Merger of WIT and IT Carlow – risks and hard questions

  • SumoMe

In an opinion piece published in the Irish Times yesterday I responded to a report from Michael Kelly on the ‘Engagement and Consultation Process on a Technological University for the South-East‘. Today I’m going to expand on my earlier piece, and explore some of the other issues involved in setting up a Technological University in the South-East. I’m indebted to a number of people, from Waterford, Carlow, and further afield,  who contacted me about this over the last few days.

Higher education

Proposals to build a university in the South-East go back for over thirty years. The logic of doing this is hard to dispute. There’s good evidence that universities contribute to economic growth, in many different ways, and the potential benefits of setting up a university in the region have been well described in many sources, including the Kelly report . Waterford IT itself is a successful IT,  with good academic outcomes, and a very respectable track record in research and development. It’s the obvious keystone for a university in the region. IT Carlow is also a successful IT, but one with a radically different profile, and a strong focus on training.

One of the difficulties in talking about TU’s is the risk of running down the IT’s. To be clear, a successful education system has to provide access to a broad range of educational opportunities for everyone. This includes a working further education system, as well as higher education. Traditionally higher education in Ireland was divided into two groups, the Regional Technical Colleges, later the IT’s, who did apprenticeships, certificates, and diplomas, and the universities, who did degrees. For many years the IT’s awarded degrees only in partnership with universities, but more recently they have been allowed to award degrees themselves.

Irish parents have a strong preference for degrees. This has led to big increases in the number of kids doing degrees in the ITs and a fall in those doing certificates and diplomas. Arguably, this has weakened the whole system. It has certainly become harder to start with a certificate, and work up the system to a higher degree. It also leads to a moderately high dropout rate from first year degree course in the IT’s, as people who might, perhaps, have been better advised to start with a certificate, find they can’t manage a degree. I suspect that a fair of these would manage a degree later on, if they wanted one, but at age 18, many people do not have the maturity to manage a degree course.

The key point is that IT’s, technological universities, and ordinary universities are all doing something important, but they are also meant to be doing something different.

Mergers, risks, and management

Mergers are dangerous. Many mergers fail, and mergers can destroy large, and apparently successful organizations. Failed mergers destroy value, because they consume management and staff time, which could have done something more useful; and because the new body can be seriously, or even fatally, weakened by the merger process. It is perfectly possible to merge two good profitable companies and end up with one bad, loss-making, company. Of course, public sector bodies don’t usually exist to make a profit, although IT’s must balance their budgets, but the services they give can be badly damaged. The evidence is that, to succeed, a merger needs a clear, agreed, goal, and that both partners need to trust and respect each other. They also need to know each other very well (i.e. to have done a proper due diligence).

Red flags

Given the risks of a merger, reading Michael Kelly’s report should bring any properly designed civil servant out in a cold sweat. The process of merging WIT and IT Carlow has not gone smoothly, to say the least. WIT, an organisation that has had its own troubles over the last few years, walked away from merger talks in October 2014. At that point only the first stage of a four stage process leading to a technological university had been completed.

Someone in WIT pointed out to me that, at least until recently, the proposal for university status is not driven primarily by WIT, but by the city and local chamber of commerce. This person also felt that, for most staff members in WIT, the whole merger process was not very salient – ‘IT Carlow featured far too rarely in discussions of the future of the Institute’. I suspect that many staff in WIT feel the same way.

Kelly’s report, based on work with senior managers, the governing authorities, and others, includes many descriptions of how WIT and IT Carlow view each other. Phrases like “there is little evidence of previous formal collaboration”, “many instances of negative commentary, formal and informal, have been unhelpful and hurtful”, “need to build mutual trust and respect as the foundation of equality of esteem”, “doubts about the real level of commitment to TUSE” all occur. This is what has been published – what has not been published ought to frighten everyone.

This is not the basis for a viable long-term relationship, nor is it the basis for a successful merger over the next few years. WIT and ITC have also recently produced two separate visions for a technological university in the South East, which should also cause concern. Kelly shows that there are many common elements in the two visions, and I think he is right, but this is not a good place to start from.

One missing piece is mutual due diligence. Merger’s require transparency, and trust. They also require a lot of work to make sure that everyone on both sides knows where they stand. This is due diligence. Neither IT has completed this yet. In addition a key part of the TU process is preparing a detailed report on the performance of the two IT’s – this has yet to be completed for either. Again, this suggests that neither IT is yet ready to move to a merger. As Kelly observes, no IT will agree to a merger without some assurance that they will be able to form a TU. At the moment, WIT is much closer to meeting the TU criteria, than IT Carlow. The merged entity will be further from meeting the TU criteria than WIT is right now.

Managing risks

The risks of proceeding with the merge are not well described in the report. There is no more than a brief mention of the need for further resources, and a little further detail on the importance of achieving a common vision. It is proposed to finish in three years or less, which I believe to be unrealistic. The Dublin technological university process, which Kelly leads, and which has full support from all the ITs involved, has taken longer than this already.

I see further major risks, which need to be dealt with. Neither IT is ready. They dislike each other, and do not trust each other. Much work is needed to bring the two organisations on board, and it may not be possible to do so. It is regrettable this has happened, but it would be worse to pretend it has not, or that it does not matter

The price of moving ahead will be high. The direct costs of the merger will be, I think, a minimum of €4 million. There is also a big opportunity cost. Neither IT will have management time to develop themselves during the merger. They may not have the time, energy and resources to manage themselves properly.

There is a real risk of the merger dragging on for several years, with acrimony, suspicion and misery, and ultimately failing. This would do serious damage to the reputation of both ITs and the wider sector.

Conclusion

There are significant risks to proceeding. As far as I can see, these have not yet been properly considered, and no mitigation is proposed. If this is to go ahead, and to have any chance of success, I see no option but to start with a mediation process. This will mean further delay, but I feel it is necessary. Both partners are badly hurt, something which comes across very clearly in their responses to the report.

An alternative is to review the merger. It’s not obvious to me that the merger is either necessary, or helpful. There may be a case for a merger, but I think it needs to be reviewed and justified first.

Unless the work is done now to repair the hurt, to restore a sense of trust, and to establish real mutual esteem, any attempted merger will be a shotgun wedding, with results better imagined than experienced.

I am a member of the Higher Education Authority, but I write here in a personal capacity, and I do not speak on behalf of the HEA.

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