do that with any degree.
ReplyDeleteOf course, that's just about the degree itself and not the entire college experience. A lot of my non-degree undergrad work certainly applied in between. Why people choose not to call on their schooling (or other life experience) later to their advantage, I just don't get.
Dan Eastwood Sounds familiar.
ReplyDeleteGeorge Station I agree that any degree will do IF you actually acquire the skills. Most decent schools do a good job of this. Certain For-Profit online schools, not so much.
ReplyDeleteAccredited degrees can open doors. Then you have to prove your competency. After three semesters in a formal university setting, I enlisted in the US Navy (Submarine Force), completing a BS in Mathematics and General Science on active duty tuition assistance at night and correspondence over a nine year period. The degree got me an invitation to attend Officer Candidate School and 11 more years as a commissioned Submarine Officer. That got me recruited as a Program Manager with Computer Sciences Raytheon at Cape Canaveral in 1988. That plus a MS in Management at night on the GI Bill got me recruited by Merrill Lynch as a Financial Advisor 21 years ago. Throughout my "free" education the vast majority of my instructors were grad students and adjuncts. Real professors generally don't teach at night. A degree can be a minimum requirement, but the real question you should ask your employer is what did they see when they saw you coming? We don't necessarily get hired for what we know, but rather for what we have done. This applies to keeping your job at whatever level you reside.
ReplyDeleteSteve S I work for a state university. We're about as non-profit as non-profit gets. If our mission is anything but to generate and disseminate knowledge, that will come as a massive shock to our faculty. #disillusionmentishard
ReplyDeleteCraig Froehle The rack and stack of University compensation will show you where the profit motive resides just like any other corporation.
ReplyDeleteJust to close that loop, my higher-ed teaching experience is at one federally funded institution and one state-funded institution. Both must by law be non-profit, but both actively solicit and accept private donations, from alumni and others.
ReplyDeleteOh, and both really love research grants, federal and other.
ReplyDeletePretty much everyone loves free money.
ReplyDeleteYou have to watch when it starts to drive (as in divert) the core mission of the institution, though.
ReplyDeleteThe Universities are becoming corporations that generate profit. The administration is absorbed with directing as much of that profit into their pockets as possible. Teaching is secondary. One only needs to look at the amount of money that is expended on their pay and bonuses. It is the same with corporations in general. They are "top heavy" the CEO, and management absorb an inordinate amount of money in pay, stock options and benefits.
ReplyDeleteRay of Sunshine You misunderstood and/or misstated what I wrote. I clearly did not claim that anyone who isn't faculty is "unimportant." Let's recap:
ReplyDelete"administrators and staff are secondary resources and are ultimately there either to help the faculty do their jobs or to help students with their needs."
and
"If there is a productivity loop within the organization that doesn't ultimately end in research and teaching, one has to question why it exists."
The key issue is where the chain of value stops. If anyone can tie their role, either directly or indirectly, to producing research and teaching students, then they're contributing to the mission of the institution. If they can't, well, then I have to wonder why that role exists.
For example, let's take housekeeping. They don't do research and they don't teach, but they help keep the physical facility clean and orderly, which helps faculty focus on research and teaching as well as promotes student learning. So, clearly, housekeeping's value stream ends directly within the mission of the organization and so are a valued part of the overall team.
As another example, let's say there's a bureaucrat whose efforts seem to be primarily oriented towards justifying his own position...creating rules and procedures that simply concentrate power in his hands or limit others' ability to get the information they need to do their jobs. There's precious little value being generated there towards research and education, so let's remove that role and see what happens. I suspect not much bad will result.
Ray of Sunshine, for smal size organization, your post applies. But when it reaches a certain size, there will always be primary and support structures. Even in a startup, you need support "structures": accounting or HR for example. Legally, you can't close your yearly account yourself. It needs to be audited. But this is not primary function of a company.
ReplyDeleteThe issue is when these support structures start to dictate how primary function should be, not to optimize it but to optimize the support structures.
Let's take simple example: ERP implementation. I have seen repeated disruption of productivity with SAP implementation. The typical remark I heard was "it's not SAP to adapt to the company but the company to adapt to SAP".
Another classic. I have been involved in many information and knowledge management audits in oil and gas companies (I did around 12). Every time, the recurring leitmotif is "are you guys going to mess up my way of working ?". Because engineers are fed up of IT "restructuring and optimizing workflow" while in fact, they just opting their own jobs. 65% of information management projects in oil and gas upstream are failures. Just because of this simple reason and the lack of middle management (usually engineers) commitment. So my job was /is to observe and try to disrupt as little as possible the existing processes. When the processes are not optimum, I give recommendations to change it, not to fit a potential new solution but to fit the primary aim of an oil and gas company: find hydrocarbons at cheapest and safest possible ways.
Either you are a startup or a 150,000 employee corporation, you can't escape that division.
Steve S Becareful what you incentivise for. You'll get it.
ReplyDeleteAll economic enterprises, including charities, must at least breakeven over time. Losses cannot be sustained indefinitely. Production cannot exist in the absence of support, infrastructure and administration in education, any less or more than any other organization. At the end of the day, product value determines whether the organization will survive.
ReplyDeleteMac Baird Not necessarily true.
ReplyDeleteThey can survive on structured donations or transfers, for example.
The myth that the market rewards all efforts has been exposed for a very long time.
Mac Baird As Karl Marx wrote:
ReplyDelete"The third and last duty of the sovereign or commonwealth is that of erecting and maintaining those public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain. The performance of this duty requires, too, very different degrees of expense in the different periods of society."
Oh, there I am, wrong again. Adam Smith, Wealth of Nations.
en.m.wikisource.org - The Wealth of Nations/Book V/Chapter 1 - Wikisource, the free online library
Edward Morbius The Government can fund whatever it wishes for as long as it wishes, but even Governments entities eventually fail, as many have, due to running debt beyond a sustainable level. Most recently, Porto Rico has entered default, and Illinois has been downgraded to less than investment grade. Half of southern Europe is in distress. Argentina, USSR, etc. are among many nations that have failed in the recent past. When the US has another recession, watch what happens to our debt to GDP ratio and ranks of the unemployed who will be laid off to cut costs. Breaking even or running a surplus are the only sustainable options for business or Government. For the Government, breaking even would be a debt to GDP ratio of 100%, which we are currently exceeding. I would add that climate change and rising sea level will create the largest wealth transfer from the poor to the rich in this nation's history, and that threat will soon become apparent as real estate values collapse when insurance pulls back from the coast, creating another banking Financial Crisis that will make 2008 look like the good old days.
ReplyDeleteMac Baird That was not your initial argument.
ReplyDeleteIf you'd like to open a ticket for a new argument, please deposit a quarter in the box and await issue of a new ArgumentID.
Please move the goalposts back to their original position after you're done with your dragging exercise.
Also consult the concept of "currency sovereign". I recommend as well Smith's chapters on currency depreciation.
Thank you for your cooperation.
Edward Morbius It was you who said "they can survive on structured donations or transfers". That is what Government funding of education is, a form of wealth transfer. My point is that funding and employment in education is at risk in a Financial Crisis or even a deep recession. We are already seeing deep cuts to research and education in the pending Federal Budget, and that means layoffs next year and beyond.
ReplyDeleteMac Baird Again, that is out of scope.
ReplyDeleteCheers, mate.
Edward Morbius If you insist, I thought the subject was the economics of public higher education.
ReplyDeleteRay of Sunshine said: "...if you view yourself as the be all end all..."
ReplyDeleteAnd there's yet another misinterpretation of what I said. If I had a less positive view of you in general, I might think you're mischaracterizing what I'm saying on purpose just to have something to argue against.
A neurosurgeon shouldn't be mopping the OR floor. A 757 pilot shouldn't be restocking the galley. An architect shouldn't be buying the company's office supplies. And a research professor shouldn't be filling out expense reports. Any company of any size should have staff that do those things so that the more specialized (and typically more expensive) resources stay busy creating things of value. Telling an expensive, specialized resource -- be it a pilot or a graphic designer or a physicist -- that her/his time is equally well spent both flying a plane/generating art/doing physics and taking out the trash or filling out paperwork suggests that the organization really has no idea how to value the time of its employees.
The idea that everyone's time in an organization is equally valuable is nonsense. I don't know of too many companies where every employee is paid the same, regardless of role.
Let's take a simple two-employee company as an example. There is a software engineer and her administrative assistant. The assistant makes $10/hr while the engineer charges $150/hr for her consulting time. The engineer can do any task in the office, but the assistant can only do admin tasks. Should the engineer do all the technical work and split the admin work 50/50 with the admin just to make it "fair?" No, of course not...that would be dumb. The engineer should do the technical work and the assistant should do the admin work. If there's leftover admin work after the assistant's time is consumed, and the engineer has some capacity, then she should step in and help. But if the engineer is 100% allocated doing the technical work that contributes directly to the mission of the organization, then there is no reason to request her to take time away from that and help the assistant do his job.
In this example, the assistant is in a secondary role because he does not directly produce external value for the organization. He helps the engineer produce external value, thereby producing internal value. To sum up everything I've been saying, each role in an organization should either produce external value or produce internal value. If someone isn't doing either, why does that role even exist? Primary vs. secondary doesn't imply worth -- it simply implies where a role is in the value chain. It's like the "secondary" in football isn't inherently less important than the front line; it's just in a different role.
Craig Froehle The secret of success is helping other people be successful. Leadership at any level in any organization is about inspiring others to accept your destination situation as their dream and effectively coaching them in achieving their dream. There is no difference between your University and my nuclear submarine. They each have a hierarchical structure, but each person depends on every other person to do their job and do it well. If there are weaknesses, people help each other overcome those weaknesses. The experienced and knowledgeable assist others advance along their path. We lead by example, and occasionally that means getting your hands dirty doing stuff or helping other people do stuff that you normally would not do because of your rank or role. In my nuclear submarine, we don't get parochial. No one says "Not my job." The organizational mission is too important and too dangerous. Even the cook has to know his way around the engine room to assist in a casualty situation, just as the Officer of the Deck acts for the CO or the Assistant Weapons Officer acts for the Weapons Officer, if otherwise occupied. One's role is less important than the mission.
ReplyDeleteMac Baird I'll give this one final attempt.
ReplyDeleteYou wrote above "All economic enterprises, including charities, must at least breakeven over time."
I pointed out using a noted economic authority, that this is simply not the case. I've gone back and bolded the central premise of that quote, for your benefit.
Something is wrong with your premise -- either charities are not economic enterprises, or they need not, based on normal economic transactions, which is to say, payment for goods or services provided, "breakeven".
Smith is a dated reference, yes, but we can list any number of still-breathing economists who will make the same point.
You've tried now, several times, to steer the discussion to the matter of the national budget and asserted the necessity of it being balanced, for which I can only suggest you look at some real life data, perhaps the US Federal Budget and deficit of the United States over the course of the 20th century and beyond, which suggests that, at the very least your assertion fails the 100 year test.
And, frankly, that's not the argument I'm interested in right now. It's not the point Craig Froehle anchored this post with. And it's certainly not what I've been discussing.
Now, if you'd like to either clarify your initial position in the event I've somehow misunderstood it, or admit that perhaps the condition you've expressed as necessary is in fact not, we might find some room for further discussion.
But in general, I don't find conversations with those who are one or more of a) sufficiently free with interpretation of their words that black is white and vice versa, b) unable to understand my own earnest attempts at clarity, and/or c) unwilling to admit error, offer much by way of profit perentage.
I do insist that my conversations at least break even over time.
Perhaps you can apply for a federal bailout.