What the corporate world can learn from academia

In my last post, I wrote about what academia can learn from the business world. Today, I will discuss the other side of the coin.
First, the business world would do well to take a look at academic governance models, or, more specifically, shared governance models. Shared governance stands for the proposition that decisions in higher education should be made as democratically as possible. This is basically the opposite of a top-down hierarchical model. Shared governance can be cumbersome, so it is not appropriate in all instances, but decisions tend to be better and easier to implement when they are collectively made. This point may seem too obvious to state, but the desire to "call the shots" is simply irresistible to most chief executive officers(including CEOs of higher education institutions), though they may rationalize their edicts from on high in different terms.
Second, the business world would benefit from protecting employees' freedom of expression, in the tradition of academic freedom honored by colleges and universities. When employees are not afraid to say what they really think, the institution is better off. This is not to say that all speech should be protected. Sexual harassment and racist epithets are examples of speech which should be punished, but employees should not be inhibited about disagreeing with their supervisors.
Third, business should provide employees with that unique perquisite of the academic world: the sabbatical. Professors at many universities are provided with paid sabbaticals every seven years. This is, no doubt, a costly benefit, but it yields rewards in re-energized employees, higher morale, and, often, in new insights or innovations that result in new profit opportunities for the employer.

what academia can learn from the business world

Many of my friends in academia are wary of the corporate world, and resist all suggestions that sound too close to business practices. I can understand some of that wariness, but there are some good models in the corporate world worthy of emulation. Here are a few which I would borrow:
1. Merit pay: well-run companies know that you get what you pay for. If compensation is low, relative to your competitors, you get less-motivated employees. Though educators obviously do not go into their line of work intending to become wealthy, they also have mortgages to pay and kids to put through college. They are not impervious to pay or benefits. Do you want extraordinary performance from your employees? Then treat them extraordinarily(and that includes pay bonuses) when they excel. If you are satisfied with mediocre performance, then mediocre pay will ensure that you meet your goals. Some educators oppose merit pay because they worry that it will lead to caprice, but that, in my view, is a smaller risk than the risk of squelching excellence by not rewarding stellar achievement.
2. Performance measures: in the business world, the ultimate measure of performance is usually profit, and that is not a viable measure in the non-profit academic world. But the academic world can measure itself and its employees in objective terms. Those terms could include the number of students who succeed in meeting their academic or professional goals, for instance, divided by the number of instructors, or by total revenues. Such measures are imperfect at best, but they are not irrelevant to compare our performance from year to year, or to the performance of our competitors.
3. Entrepreneurship: the best companies foster creativity and risk-taking. They do not ridicule new ideas or punish all failures. Those are two excellent tools for squelching innovation. Colleges tend to favor tradition, which is a good thing, but one that is often carried too far.
Those are just a few of the practices and values which I think the academic world could more effectively embrace. In my next blog, I will discuss some of the academic practices which the corporate world should adopt.