Here’s a home truth that you won’t see acknowledged very often: modern Canadian universities aren’t one organization; they’re two, each with different values, priorities, and procedures.

The first organization is the one we’re used to thinking about.  It’s the one that acts as a pillar of the community.  It teaches the local kids, and works on local problems.  It measures its success in its ability to attract ever-brighter domestic students, and in winning national competitions for public research funds.  When possible, some international research collaboration and recognition is great, too.  It is heavily regulated, publicly-funded, and acts squarely to serve domestic policy needs.

This is a great organization, no question about it.  It’s the kind of research-heavy, Humboldtian university we’ve all been taught to believe is the bees-knees. The problem is that governments never pay for research the way research universities think it should be paid for.  So they start looking for ways to make a little money on the side in order to make ends meet, and they start a second business to subsidize their core mission.

These second businesses use some of the same resources as their core Humboldtian enterprise, but they have a completely different ethos.  They exist to make money, pure and simple.  It operates where government regulation is weakest – where something like actual competition reigns, and people pay what the market can bear – i.e. in the market for international and professional Master’s programs.  A substantial portion of Canadian institutions now earn over 10% of their income from these markets; there are probably a half-dozen institutions where tuition from these students is approaching total tuition from domestic students.  With government spending on higher education increasing below inflation across the country since 2009, this influx of dollars is pretty much the only thing that has allowed universities to pay for their 4-5% annual cost increases.

But here’s the problem: these businesses require two totally different sets of management skills.  The first business is about collegiality, consultation, deliberation, and the sanctity of academic disciplines.  The second is about speedy response to market openings, a ruthless focus on margins, and de-emphasizing disciplines in favour of more cross-disciplinary thematic programming.   Finding people with the skills to manage either of the businesses is difficult; finding people with the skills to manage both is almost impossible.

This is a major reason universities are becoming increasingly unmanageable.  The folks at the top are trying to ride two horses at once, usually without a lot of training.  The folks in the trenches don’t always grasp that there even is a second business (and many of those who do despise the idea); in part, this is because most institutions kind of backed-in to their secondary business without having a proper strategy, or even a public discussion about it.   The result is a lot of anger and mutual incomprehension.

The first business is where universities earn their reputation and prestige; the second, increasingly, is where they make the money needed to keep that reputation and prestige.  Only the institutions that make both of these enterprises work together, efficiently and harmoniously, will succeed in the coming decades.

*N.B: this idea of two institutions isn’t mine.  I came across it originally in an Australian publication; I would give credit to the original author if I could, but I can’t recollect where I first saw it.