Universities need COOs, CFOs and other specialist senior managers

For generations, the university executive board has been a tried and tested structure for the management of higher education institutions in the UK and elsewhere. But as operations diversify and the accompanying commercial pressures ramp up, skills gaps are emerging, and university boards face an urgent need to embrace new leadership positions.

While the vice-chancellor and deputy vice-chancellor roles remain relatively unaltered, three professional services roles in particular are emerging, alongside a global move towards a more corporate-like leadership structure, with greater focus on leadership ability than on academic credentials.

Universities have become much more than academic institutions. Their interests can span far beyond education, into the likes of publishing, enterprise and professional qualifications. Overseeing all these areas goes well beyond the remit of the traditional registrar: welcome to the world of the chief operating officer.

We first started seeing this job title – or, at least, the term used as part of the job description – about three to four years ago. The industry is still yet to agree a set of standard responsibilities, but they are likely to include strategic leadership and operational planning of human resources, information technology, marketing, estates, finance and registry and admissions.

The role’s precise form depends on exactly where a university is in its journey. From what we see, there are three types of COO coming to the fore: the “executor”, the “governor” and the “change agent”.

The first is hired when an institution needs someone to implement a predefined strategy and plan. The governor, meanwhile, oversees corporate functions and governance. But, within challenger institutions in particular, the change agent is rapidly rising in prominence. These COOs, often in an interim capacity, are tasked with delivering a specific project of significant change, such as overseeing the turnaround of an organisation or a major building programme.

We’ll no doubt see more internal promotions to such positions in time. But there is not currently a deep enough internal pool to draw from, so universities will probably have to look outside education, and perhaps outside the public sector altogether, for candidates with the appropriate commercial expertise.

Meanwhile, financial directors are in effect becoming corporate-style chief financial officers, with more input into university policy and decision-making. But while some executives have made the step up, many universities have struggled to manage the transition and find a candidate with the breadth of experience to meet the needs of a role that has extended to include fundraising, capital allocation, portfolio asset management, mergers and acquisitions and financial planning and risk. Hence, a need is often felt for people with a background in investment, as well as, perhaps, private equity, wealth management or investment banking.

The job of the CFO is not made easier by the pervasive economic uncertainty over universities’ ability to raise funds through capital markets or from the government to sustain operations and fuel ambitious projects. But alumni are a rich and relatively untapped source of revenue. Hence, the standing of alumni relations has grown exponentially in recent years, and the new position of director of development and alumni relations has emerged.

In the UK, such posts have previously been largely confined to Russell Group universities. Hence, while there are some great operators already working in this space, there is a general dearth of experienced people able to deliver effectively. Universities are searching desperately for those who can bring vision and innovation to their alumni programmes, while also possessing the gravitas and networks to engage with prospective major donors and solicit impactful gifts.

There is no doubt that a step change in governance is needed to navigate what will be choppy waters ahead. And it is only right to expect leadership teams to evolve and adapt to that challenge. But while we expect executive boards to diversify as talent is drawn in from other sectors, the trick, ultimately, is simply to find good leaders, no matter what their background.

Sarah Shaw is a partner and head of the education practice at Odgers Interim.