Of Universities and Companies

Of Universities and Companies

 January 20th, 2012

Part I

Many universities all across the world have outlived governments, wars and even survived natural calamities. We can see a testament to their resilience, without naming any specific ones, in the innovative works of world renowned universities that are centuries old. Their sustainability is largely due to the fact that they are an indispensable component of any civilization, are a steering force in societal development and due to the fact that they are “prosumers”. Universities can produce the resources that they consume and hence the dual nature of being a producer as well as a consumer of the very same component affords them a perpetual cycle of prosumerism. The most basic component a university consumes is known as a scholar. It subsequently produces a more erudite and advanced scholar who can be inducted into the operational aspects of the civic institution to process future generations of scholars. Some of these scholars may choose to join various industries.

Industries have constantly sought to achieve the level of sustainability that universities have. Traditionally, industries were the driving force of societal change and had sought steering support from universities and other governmental agencies through the supply of labor force and public policy regulation. Up till few decades ago, industries produced a service or product that was entirely different from the consumables such as energy, raw materials and human labor. Currently, multinational companies and conglomerates are seeking to copy the model used by universities as evidenced most notably by the structural and functional changes adopted by corporations like Google, Microsoft and Infosys that build “campuses” rather than factories. Their emphasis is not only on the product or service they produce but also on the educational growth and personality development of the workforce they rely on. They identified that workforce development is fundamental to being able to cater to market demands as well as being able to inspire the demands of the future markets.

Consequently, universities and various companies are now in direct competition with each other.

Some universities have tried to enter into the domain of commercialization by offering education purely as a service and educational material purely as a product. They have also sought to bind their scholars’ discoveries and innovations as their business property. These things have merely led to the dilution of the esteem that the concept called “university” has. Education industry is fundamentally a social service and this must not be confused with motives of pecuniary enrichments of the managerial staff in such institutes. As a counterpart, companies like 3M, Toyota, DuPont and Google have continued to stay ten paces ahead of such confused universities by resorting to a concept called “intraprenurship”. This is a contrived word that does not have an etymology rooted in French and is a pun on entrepreneurship. These companies allow their employees to carry on personal research and experiments on paid company time. The employees then pitch their ideas to their bosses at regular “elevator pitch” meetings. If a pitch is successful the company allocates more of its resources into the idea, whose owner can, at times, file for independent patent with an agreement to license it to the parent company.

Scholars who found solace, funding, peer support, advanced technological facilities and a culture of innovation in universities are able to find more of the very same in a number of companies along with a greater potential to earn while dealing with much lesser bureaucracy and without the burden of trying to teach uninitiated students who aren’t actually scholars. Universities and corporations are vigorously competing for the small pool of talented and intrinsically motivated researchers.

Well established universities across the globe are dealing with this societal evolution by banking more on their profound inventory of original research, esteem and cultural capita, deep governmental and cross border ties and by becoming more modular through the creation of “centers” that overlap schools of thought. These centers have helped patch the fractures and fissures created by the department system. The overlap also helps accommodate better collaboration which is essential in fostering a culture of innovation. They also overcome the unfortunate funding mechanism that have come to persist in many universities where central funding agencies disburse funds to the head of a university, who then distributes it among deans of various departments, who in turn distribute it to various projects within the department run by individual professors. This funneling effect provides meager resources to individual projects that often need support from multiple schools of thought. The centers prevent the funnel or silo driven funding mechanism by amalgamating funding at a level closer to the primary funding agency and by getting portions of the required funds from multiple funding agencies. Through this methodology the projects are adequately funded and the risk of a total loss is hedged between multiple funding agencies. The probability of the project succeeding is also increased by having a more democratic control process that involves professionals from multiple schools of thought with distinct vantage points that can better address various facets of complex socio-economic and technological problems faced by our society.

The centers conveniently spin out products and services that are commercialized through incorporated business entities owned by the inventive scholars. These business entities are legally separate from the university. They garner support from the university without conflicts of interest by having a Tenant – Landlord like relationship. The business entities rent infrastructure facilities and capital intensive equipment from the university. The universities also provide other benefits such as quick and easy access to academic consultation, very high speed internet, primary access to graduating scholars with whom prior relationships may have been established by the business entities through internships, seminars and conferences. The seminar and conferences also promote business networking opportunities and most importantly, a safe and healthy social as well as physical environment for R&D work.

There are a number of unfortunate drawbacks of this centers and business entities system. The most notable is the fact that many of us scholars are not well equipped with a thorough business acumen to actually do company work at industrial pace. In fact, scholars with such entrepreneurial capacities might be scoffed at in many academic circles. The derision to acquire knowledge in other schools of thought and to expand one’s horizons has been awfully detrimental to academicians and our zeal to be scholarly.

Many of us scholars are not accustomed to working in large teams and don’t have toned skills in conflict resolution. Also, many of us usually tend to lack the aptitude and etiquette necessary to communicate our brilliant ideas to funding agencies that are almost always composed of persons outside our field of research. As such, many business entities being incubated in university based incubators do not take off as expected and what could have been a marvelous invention or discovery in the service of humanity’s progress gets buried in the forgotten troves of history. Furthermore, the social environment within universities is often rigged with bitter political and professional rivalry which hampers the growth of centers and business entities. The other terribly sad aspect of this approach, that surfaces at times, is the fact that some professors use their students to do business work at the expense of the students’ academic progress. Eventually the students get frustrated and quit their masters or doctoral program half way leading to financial and professional setback and extreme mental anguish. The professors also suffer by having their work stalled in both business and academic realm. Lot of professors come into this arena ill-equipped with business management skills and perceive that company work can continue at the pace of research work. Professors also have the added burden of juggling multiple projects, doctoral students, teaching schedules, academic meetings, staff meetings and travel schedules for attending seminars and conferences. All of these stochastically rigged chores take them away from the hands on management necessary in stabilizing a nascent business entity.

Companies in the business realm cope with such stochasticity by vigorously training their workers in time management and soft skills and by banking on retained earnings to pull through initial project phases or times of economic doldrums. They naturally preallocate budget for workforce development, new project explorations and for unforeseen circumstances. On the other hand, in universities the scholars are expected to acquire knowledge and skills at their own expense. And if a new project is to be implemented or an unforeseen circumstance arise the university has to count on its ties to government bodies. Receiving governmental aid is a miserably slow process and many university projects suffer from the consequences of delayed “time to market.” Since, most large universities are government funded and are nonprofit or not-for-profit organizations the concept of retained earnings is not applicable. The concept of contingent reserves in a trust fund or any other similarly structured fund managed by a nonprofit business arm of a university is certainly applicable, right?

Part II

Quite sensibly, universities and companies (both, private or public) have sought to work towards partnerships to promote win-win situations and avert zero-sum-games.

The most immediate and obvious channel for the two sides to connect is through alumni relations. Universities wisely bring back their alumni into administrative positions and other teaching positions rather than merely soliciting donations from those graduates who might have found employment elsewhere. Not building up alumni relations is terribly unwise. A university teaches scholars to become experts in various practices and not allowing the graduated practitioner to implement their practice within the university is miserably counter intuitive. It sends a message that the university does not trust the value of the certificate it issues.

A university has various needs such as communication networks, infrastructure design and construction, human resource development programs, accounting services, etc. and rather than letting their own scholars who have graduated and become certified in these areas tackle the problem, the university force the alumni to find a job in a company and then pay much higher contracts to the company where the very same alumni is finally allowed to tackle the university’s issues.

Nevertheless, there are a number of niceties that these certified graduates become aware of once they step outside the universities’ safe confines and deal with a wider array of personal and professional challenges. There is certainly a vital nugget of knowledge and experience that is to be gained in the free-for-all, worldwide arena which, isn’t driven by rigorously vetted ethical rules and regulations. So, mature companies can help universities by letting their senior employees provide insights into their work life as paid guest lecturers and universities can provide customized lectures to individual companies. And as a means to support entrepreneurship, the post-graduate education and credibility that an alumnus receives in a university can be given to them in a company of their own while being incubated at the university with the help of its industry partners. This will also contribute to “corporate social responsibility” initiatives of the industry partners adding to their brand value and name recognition. Companies can also benefit through academic relations by saving on costs for exploratory and experimental work which is necessary in research and development activities that will help the company stay relevant in changing market conditions.

Another avenue for collaboration is consolidating resources by trading usage time on infrastructure and other fixed assets apart from trading personnel through “duel appointments” as long as conflicts of interest can be managed. There has always been an attempt to achieve such a thing among all organizations. Current process is as such: organizations send out a tender for their need and pay in terms of financial instruments. The whole process of acquiring the tender is a cumbersome bureaucratic overhead that a select few companies understand and thereby cronyism and nepotism is not abated. What is being proposed here is a system more on the lines of barter and trade.

It is a philosophically challenging task to ascertain what value certain hours of usage time on a particular machine has and how that value equate to time usage on another machine in some other location. Or think about how much one professional’s time and effort equate to in terms of some different professional’s time and effort. Coincidentally, all these philosophical qualms are already tabulated by ministries of labor and the equivalent value is then translated to financial tokens using additional assumptions. The proposed notion here is to revisit those additional assumptions as they are miserably susceptible to money market indices which universities are not a party to. For instance, money market fluctuations can afford an unfair advantage to corporate vendors who can justify changes in the pricing policy for their post sale services, promised upgrades and supplementary products/services after the initial contracts have been awarded to them, leaving the university reliant on a vendor the way a terminal patient might be dependent on a dialysis machine. Ironically, those assumptions that tie the concept of value to the concept of money are devised by economists sitting in universities without realizing that universities do not have publicly traded shares. Due to this fact a university’s overall worth and socio-environmental impact cannot be evaluated by the same frameworks used for evaluating a company’s overall worth and impact.

The above mentioned idea of directly bartering physical resources is certainly not a novel one and it is already in practice in the medical industry where there is, practically, an ever present shortage of specialized professionals and equipment within most hospitals. And coincidentally, market indices do not change the value of a patient’s life. So the medical industry at large deals with their situation by either allowing medical professionals to solve the “traveling salesman problem” on their own or by letting the patients deal with that mathematical dilemma. We can observe the way doctors travel from one hospital to another as “consulting doctors” or the way patients run from one hospital to another depending on where a doctor or equipment is available. This method certainly isn’t an elegant solution to the larger problem of finite and coveted resources being coveted by a large mass of people but it happens to be worthy attempt, in my view. All this running around can lead to other problems that stem from a lack of medical history awareness at the caregiver side due to broken continuity and consistency of a relationship between the care giver and the patient. The new problem of an ill-established or mismanaged relationship can lead to terrible slips and errors of commission or omission where patients accidentally loose life or limb. However, some resourceful hospitals employ management who can solve such scheduling issues with knowledge of critical path modeling, content resource management and use of various information technology tools so that the care givers and patients can move between partner institutes without encumbrances. Similar practices are also evident in the aircraft industry where airlines partner to better serve travelers.

Since, relationship management among institutions is a problem in the information domain of shared knowledge and in the sociological domain of inculcating intra-organization trust, the solution should obviously come from better implementation of public policy and information technology. Universities are typically the masters of public policy research and companies have become the masters of information technology research. So clearly there is an avenue for partnership and closer association. Naturally, various universities and companies in various countries woke up to this realization a few decades ago and started adopting regulations and technologies that have helped them become adept in collaborative practices known as vendor relations management (VRM) and partner relations management (PRM).

Interestingly enough, universities were actually the very first institutions to catalog their resources and get connected with other universities all over the planet through internet enabled technologies. One of the most useful and incredibly strong theory of doing industrial scale work that came about through such activities was the notion of parallel computing using very large clusters of processing units spread all across the world. Businesses capitalized on this notion and went ahead and branded it as “cloud computing” and sold it back to the universities. But it would be unfair to say that they merely repackaged an existing theory. They did make further advancement in the method of implementing theories of synergetic work through the development of redundantly backed-up data centers, customer relations management (CRM) tools and enterprise resource planning (ERP) tools.

It now needs to be seen if governments, universities and companies can think of each other as a trinity of elements, rather than a pair wise trichotomy of elements in the set consisting of vendor, partner and client. Doing so would extend the sustainability cycle that each have developed in their respective operations to envelope a larger worldwide society of thinkers and doers.

In conclusion, it can be noted that we now live in an era where it has become necessary to be the jack of all trades and the master of quite a few. Scholars and employees alike have to adopt this notion to fight off obsolescence. Our times do not afford mankind the luxury of taking steps that are any short of giant leaps. But, a simple and economic way of taking giant leaps is to have many concerted short, measured steps. And a simple and economic way of becoming the master of many trades is to bring quite a few masters as one cogent unit. These methods can stay simple and economic provided that we become an educated and ethical global society with trust enabling philosophies, frameworks and methodologies. We can achieve abstract precepts such as growth and development through practical actions that involve presumption of good faith towards one another and by shedding our prejudices and unfounded biases towards various groups of people. It is our diversity that truly helps us overcome adversity. And the task of putting one’s guard down to embrace a fellow human being involves a great deal of self respect — a fortified notion of self confidence that can accommodate the risk of being harmed by the human we choose to embrace. This self confidence also helps us cope with unforeseen circumstances that unfold while in no way being the fault of the people we chose to accept as our kin and kith. Now, is self confidence an abstract notion or a practicable conditioning of the psyche is debatable but, even if things turn out to exist on higher planes of abstraction they are not to be dismissed by virtue of their abstractness.

The abstract plane at which universities and companies have to come together cannot be measured by any physical plumb or rule and cannot subsequently be erected by any physical crane or lewis. It can only be measured by the virtue in the hearts of those individuals who constitute such organizations and erected by their mental ties of shared responsibility.

Sameer Khan

CEO & Founder of Pratimaan LLC

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