Performance Measurement and Strategic Goals 25 Jun 08 Performance Measurement and Strategic Goals Sean Wellington Acting Head of Research and Information Unit +44 (0)

Performance Measurement and Strategic Goals 25 Jun 08 Overview of presentation Key issues and challenges Performance measurement: HEFCE and CUC perspectives Existing practice: UK higher education institutions Implications for policy and practice Concluding remarks Questions and discussion

Performance Measurement and Strategic Goals 25 Jun 08 ‘I often say that when you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the state of Science, whatever the matter may be.’ Lord Kelvin (Sir William Thomson), 1883

Performance Measurement and Strategic Goals 25 Jun 08 Key issues The sector continues to experience considerable turbulence and change Mission differentiation – no single definition of ‘success’ Measures are hard to define and often quantify past or current performance, rather than give an insight into the future Goals and indicators of success should be externally referenced Monitoring information is needed by: University leaders and managers The governing body (often in the form of Key Performance Indicators) Goodhart’s law - ‘When a measure becomes a target, it ceases to be a good measure’

Performance Measurement and Strategic Goals 25 Jun 08 ‘higher education’s most critical goals are difficult, if not impossible, to measure’ (Birnbaum, 2001, p.84)

Performance Measurement and Strategic Goals 25 Jun 08 ‘If you want to fatten a pig, you don't keep weighing it.’

Performance Measurement and Strategic Goals 25 Jun 08 Funding council guidance (1) Strategic planning in higher educations: A guide for heads of institutions, senior managers and members of governing bodies (HEFCE, 2000) Advocated a three stage planning process: Planning – environmental scanning and assessment of internal resources, leading to the generation of ideas and decisions, typically to undertake new activities, make improvements or discontinue selected activities; Documentation – document the plans; Implementation and monitoring – action must be taken to achieve the agreed goals, monitor progress or non-achievement in order to adapt the future strategy.

Performance Measurement and Strategic Goals 25 Jun 08 Funding council guidance (2) Outputs from the planning process include: A long-term plan (the Strategic or Corporate plan) which includes the overall vision and strategy, long-term objectives and how these are to be achieved; An operating plan (or statement) which distils the actions required in the year ahead; Actions necessary to effect implementation; Monitoring reports and information to indicate progress or non- achievement.

Performance Measurement and Strategic Goals 25 Jun 08 Funding council guidance (3) Monitoring should take place at various levels within the organisation, with the nature and frequency of reporting determined in advance Monitoring should include an overview of progress towards meeting the strategic goals, it is suggested at least annually, reporting to the senior management team and governing body Monitoring information should provide the appropriate level of detail and avoid unnecessary duplication. Information may be provided in a variety of ways, for example verbal or written reports from the senior manager responsible The monitoring system itself should be subject to periodic (and perhaps independent) review The role of governing body will depend on the instrument and articles of government

Performance Measurement and Strategic Goals 25 Jun 08 CUC guidance CUC Report on the Monitoring of Institutional Performance and the Use of Key Performance Indicators (CUC, 2006) Top-level summary indicators (“super KPIs”) 1. Institutional sustainability 2. Academic profile and market position Top-level indicators of institutional health 3. The student experience and teaching and learning 4. Research 5. Knowledge Transfer and relationships 6. Financial health 7. Estates and infrastructure 8. Staff and Human Resource Development 9. Governance, leadership and management 10. Institutional projects

Performance Measurement and Strategic Goals 25 Jun 08 HEFCE performance indicators Published for all UK higher education institutions and cover four main areas of importance to the funding councils: widening participation progression and retention research output employment outcomes External performance indicators are unlikely to align fully with institutional goals and ‘tend to be disconnected from the internal life of institutions’ (Watson and Maddison, 2005, p. 57)

Performance Measurement and Strategic Goals 25 Jun 08 Review of existing practice (1) Based on a sample of UK university corporate plans: Emphasis on league tables, for example: ‘The University has a clear and simple objective; to move by 2010 from being in the top thirty in the UK to being in the top twenty.’ Some poor alignment between strategic goals and measures or indicators of success, for example: ‘To enhance our relationship with employers with which we are already in partnership focussing on building the reputation of the university’ Large numbers of high level objectives (HEFCE recommends between 8 and 12, each with 3 or 4 operating tasks)

Performance Measurement and Strategic Goals 25 Jun 08 Review of existing practice (2) Assigned responsibility (individual or group) for delivery of component strategy objectives Objectives have success indicators Interim indicators of success stated and used to monitor progress towards the strategic goals Embedded arrangements for monitoring progress Embedded arrangements for review and update of the corporate plan

Performance Measurement and Strategic Goals 25 Jun 08 Good practice Establishing a relatively small number of strategic goals; Employ interim milestones to help monitor progress and provide impetus for change; Monitoring takes place at various levels and measures pervade the organisation; The nature and frequency of reporting is determined in advance, while the monitoring system itself is subject to periodic review; The information collected is used to enhance institutional performance and inform decision-making; Information about progress against strategic goals is routinely and regularly shared with stakeholders.

Performance Measurement and Strategic Goals 25 Jun 08 Concluding remarks Strategic goals in higher education are difficult to define and measure, however each institution should identify its own key indicators of strategic success, relative to its competitors and comparator institutions League tables based on (arbitrarily) weighted combinations of performance indicator scores do not provide a sufficient or adequate basis on which to assess university performance Any measurement system will be imperfect, with continued care needed to guard against unintended consequences

Performance Measurement and Strategic Goals 25 Jun 08 References Birnbaum, R. (2001), Management Fads in Higher Education. San Francisco: Jossey- Bass. CUC. (2006), Report on the Monitoring of Institutional Performance and the Use of Key Performance Indicators. Sheffield: Committee of University Chairmen. HEFCE. (2000), Strategic planning in higher education (2000/24). Bristol: Higher Education Funding Council for England. Watson, D. and Maddison, E. (2005), Managing Institutional Self-Study. Maidenhead: Open University Press.