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TAFE Making choices

3 September 2009

Gerhard Vorster

Deloitte

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Agenda

Where do we start from?

VET overview

How to manage value

Choices

Applying choices

Get on with it      

Where do we start from?

http://www.youtube.com/watch?v=rAaWvVFERVA

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VET overview The Spotlight has been on the tertiary education sector

Australian VET an international leader in establishing industry-wide training standards and qualifications

Bradley Review a vision for a broader, more dynamic and integrated tertiary education sector, under Commonwealth jurisdiction

Economic constraints and the funding gap

Roadmap towards a national TAFE system is uncertain

In this environment, standing still is not an option

While there is no ‘one size fits all’ formula for success, there are common issues and opportunities in operation across the sector

The strategic debate requires much wider consideration.

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The Bradley review signals a towards a more competitive and dynamic tertiary education sector, increasingly exposed to market and economic forces…

Market diversification

• Rise in self-employed and micro-business sector

• Lifelong, work integrated learning

• Baby boomer re-training

• Asia-Pacific industrialisation

Australian TAFE

Increased competition

• Diversification of student market

• De-regulation of student funding

• Private and international providers

• Economies of scale & specialisation

Revenue trends

• Funding volatility and uncertainty

• Long term under-investment

• Constrained govt spending

• Improved short term domestic demand

Policy directions

• Tension between government regulation and market freedom

• Bradley response – Commonwealth jurisdiction? Unified tertiary model?

• Diversification and differentiation

• Increased participation through enhanced pathways

Technology & information

• Web 2.0 challenge; user generated content, open networks

• E-learning development

• Rising competitive importance of ICT

• Increasing information management / reporting requirements

Organisational efficiency

• Rise of administrative & capital costs

• Support capabilities

• Change readiness / business agility

• Professional staff skills

Workforce change

• Aging workforce and war for talent

• Skill demands

• Increasing student-staff ratio

Engagement & impact

• Basic training vs workplace innovation roles

• Collaboration imperative with private sector, Universities and communities

• Promoting access & regional delivery

Academic programs; funding levels; revenue diversification

VET Value

Funding & Revenue Growth

Operating Margin Asset Efficiency Performance & Capabilities

Marketing, general & administrative costs; cost of program delivery; tax

Human capital; intellectual property & assets; property, plant & equipment; receivables & payables

Institutional strengths; external impact; quality outcomes

Program focus and alignment

Student experience

Program portfolio

Innovation & commercialisation

Diversified delivery

Shared services & operational excellence

Outsourcing

Procurement

Talent management

Information management and data analytics

Campus and asset models & management

Governance

Planning, budgeting & forecasting

Program & project mgmt

Change management & agility

Strategic partnerships

Val

ue

Dri

vers

Val

ue

Imp

rove

men

t

L

ever

s an

d A

ctio

n It

ems

How to manage value

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Choices

Funding

Quality

Access ability

Capability

Operating model

Strategic choices

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So will it be done by you or to you?

Outsourcing the responsibility for own future is a strategic choice

If the decision is not to do so, the dynamics of strategy have changed quite significantly

Plan Organise Control

Anticipate

Operate Accumulate

Formulate

To

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Strategy

External choices(Where to compete)

Internal choices (Resource allocation)

What are these strategic choices?

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StrategyChoices

External

Internal

Granular Market & Portfolio Selection

Policy Priorities & Market Opportunities

Granularperformance management

Innovation System

Scale-upcapability

Institutes will need to enhance their capability to making the right strategic choices about where to compete and how to ensure alignment and performance against the strategy

Today Tomorrow Future

TAFE Value Pipeline

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StrategyChoices

External

Internal

Institutes will need to enhance their capability to making the right strategic choices about where to compete and how to ensure alignment and performance against the strategy

Granular Market& Portfolio Selection

Policy Priorities & Market

Opportunities

Granularperformance management

Innovation System

Scale-upcapability

Consolidation

Exit & Divestment

Fill-inExploratory

Options

Today Tomorrow Future

TAFE Value Pipeline

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VET sector impact and capability diagnostic

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VET sector impact and capability diagnostic

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VET sector impact and capability diagnostic

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VET sector impact and capability diagnostic

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Get on with it …

It is granular in nature

It is based on sober optimism

It understands the “profitable core” concept

It logically translates into tactics

It is done with a huge sense of urgency

Strategy in volatile times is about superior tactics,superior implementation

and superior people

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…but these choices have to be made and implemented by people

Personal responsibility

Deny, defend, justify,alibi, blame, rationalise

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Fundamental capabilities of strategy in volatile times

Teamwork and partnerships – collective action within and across the value chain

Active anticipation

Innovation in processes, products and services and business models

A combination of organic and non-organic options

Explore and exploit simultaneously

“Mistakes are feedback from the gods” - do, learn, do.

Management has to be the organisationalshock absorber during the bumpy ride.

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….and with the knowledge that Black Swans will be the norm

Preparednessover

prediction

“How you cling to your purity, young man! How afraid are you to soil your hands! All right, stay pure! What good will it do? Why did you join us? Purity it an idea for a yogi or a monk…To do nothing, to remain motionless, arms at your side, wearing kid gloves. Well, I have dirty hands. Right up to the elbows. I’ve plunged them in filth and blood. But what do you hope? Do you think you can govern innocently?”

– Jean Paul Sartre

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