AUSTRALIA: The need for moral wisdom

The dependence on full-fee international students by Australian universities has made a big difference. Competing for foreign students forced universities to become more student focused. But, to quote the old stage adage, you ain't seen nothing yet. Following the recommendations of the Bradley review, we are about to enter a whole new era in Australian higher education, an era in which competition will become more intense than ever. Let me explain why.

At present, every university receives a quota of places for domestic undergraduate students and some graduate students as well. Along with these quotas, every university gets a government block teaching grant and the fees that students pay through the Higher Education Contribution Scheme known as HECS.

An important fact about quotas is that they have nothing to do with student demand - they are simply historical. The number of domestic quota places that a university gets is determined by the number it received the previous year plus or minus a few. Under this system, students are often turned away from their preferred university - because it has run out of places.

Rejected students go to their second choice institution or third and so on until they find a place somewhere. This system is designed to protect unpopular courses and institutions. Every university - no matter how run-down its facilities, no matter how well or how badly it treats its students, no matter whether its graduates find jobs or not.

They will all wind up with students because some students will have no other choice. The quota system guarantees that every institution winds up with students. This gives universities little incentive to improve. Why should they bother to improve when they know that they will wind up with students anyway?

Beginning next year, the system is going to change - and change radically. Universities will be permitted to exceed their domestic student quotas by 10% and still receive Commonwealth and HECS funding. And then, in 2012, quotas will be abolished altogether.

Following the recommendations of the Bradley review, universities will be free to enrol as many, or as few, students as they wish in whatever courses they decide to offer. And, to compound the shock, universities will no longer receive government block grants for teaching. Instead, each student they enrol will bring a certain amount of money to the university.

In the words of the Bradley review, government money will follow the student. The more students a university enrols, the more money it receives; the fewer students it enrols, the less money it receives. The idea that each student would carry a certain amount of funding with him or her used to be known as a voucher system.

That is, students would each have vouchers worth a certain sum. The government says that the system it proposes is not a voucher system. In the government's scheme, each student will bring a specific sum to the university but there will be no actual piece of paper called a voucher. Instead, the government will simply transfer the money directly to the university.

See the difference? No? Well, that's because there isn't one. The real problem is that vouchers are a neo-liberal idea and everyone knows how our Prime Minister feels about neo-liberals.

Clearly, a Labor government could not possibly be implementing a neo-liberal idea.

Here I feel I must make a confession. I think I am the neo-liberal that the PM is not happy with, as I have agitated in favour of vouchers for years. I also think I have the solution to the government's naming problem.

Some of you may be old enough to remember the singer Prince who changed his name to an unpronounceable symbol. Disc jockeys took to calling him 'the artist formerly known as Prince'.

So, my suggestion is that we henceforth call the new funding system, 'the system formerly known as vouchers'.

Whatever we call it, there is no doubt that the new system will usher in an era of intense competition for resources. This is indeed an epoch-making reform. All universities will have to compete hard for students and the resources they bring.

Some well-known universities have already indicated that they intend to use the removal of quotas and the new funding system as an opportunity to expand. If they open their doors to more students, their expansion may come at the expense of less popular universities.

If less popular universities cannot compete, some may have to downsize, a few may even have to close their doors. In anticipating how to deal with the new competitive realities, universities are considering how to position themselves. They are implementing more efficient management processes, introducing new courses, thinking about changing teaching times and venues and upgrading student amenities.

These are all good things, especially for students, but none will ensure success. Universities are places of people and ultimately an institution's success depends on you - the people who work there.

To ensure that you can contribute, we need to give you the power you need. What do I mean by empowering staff? Let me tell you first what empowering is not. General Motors, once the world's biggest company, and now bankrupt, had a handbook of work rules that was 5,000 pages long. Empowerment is the opposite of that. It is impossible to have a rule for everything.

Real world problems are rarely cut and dry. More often they are ambiguous and ill defined.

I am sure you find that all the time in your work. Something crops up that does not fit the rules, and no one has told you what you are supposed to do. The answer is not in your job description so you consult a colleague ... and you find she's not sure either. It's up to you to decide what to do.

An empowered person knows how and when to improvise. An empowered person knows how and when to make an exception to the rules. A psychologist called Barry Schwartz says that improvising and making exceptions requires "practical wisdom". He illustrates this idea with an example.

It involves a group of hospital janitors whose job descriptions list their duties as mopping floors, cleaning up, dumping the rubbish and the like. Sounds reasonable, these are the tasks janitors are employed to do. Notice, however, that not once is human interaction mentioned in their job descriptions. Their job descriptions could just as easily have been written for robots.

Yet the janitors have constant contact with the sick and the dying and their visiting relatives. To do their jobs well, the janitors had to go beyond their job descriptions. For example, their job description requires that they vacuum the waiting room carpet every afternoon.

However, on one afternoon, a janitor noticed that a husband who had been waiting anxiously for many hours for news of his sick wife had fallen asleep in the waiting room. Rather than turn on the vacuum and wake the husband, the janitor decided to skip this part of his routine and come back later.

This was a display of practical wisdom; it was a combination of what the ancient philosopher, Aristotle, called moral will (wanting to do the right thing) and moral skill (knowing how and when to do it).

Here's another example. A janitor stopped mopping the floor of a hospital corridor because a patient was out of his bed, getting a little exercise, trying to build up his strength, walking slowly down the hall.

These may seem like little things but it is just this type of kindness, care and empathy that makes people feel better and helps hospitals to achieve their aims. So, it seems that janitors are not robots. They are not just skilled at cleaning up. They also have moral skill, which is the ability to figure out what's called for in a given situation.

It's similar to what some people call emotional intelligence - the ability to read people and understand their needs. The janitors not only have moral skill, they also have moral will, which is the desire to do the right thing.

You can have great emotional intelligence but not have the will to do the right thing. Take Bernie Madoff, the New York financier who pulled off the biggest swindle in history. He used his emotional intelligence to manipulate and dupe people. The janitors clearly had both traits - the moral will to do right by other people, and beyond this, the moral skill to figure out what "doing right" means.

In contrast, let me tell you about a recent example of almost total lack of moral skill and moral will. You probably read about it, or saw it on the nightly news. It happened here in Sydney, when a teenage boy on a hike became lost in remote bushland.

Exhausted and dehydrated, he was still able to ring the emergency service from his mobile phone. He pleaded with them to help him, to send someone to rescue him. But the work rules of the emergency operators specified a particular requirement that must be fulfilled before they could dispatch assistance.

The caller had to give them the name of the nearest cross street. The boy was in the bush, out in the Blue Mountains, and off the beaten track. There were no cross-streets; in fact, there were no streets of any kind. So, what was the response he received? Sorry, we cannot help you. No help was sent. And you know what happened, the boy died.

I am not laying blame with the operators, the boy may have died anyway, but no help was sent. Moral will and moral skill don't have much to do with how educated you are. Janitors can have both while highly educated people can have neither.

Consider, for example, the scandal surrounding the expenses of British parliamentarians.

A lot has been written about their taxpayer funded pornography, phantom mortgages and second homes. My all time favourite was the guy who billed the taxpayer for the cost of cleaning the moat that surrounded his castle. At least he had a strategy for defending himself when the angry taxpayers came around to exact their revenge: he could just raise the drawbridge and watch them fall into his newly cleaned moat.

Curiously, no one seems to have noticed that the expenses scandal that has convulsed and degraded Britain's parliamentary democracy involves highly educated people. Most of the MPs involved are university graduates. A good number attended the grand old colleges of Oxbridge.

Unlike most janitors, the British MPs can readily quote Shakespeare and they have travelled the world, yet their moral will and moral skill seems much less developed than the janitors'.

Similarly, many of the financiers who helped to precipitate the Global Financial Crisis with their shabby financial schemes attended some of the world's most prestigious business schools and colleges. They had the practical skills needed to do their jobs, but they lacked wisdom. They were deficient in moral will and moral skill.

So what does all this mean for us who work in universities? Let me begin to explain by just painting in some context. You don't need me to tell you that higher education has changed enormously in the past few decades. It has moved from something peripheral to society, a haven for the elites, to a mass provider central to the economic health of society.

As a consequence, our universities have become increasingly complex organisations. Universities would not be able to function without highly skilled financial experts, facilities managers, IT specialists, fundraisers, and human resources professionals, to name just a few areas. In short, universities would not be able to function without you.

In case you think I am just shamelessly trying to flatter you, I want you to know that your importance has been officially recognised in the UK. This year, the Times Higher Education newspaper launched its inaugural Leadership and Management Awards in a night of - and I quote - "glitz and glamour" at the Hilton Hotel in Park Lane in London. Professional university staff were acknowledged and rewarded for their great work.

And why shouldn't they be? In many cases they deal with multi-million dollar budgets and extremely costly projects that include the development of new buildings and technical infrastructure. And they help students navigate their way through the bureaucracy.

Your work cannot be conducted by worthy amateurs. ATEM places great emphasis on professional development, on the need for lifelong learning of its members, and about the importance of keeping up to date on the latest developments in the science and art of management.

All of this is essential but it is not enough. Similarly, many of the financiers who helped to precipitate the Global Financial Crisis with their shabby financial schemes attended some of the world's most prestigious business schools and colleges. They had the practical skills needed to do their jobs, but they lacked wisdom. They were deficient in moral will and moral skill.

So what does all this mean for us who work in universities? Let me begin to explain by just painting in some context. You don't need me to tell you that higher education has changed enormously in the past few decades. It has moved from something peripheral to society, a haven for the elites, to a mass provider central to the economic health of society.

I believe that moral will and moral skill are just as important as technical skills. As the great Victorian-era author and artist John Ruskin said, "The highest reward for people's toil is not what they get for it, but what they become by it". For Ruskin what people do is not nearly as important as what people are.

We need your wisdom. But it's not a one-way street. Universities not only have a duty to provide staff with opportunities for skill development. They bear the same duty to help deepen our understanding of moral behaviour.

At Macquarie we have established a set of principles for managers, which form part of all new employment contracts. These are taken from the Nolan report into standards in public life. They include:

- Selflessness: Management decisions should be made solely in terms of the University's interest.
- Integrity: Managers should be free from financial or other obligations to outside individuals or organisations that might influence them.
- Objectivity: In carrying out business, managers should make choices on merit.
- Accountability: Managers must be accountable for their decisions and actions.
- Openness: Managers should be as open as possible about all the decisions they take.
- Honesty: Managers have a duty to resolve any conflicts of interest in a way that protects the university's interest.

Taken together, these principles constitute a sort of Hippocratic Oath for the managers of public organisations. Moral will and moral skill are not just for our selves and our colleagues. They are also for the benefit of our students.

Today, we educate our students but we do not make them wise. Being wise requires moral skill and moral will. Being wise means knowing when to improvise; knowing when to bend the rules and when to ignore them altogether.

But a wise person is made, not born. To help our students and to succeed in the intense competition to come we must re-moralise our universities. How can I speak of moralising?

After all, universities are not churches. We are not in the business of saving souls. But that does not mean we cannot help our students to develop moral skill and moral will.

Students learn ethics by being part of a moral community. We cannot build character unless we can ensure that universities provide good role models for our students. We cannot build character unless we who work in universities - each individual, each organisation - are committed to high ethical and moral standards.

We have to walk the talk. And that applies to all of us, whatever our job. Everyone one of us in education does moral work and moral work requires moral wisdom. In his speech, Barry Schwartz quotes President Barack Obama's inaugural address. In that speech, President Obama appealed to the American people to show two things: one was hope and the other was virtue.

What a wonderful old-fashioned word to choose... virtue. President Obama actually asked his countrymen to be good people. My take-home point is this: It is not enough to simply ask people to be good. We need to make it possible for them to be good.

We need to treat professional staff as thinking and moral human beings who are capable of understanding what people need and how to provide it. We need to reward people who use their moral will and moral skill, make heroes of them and tell their stories to anyone who will listen. Most of all we need to empower our staff to use their wisdom for the benefit of their universities and their students.

To survive in the competition to come universities will need to confront and negotiate many challenges - not least how new technologies are changing the way young people think and learn. To do that successfully, our professional and academic staff will need to deploy all their talents and skills.

But it will be their moral wisdom that will ultimately determine which universities will flourish in years ahead and which deserve to flourish.

* Steven Schwartz is Vice-chancellor of Macquarie University in Sydney. This is an edited version of a speech he gave earlier this month at a regional conference of the Association of Tertiary Education Managers.