University Business October 2017 - 10

OnTopic

Q&A with William Massy
By Tim Goral

Rethinking the
business of education
How a data-driven model can help universities improve
learning assessment and costs

As an expert microeconomist,
William Massy approaches the challenge of reform by applying rigorous
economic principles-informed by
financial data and other evidence-
to explain the forces at work on
universities and the flaws in the
academic business model.
In his book Reengineering the
University: How to Be Mission
Centered, Market Smart, and
Margin Conscious (Johns Hopkins
University Press, 2016), Massy
shows how administrators and
faculty can improve education,
research and affordability by keeping an eye on academic values and
the bottom line.
The problem is poorly understood metrics and-sometimes-
administrators and faculty who
are too often unwilling or unable
to change. "Understanding these
problems and the business model
itself poses the problem faced by
the blind man and the elephant,"
Massy says. "Each person understands a piece but no one has a
firm grasp on the whole."

10 | October 2017

Your book addresses what you call a
number of "flaws" in the system that
are very much interconnected. You
can't really address one without addressing the next. It's almost like a
house of cards.
Yeah. Remember the old game of pickup sticks? You try to move the stick and
the whole thing may come crashing
down. Until you begin to get a really
good view of the "teaching production
function," as economists call it, you
really don't have a basis for unraveling
this thing.
The dilemma, of course, is that only
the faculty can fix what needs fixing.
But faculty often don't have enough
motivation, data or basic information
to really grasp the issues that have to
be grappled with. I believe you can get
faculty involvement and begin to make
some progress by giving them that
teaching production function information that includes course-based cost and
revenue, activity-based costing, analytics and so on.
The central administration can build
a model that describes the teaching
production function to help get faculty
on board. They don't need to have the
permission of the faculty-it isn't the
kind of thing that requires a vote of the
faculty senate to do. All the information
you need is already available in the uni-

UBmag.me/think

versity's data system, the general ledger,
the timetable that exists at student registration, HR, facilities and so on.
You can build this model and begin
to work with one or two departments,
showing them their actual data in the
context of this. As you do that, you'll
see the dean and the department chairs
get very interested. They say, "I had no
idea. I've got problems to deal with and
this helps me deal with them." You can
begin to get the faculty engaged in a
process of change.
Despite the importance of learning in
the academic business model, you say
that after two decades we're still not
really sure what we're looking for.
I spent about 10 years in quality measurement before I got into costing and
reengineering. I've visited probably 20
campuses and talked with them about
quality and quality measures, and quality improvement in teaching. I am very
clear in the book that I don't think that
we're even on the threshold of broadgauge normed tests that would be detailed enough to be useful for decisionmaking within universities.
However, I have rarely been in a
department where the faculty members-if they were motivated and
maybe pressed a bit-could not figure
out how to do a lot better than they are
now in terms of measuring learning. If
there is a reason to determine how well
the teaching is going, faculty can find
a way. Anybody who has taught knows
that you really do desperately want to
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