What can universities learn from punk?

"And you thought that we were faking / That we were all just money making / You do not believe we're for real"

So sang John Lydon in his bitter rant against recording giant EMI after their contractual arrangement collapsed in acrimony at the height of their fame. The saga also involving A&M Records is the perfect example of poor vendor-supplier management and highlights the distinction between efficiency (pressing and warehousing of multiple 7-inch units of plastic) and effectiveness (pointless if shops can't get it or won't sell it).

When God Save the Queen was finally released in May 1977 on Richard Branson's Virgin label, it controversially reached number two in the UK Hit Parade. On the strength of their financial performance, the Sex Pistols were named Young Businessmen of the Year by Investors Review. But what has punk got to do with university business? One word. Disruption.

And you thought that we were faking

Like it or not, the radical changes to university funding introduced by the coalition government on the back of the Browne Review are well beyond the point of no return. Yet despite this new financial reality, the notion that somehow universities are 'faking it' has taken hold in some quarters. In part it's easy to see why.

UK higher education remains an international success story, ranking alongside financial services, creative industries and defence as world class economic sectors. Allegedly bloated on student fees and posting record surpluses, universities have been accused of being awash with cash. If only.

As ever the true picture is far more complex. For example, the lion's share of the sector's record 2010/11 surplus was made by one in five institutions. Fallout from the financial crisis continues to place severe constraints on public funding likely to last until the end of this decade.

The Department for Business, Innovation and Skills (BIS) is non-ring-fenced and has a tough fight ahead with the Treasury over its dwindling resource, oversubscribed by worthy claims. Universities themselves must be seen to be doing some of the heavy lifting. Rising energy costs, a volatile international market and closer to home pay and pensions all add to the financial strain.

That we were all just money making

UK universities simply have no option but to find new and innovative ways to save money by being efficient and effective, in addition to making more of that money through diversification. But in pursuit of these complementary and rational activities, universities run the risk that both are seen simply as a means to an end in themselves. Nothing could be further from the truth.

Without cash reserves driven in part by enhanced efficiency and effectiveness then the financial stability needed for self-funded investment in the student and staff experience simply won't happen. That's why cynics of the efficiency and effectiveness agenda who dismiss it as either a management fad or underhand code for job cuts must be challenged.

You do not believe we're for real

Universities UK's most recent publication helps set the record straight showing how impressive the sector has been, following on from the Diamond review in turning a strategic imperative into real cash savings. Over the comprehensive spending review periods 2004 and 2007, English universities made £1.38bn in savings against a target of £1.23bn. In my own area of procurement, we are working to improve collaboration around non-pay spend.

But more needs to be done in communicating to staff, students and other external voices the benefits of why we are doing this alongside successful outcomes of the how. This is because the efficiency and effectiveness agenda has within it all the ingredients of disruptive change, from better use of space and shared services to workforce planning and benchmarking for performance.

At its heart is the creative desire to do things smarter across every facet of university activity. And why not? Surely that's what universities should be about, challenging the status quo, looking inside as well as outwards, and showing others ways to do things differently.

We are a sector well placed to make the required changes that, against a backdrop of austerity, send a positive and compelling signal to the world, one of strength and confidence. Efficiency and effectiveness must be for real if the UK sector is to maintain its world class status. Key to success is to hold tight to one principle: that the ultimate driver of success is the students at our institutions and the quality and value of their experience.

Nick Petford is the vice-chancellor of the University of Northampton – follow him on Twitter @nick_petford

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