Managing International Partnerships

Managing International Partnerships Tim Fowler, Pro Vice-Chancellor International, University of Southern Queensland ANZAM Presentation 13 June 2007

The menu • The key success factor • My take • My learning to date from running international education business partnerships • The USQ case study • Who is USQ? • What international partnerships do we have? • Bit of history • Why have international partnerships? • Successfully managing partnerships

the key success factor? • when managing international business partnerships within universities the key determinant of success is the level of sophistication with which the organisation approaches its own internal business management. • Building blocks of success.

My take • When considering new international business partnerships many Aust and NZ universities are generally: • ill-prepared • Lack internal buy-in or understanding • overly optimistic about their own abilities to deliver • have done little work into realistically modelling likely outcomes – financial or otherwise. • They are lured by the revenue, not the margin.

My learnings to date therefore are: • Strategy is important but is a waste of time without the building blocks of: • the right people on the bus • the right structures • the incentives to participate – financial model and academic model in this case • B grade strategy with an A grade implementation is just fine

2. Engagement models • You must have clarity of engagement models – useful both internally and externally with the offshore partner. • the partnership engagement model • the academic model/financial model • business relationship management model.

3. Governance is crucial • Issue of balance: • Without it you have disasters; with overly zealous governance you have no business. • Hitting a safe and yet productive mix is a learning experience.

4. Internal marketing and teams • By far the least valued part of the process yet possibly the most important in the implementation phase of any new offshore partnership.

Why do universities have international partnerships? • Internationalisation – global connectedness • Graduate attributes – global citizens • Research linkages • But really the Context is financial Australian and New Zealand universities are reliant on international revenue and this heavily influences their management decisions

For example • 1998-2004 81% of Australian universities posted annual operating surpluses. Take out UNE, Newcastle and La Trobe it is close to 90%. • Take out international revenue from their operations 70% of them would have posted an operating deficit every year. • CQU in 2004 = operating surplus of $23 million, stripping out international revenue = operating deficit of $73 million. • Monash University – 2001 operating surplus $20.5 million, without international would be nearly a $70 million loss. Monash would have made a loss for 9 straight years without international revenue. • Dependence on international revenue is blind to status. 6 of the Go8 universities are in this category.

The point is • It is within this operating environment where decisions on entering new international partnerships and how to manage or exit existing partnerships are made.

USQ – who are we? • 25,000 students, 75% of whom study by distance • Mature age, school leavers, first gen. • 8000 international students • 6000 offshore in 102 countries, rest onshore at 4 sites • 25+ international education partners • nearly 150 recruitment agents, 1200 staff • Internationally recognised as world class distance education provider

Types of International Partnerships at USQ • Formal MOU’s for research, staff and student exchange, joint academic projects. • Agreements with agencies recruiting international on-campus students. Very common USQ has 150. • Education partner agreements.

History Lesson • 80s-90s - domestic distance delivery infrastructure underpins partnerships in Malaysia. • 2001-2004 rapid expansion of relationships – 60+ different relationships in 15+ countries. • Revenue and numbers of enrolments were main consideration. C$28million rev, 7000 offshore students • 2004 much publicised Dubai debacle where a USQ campus was established without knowledge of the University Council. • 06-08 – clean out and rebuild.

Current International Business Partnerships • 25+ partners mainly in China, Sri Lanka, Malaysia and Singapore. • 70% are business degrees – BCom, MBA etc, but spread across all faculties • B2B relationship but students are all enrolled with USQ. • Wholesale fees - partner determines local retail. • Varied academic models – mostly value added distance.

The problems in 2005 • No explicit strategy • No governance arrangements • Several different academic and business models – created confusion and inefficiencies. • No relationship management of partners. • Few professional staff with an understanding of international business • Little integrated use of metrics to ascertain performance

The problems continued • Several partnerships were operating outside the legal framework in the host country and were net loss contributors. • Poor academic results/outcomes – progression and retention rates. • No coordinated USQ management interface with the partners. Partners saw USQ as a unresponsive and difficult to deal with. • USQ poor administrative processes and systems to service partners. • USQ staff discontent with partnerships and partners. Perceived as a business operating outside the university’s interests. Suspicion of all things international.

The solutions - immediate • Legal opinion sought on several partnerships. • Some required immediate closure. • Immediate fixes required on some partnerships – review, close, renegotiate or close.

Solutions – structural • USQ has a competitive advantage but needed heavily remoulding how it approached offshore partnerships. • We therefore took the view that we needed to get our house in order BEFORE we looked at strategy. • External review of all structures/people and processes. • Lead to total restructure of USQ International – operations arm for all university’s international activities. Turnaround times, get a reputation for delivering and being responsive. • Needed right people on the bus. 75%+ change in staff – brought in several from private sectors including banking and food export sector – good mix with University trained staff. These people are the forefront of the new business.

Governance • Established International Advisory Committee (IAC) to oversee and provide advice to the Vice Chancellor on international issues. Strategy not operations • Faculty based international coordinators and committees to review academic performance. • USQ International oversees the relationship management, business operations and contract management with partners • Both groups share same information – financials, academic audits etc • = Church and state separation – healthy and robust debate. Pendulum swing post Dubai.

Engagement Models • Next key problem was how to engage partners and staff in a conversation about how we wanted to run the future relationship. • Needed to encapsulate all our obligations – academic, student experience, regulatory and financial. • Existing partners - discussion item on how we wanted to have a “real” partnership going forward. In essence it said we wanted to better understand their business. Good response. • Potential partners = forms part of a “how we do business” approach to initial conversations and sets expectations for close examination of their business. • Internally - useful tool to get staff involved and understand the complexity beyond their own piece of the puzzle.

Partnership Keystones Define our mandatory outcomes and determine the boundaries in which the partnership works The Regulatory Framework Defines the minimum standards to which the Partnership must adhere (QA) ACADEMIC INTEGRITY HOW WE WORK TOGETHER AS PARTNERS Australian Regulations Host Country Regulations FINANCIAL SUSTAIN- ABILITY POSITIVE STUDENT OUTCOMES International Market Environment Global Market Drivers All the factors which determine what the market is today and define what it is likely to be in the future International Education Partnership Model The USQ Brand Positions USQ to make a real connection with students and make a claim for category ownership which is internationally relevant Living the USQ Brand Delivery of the “Brand Promise” requires that all of USQ and our partners to live the brand in everything we do Fulfilling Lives - USQ is a Challenging Supportive Family of Staff and Students.

For instance • Part of the engagement model is a partnership pact – it agrees principles of how we want to work together: • Trust in each other • Acknowledge the importance of economics • Clear system wide performance standards • Partners are part of the USQ family • Build a “one system” mentality • Resolve problems constructively. • Breaks down mentality that the international partner is some sort of alien.

Engagement Models continued • Academic model – seeking to reduce this to 1 to 2 models and is moving down an “audit” theme. Must be: • Scaleable • Portable • Reputation enhancing • Financial model – driven out of the academic model. Must be financially sustainable for both partners. Still fee for service = wholesale pricing.

Internal Marketing and teams • Even where good governance, good strategy, right structures and right people, critical weakness is often the internal buy in of staff – academic and general - to the relationship or their part in it. • Has real impact on the management of the relationship with your overseas partner. • It all counts. Staff who are uninformed of a particular change or who have not considered the impact of a new international partnership on their course potentially damage the business. • Cross unit teams are a good way to breakdown this problem. Avoid functional unit capture. “Exit team”

In summary our experience has been • International education business partnerships are great business if done well and a minefield if not. • To avoid the traps and build productive offshore relationships – “management” is actually about managing your own business basics right: • People • Structures • Systems and processes • Engagement models - • Governance • Internal marketing

Thank you • I am always keen to talk story on business management issues and things international. • fowler@usq.edu.au • 07-4631-2312

Managing International Partnerships