National planners struggle to formulate policies which will enable mass higher and universal tertiary education systems to meet diverse needs for lifelong learning in a knowledge society. Institutional leaders experience ambiguity and stress in seeking an identity appropriate to their particular university in a contradictory policy environment which gives mixed messages. With high levels of stress, multiple conflicting demands and scarce resources, there is a natural but short-sighted tendency to manage more tightly and prescriptively as a way of trying to ensure productivity and accountability. This analysis from a large, broad-based and deliberately innovative Australian university examines these tensions. The new RMIT leadership has set out by transparent and participatory means to diagnose its environment, restate its mission and strengthen internal and external partnership to do its work. Networking and engagement are essential for a knowledgemaking and knowledge-using institution to learn and contribute effectively. However, contradiction and uncertainty in the policy environment, which reflect wider societal ambiguities, make this a daunting task...