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.