Corvinus University of Budapest was the first university in Hungary to switch its model. The institution, which has been funded by a foundation since July 2019, is going through a major transformation under the presidency of Anthony Radev, a businessman who led McKinsey & Company for two decades and is also the founder of the SEED management training workshop. Portfolio asked the President about the experiences of the transformation of the institution and the criticisms of the model change. We also talked about how much the creation and maintenance of quality education depended on funding and how the budget of the institution evolved in the new structure.
In recent decades, you took part in the transformation of a number of companies, e.g., Mol and OTP. To what extent was it different to conduct the model change of the Corvinus University of Budapest?
There are big differences between business life and academic life. One needs to work at a totally different pace, with a different approach and different methods. When a company decides to be transformed, it is because there is an urgent need to make a move to improve competitiveness.
Hungarian universities and colleges also find that they lag behind the Western world, foreign universities absorb 15-20 per cent of the best Hungarian students.
Corvinus has been the best university in Hungary in terms of economics education so far, but there is still room for improvement, so there was a need for a model change. The foundation model provides more flexible operation, a more relaxed regulatory environment related to the private university status, at the same time and it also has the potential for long-term and predictable planning. Change is always difficult, whether it is in business life or academic life, there will always be those who feel like losers.
As you said, the transformation was not well received by everyone. For example in recent days some people criticised the model change, saying they could not see its benefits.
Everyone has the right to freely express their opinion, but facts are facts. A lot of things changed in the past one-and-a-half years, we have made fairly good progress.
Corvinus has created a performance and remuneration system for its employees and tutors that encourages change. The primarily objective is to ensure an appropriate framework system and support for the continuous development of the colleagues working in the academic field and the background. We expect each colleague to train themselves continuously, to participate in the work of their direct teams and to contribute consciously to the continuous strengthening of the domestic and international reputation of the university. We were the first in Hungary to introduce the academic career model, the primary goal of which is to allow everyone to focus on the area where they can provide the best performance: education or research.
We have simplified our fragmented wage structure, which contained many elements that changing every year: the total available annual income consists of two main components, a differentiated base wage and a performance-based bonus. Parallel with the new wage structure, in January 2020, Corvinus employees received a differentiated, on average 25% increase in total wages.
What is the most important: we started the renewal of our degree programmes and the introduction of new degree programmes on a scheduled basis, we have allocated a large amount of resources for the development of infrastructure, digital services, and we developed an effective, responsive management system jointly with the colleagues.
More and more Hungarian universities were or will soon be moved to being funded by foundations. What would you advise to these institutions, how to start the transformation?
The first step is to define the objectives, which is not easy. If you ask 50 people what they should improve on, what goals should be set, there is a good chance that you will get 50 different answers.
Once the narrative has become clear and you know what lags, disadvantages you need to work on, and what you want to achieve, you need to choose the right management team. You have to let people into this circle who not only fully accept and support the set objectives but are really able to implement them. After that, a strategy must be compiled, an institution development plan, as it is called at universities. These are the first three steps which are indispensable at any university.
The first three steps on Corvinus took quite a lot of time, at first there was absolutely no agreement on what was important, what was less so, and what we needed to work on. We tried to involve everyone in the dialogue, which is clear from the fact that no really serious tensions evolved.
It seemed at Corvinus University that the market absorbing its graduates and a large number of those wishing to study here benefit from the transformation, while the same is not so clear at other universities. To what extent is it possible to implement a similar model in the entire university sector?
It is very difficult for me to comment on the strategy of other university because I don’t know the objectives. Corvinus was the first, but it should also be seen that there are universities that were in a different position such as Semmelweis University or the University of Veterinary Medicine, where education was fundamentally more competitive compared to Western universities.
A different approach is required for different universities. We were the first, but we are not a diversified, large university whose activities cover almost every possible discipline, we focus on economics and social sciences.
Did you define exactly what Corvinus is lagging in compared to foreign, e.g., German or Anglo-Saxon, universities of economics?
In Hungary there is a huge gap between theory and practice, and this has to be changed. The slower pace of development has caused backlogs in Hungarian universities, as a result of which recent graduates do not have the skills which are required today for a position in an international company.
A new set of values needs to be established, and the student has to be put in focus. Corvinus therefore assessed, with the help of current and former students and their employers, the skills and abilities that need to be developed, and we have incorporated the feedback into the processes. During the training we want to teach all our students the abilities of critical thinking, creativity, communication and collaboration.
We focused on education based on practical, real experience, we brought lecturers from the corporate sector because skills develop with practice. It is a bit like when someone learns to play the piano: you can listen to a lecture about what the piano is made of, the harmonies and melodies but if someone never plays the instrument itself, they simply will not learn to play the piano.
Therefore, it was necessary to reform the existing degree programmes and launch new ones, to reform the training structure so that the basic courses provide more comprehensive knowledge and the master’s degree provide truly specialised, practice-oriented knowledge. We have included real corporate projects in the curriculum, and we have created project-based, practical, small-group intensive lessons.
We want to form a responsible economic and social elite. The medium-term goal is for the university to be successful in the international dimension as well and by 2030 to become the leading institution in Central Europe in economic and social sciences in the international higher education rankings.
Corvinus graduates were already in a good position before the model change; the value of a Corvinus diploma is on average 30 percent higher than that of other Hungarian universities, i.e., that is how much more our graduates can expect to earn in the market. However, they are still far from the starting salary of recent graduates from Western universities, the aim is to reduce this gap so that in ten years a Corvinus degree will not be a disadvantage compared to a German or Dutch diploma.
It is estimated that somewhat more than ten thousand Hungarian students are pursuing their higher education studies abroad. Why would it be worth for them to stay home? Can Corvinus provide training, experience and benefits as a foreign university?
A large number of Hungarian students went to England, the Netherlands, Austria or Germany. These are competitors, but we are also trying to build partnerships with foreign universities so that we can provide everything that these institutions provide. There are already plenty of international options for students to choose from, there are double degree programmes, or CEMS. (CEMS is a network of 34 leading business universities around the world, and the training is internationally ranked: it ranked 13th in the Financial Times 2020 ranking.) In the framework of various projects, a student can spend half a year or even a year at foreign partner universities.
The partnership benefits both institutions, but in order to have as many partners as possible, we need to provide the same quality of training. Excellent tutors are essential for this. The introduction of the academic career model, for example, will help the university to increase its excellence in teaching and research and strengthen the reputation of Corvinus in the international job market.
To what extent is the creation of quality education a matter of money? How did the institution’s budget evolve in the new structure? What is your budget for 2021?
One of the features of quality education is student excellence. We are very good in this respect, as the point limits are high, the best students are admitted. As I mentioned, good teachers are also essential, but the civil servant salary scale at the university did not allow lecturers to earn an income sufficient for a proper existence, so they undertook extra work outside to the detriment of education. In other words, raising the salaries of the university staff is indispensable for quality development, which requires funding.
For comparison, we had a budget of HUF 17.8 billion in 2019 and HUF 23.8 billion in 2020. With this year’s budget we will implement the two-year wage increase programme for Corvinus lecturers and staff approved at the end of 2019, and it also allows the university to provide Corvinus Scholarship places established with the support of the foundation, to expand the number of students receiving significantly increased study and social scholarships, and to develop the infrastructure.
At slogan level, the goal is to reach the most excellent students and to train the social and economic elite. What about tuition fee? To what extent does the tuition fee reduce the opportunities for students coming from less affluent families?
Last September we were able to provide free tuition to 85 per cent of the students starting their study in full-time bachelor’s programmes and 95% of the students admitted to master’s programmes in the framework of the Corvinus Scholarship provided by the foundation maintaining the University. So the best students have tuition fee free education and even other scholarships.
People are used to free education, available to everyone. Of course, free education must be provided, but if someone is not admitted to a scholarship place, they should consider investing in their education. This is an issue of information and education. According to the Graduate Career Tracking
System, recent graduates can expect a significantly higher starting wage with a Corvinus degree than graduates from other universities. The question is who is willing to pay how much to start from a better position in the labour market over time.
The aim is for the most outstanding students to apply for a Corvinus-supported tuition and to put paid education in second place, because if someone does not get into a funded place but performs well, they can be easily transferred to the Corvinus Scholarship programme, which provides tuition fee-free education the following year. So, we strive to build the culture of performance also through the scholarship system. This approach is still rare, although it really is not the same in which institution one conducts their studies.
When will the impact of the model change be felt in the labour market?
We will be able to see the knowledge that new students starting their studies after the model change will leave the university with in four years’ time. However, the system needs to be continuously refined, so let’s say 8-9 years.
By then, the contrast will be significant compared to what differences a company executive experiences between Corvinus students enrolled 10 years earlier and then. The difference will be felt in terms of problem-solving ability, critical thinking, creativity and the ability to collaborate.
To what extent are at a disadvantage those who started their studies before the model change, or in 2019 or 2020 compared to those who will start 2021 or the following years?
This is the handicap of general university development.
At the same time, there are several elements to the renewal of the university that these students can also experience: such is, e.g., digital study administration or the ongoing development of grants to support learning and career planning. Not to mention that we’re very much looking forward to seeing them in our reformed master’s degree programmes when they get there in their studies.
The European Union’s Marie Skłodowska Curie Individual Fellowship program
The annual professional conference and awards gala of the Hungarian business services sector was held on Febru (…)