Dr Andrew Cubie CBE

Chair-elect, CUC

The Monitoring of Institutional Performance and KPIs

30 November 2006

Steering groupAndrew Cubie (chair)Sir Andrew BurnsProf Sir Ivor Crewe (for UUK)David FletcherEddie Newcomb (project manager)Ewart Wooldridge (Leadership Foundation)

Tom Ingram (ex CEO of AGB in USA)Sally Neocosmos (for AHUA)

Dick Coldwell (HEFCE Board member)Greg Wade (UUK)

Jim Port (J M Consulting)

THE KPIs PROJECT

The Governance Code of Practice includes the proposition that each Institution should adopt a Statement of Primary Responsibilities which directs the Governing Body:-

1. To approve the mission and strategic vision of the institution, long term academic and business plans and KPIs, and to ensure these meet the interests of stakeholders.

THE KPIs PROJECT

2. To ensure processes are in place to monitor and evaluate the performance and effectiveness of the Institution, against the plans and approved KPIs, which should be, where possible and appropriate, benchmarked against

other comparable institutions.

The KPIs ProjectCUC survey in 2006 – some governing bodies using KPIs, many would like guidance

Steering group, HEFCE funding obtained and J M Consulting commissioned

Remit to develop and issue guidance that will help Governing Bodies to fulfil this responsibility– Not prescriptive– A menu of KPIs– Based on international comparison

Approach in the Guide1. Governors have responsibility at a strategic level for all activities

2. They cannot and should not – Monitor large volumes of paper– Engage in operational detail– Usurp the role of senior management

3. Governors need high-level KPIs that cover all strategic areas;may not come from existing operational systems or data; andcan be assimilated and reviewed with minimal volumes of paper.

4. They also need a monitoring framework that permits them to:– Quickly gain an overview of performance – Interrogate and drill down where appropriate– Highlight areas that need more attention

The Monitoring Framework1. 10 high-level KPIs cover all areas of institutional performance

2. Each is represented by a traffic-light assessment and this is shown on one page

3. Each of the ten is built up using a range of supporting assessment materials: – Self-assessment questions– Supporting KPIs– Other sources as appropriate

4. Governors only need to see one page, but can have back-up schedules covering some or all of the ten areas as appropriate

5. They also need a monitoring framework that permits them to:– Quickly gain an overview of performance – Interrogate and drill down where appropriate– Highlight areas that need more attention

The High Level KPIsTop-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

The Monitoring of Institutional Performance and KPIs

The CUC Guide30 November 2006

Jim Port

JM Consulting

Philosophy and approach

1. Each governing body has to decide its own arrangements

2. Governors work in partnership with the Vice-Chancellor and senior management

3. The guide illustrates good practice, but each institution may choose different methods, provided they achieve the aims in the Code

Contents of the guide1. Summary

describes the logic of the process and the suggestedmonitoring framework at a high level

2. Review of practice in the sector and elsewhereBalanced scorecard, EFQM, Dashboards etcResults of CUC survey of use of KPIsPIs in use in higher education

3. The supporting materials for each high level KPIContextSelf-assessment questionsSupporting KPIs and other sources of information

4. (Appendix) Full list of supporting KPIs with definitions etc

Challenges for the project1. Governors often face too much paper and too many pressing matters

at meetings

So, operational detail can take over and inhibit consideration of the critical strategic issues

2. Some of the most critical issues are qualitative and difficult to measure, but there are lots of data and KPIs in other areas (estates, finance etc)

So, the attention given to different areas becomes unbalanced

3. The management team are usually very competent and close to the details

– how can governors add value? – what questions should they ask?– how will they know if there is a problem?

4. What can the guide do to help?

What can the guide do to help?NOT prescribe a standard set of KPIs, for all HEIs Instead, the guide answers 4 questions:

1. What do governors need to monitor?(the ten high-level KPIs – or similar designed for each institution)

2. What are the key issues in each high-level KPI?(the self-assessment questions)

3. How can progress/status be assessed for each KPI?(through the supporting KPIs, and answers to the questions)

4. How can this be presented to governors?(on one page, using the traffic-light system)

HEIs can choose different answers – but they do need to address the questions

What do governors need to monitor? The high level KPIs

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

What are the issues in each KPI?Self assessment questions

(e.g High-level KPI 1: Sustainability)1.1 Does the mission and academic positioning of the institution make sense

as a business and academic proposition?1.2 Are we performing as well as we should in the main academic and student-

related activities which are important to our mission and our markets? 1.3 Are we generating enough cash to allow strategic investments and to

manage risk and uncertainty?1.4 Is our infrastructure fit for purpose and generating a realistic return on

past investment?………

5.4 Which are our ten most important relationships in our region and what are we doing to develop and maintain them? ( High-level KPI 5: Knowledge transfer and relationships)

8.2 Are we satisfied with the quality of appointments made to senior positions and the way these posts are managed and appraised? (High-level KPI 8: Staff and HRD)

How can progress be measured?The supporting or lower-level KPIs

e.g. for High-level KPI 1: Sustainability

1. Return on assets (CE/CP ratio) 2. Annual spend on infrastructure compared to agreed annual requirement3. Income growth, diversity and security4. Student demand, achievement and satisfaction

…….

10. Evidence of academic distinctiveness (supports academic profile)22. Staff scholarly activity (supports student experience)39. Cash generated (supports financial health)60. Remuneration committee reports (support leadership etc)

Note these are all illustrative – full definitions and suggestedways to use these are provided in the guide

How can this be presented?The traffic light definitions

Green Good: this is on track, low risk

Amber-Green Satisfactory: this is broadly on track with some concerns which need to be addressed

Amber Mixed: some significant concerns which could be damaging if not addressed, medium risk

Red Problematic: serious concerns threaten this area, high risk to the institution’s overall performance

The one-page summary

A. “Super-KPI” indicators of medium-term institutional performance

Reference

*

1. Institutional Sustainability

AR

2. Academic profile and positioning

G

B. Top level KPIs – strategic indicators of institutional health

3. The student experience AG

4. Research AR

5. Knowledge Transfer and relationships G

6. Financial health AG

7. Estates and Infrastructure AR

8. Staff & HRD AR

9. Governance, Leadership and Management

G

10. Institutional projects * reference to relevant back-up schedules attached or available on request

Implementation by universities• Each governing body is free to decide how best to monitor

institutional performance – but any institution not wishing to use this approach would need to find and implement an alternative

• The guide illustrates good practice, but is not prescriptive or mandatory

• Some members responding to the CUC survey are already using broadly equivalent processes, many are not

• So what should governing bodies do next?

What to do next?a. Answer the four questions on slide 5

– What to monitor?– What are the issues in each area?– How to assess progress/status?– How to present it to governors?

b. Each governing body should consider:– A timetable and process for monitoring- and resulting

action– How the assessment capability can be provided– How this can fit with existing processes in the institution