3 Enrollment Boosting Strategies for Accredited Institutions:

Changing Higher Ed Podcast 178 with Dr. Drumm McNaughton and Dr. David R. Decker

Transcript: Changing Higher Ed Podcast 178 with Dr. Drumm McNaughton and Dr. David Decker –

3 Enrollment Boosting Strategies for Accredited Institutions

Dr. Drumm McNaughton: David, welcome to the program

[00:00:03] David Decker: Thank you very much. It’s a pleasure to be with you.

[00:00:05] Dr. Drumm McNaughton: Likewise, sir. I’m looking forward to our conversation. We were talking before coming on the air about how higher ed needs to think about itself as a business for the public good, and so before we get into that, share with our listeners a little bit of your background if you would please.

[00:00:28] David Decker: I went to school at Grinnell College in Grinnell, Iowa, got my undergraduate degree there, and got my doctoral degree from the University of Kansas, and I was teaching in college for several years. I migrated into the world of business. I attended the University of Pennsylvania and got my MBA from the Wharton School. Then, I was in manufacturing for several years and became the president of a manufacturing company.

And then I recycled again back into higher education to Youngstown State University to an endowed chair. I worked in New York at the New York Institute of Technology as a dean of business and a vice president of international academic programs. And since 2007, I’ve been president of Franklin University in Columbus, Ohio.

[00:01:19] Dr. Drumm McNaughton: Oh, very good, so you’ve seen both sides of the fence

[00:01:23] David Decker: I have.

[00:01:24] Dr. Drumm McNaughton: I was going to make a smart remark about the University of Pennsylvania and Warton School, but it is a fabulous school. It’s interesting because Franklin was founded as a night school for people to gain their professional degrees.

[00:01:45] David Decker: That is true. Franklin University was originally founded as one of the YMCA schools of commerce; there was a movement in the late 19th century. The YMCA opened up 19 schools of commerce around the country, most of which subsequently evolved into institutions of higher education, like Youngstown State University, Northeastern University, and a number of others.

[00:02:08] David Decker: Franklin was founded in that way and became independent of the YMCA in the 1960s, and is a nonprofit private independent institution with a professional orientation. We’ve always had a professional orientation and focused on part-time adult learners.

[00:02:29] Dr. Drumm McNaughton: What we typically call non-trad or nontraditional. So, with that focus on the nontraditional students, you look at things a little bit differently. And, of course, your business background would probably lend itself to one of the things that I’ve talked about, it being part of the talent supply chain.

[00:02:52] David Decker: Yes, that’s exactly right. Franklin University is an institution that serves our students who companies, governmental organizations, and nonprofits employ. In many instances, those organizations are sponsoring, supporting, and paying for the education of their employees through Franklin University, but not all obviously. So, we view it as part of our mission to supply highly educated, well-trained, and prepared management personnel for American businesses and the nonprofit sector.

[00:03:37] David Decker: So it does put us in a somewhat different position than a lot of traditional higher education, which, of course, serves traditional-age students for a broader endpoint

[00:03:50] Dr. Drumm McNaughton: You’ve some bragging rights during the pandemic. You did very well.

[00:03:56] David Decker: That is true. We operate in a higher education segment focused on the part-time, working adult, with roughly 3 million students. And that segment had already gone largely online before the pandemic, and now it’s virtually completely online. So, we had a lot of online capabilities that served us very well during and emerging from the pandemic. So we were in positive growth territory throughout that period, and we’re in double-digit growth territory.

[00:04:32] Dr. Drumm McNaughton: Wow. And I guess you created strong liaisons with advisory groups to help you with your curriculum.

[00:04:44] David Decker: Absolutely. Each of our academic programs, including undergraduate, master’s, and doctoral, is supported by a program advisory board consisting of practicing professionals in that subject. So if it’s healthcare, or if it’s accounting, or if it’s criminal justice, we have a program advisory board that meets at least quarterly with the program chairs and faculty of the program to provide context and input on curricular developments and expectations of that profession so that they can be incorporated. We are regularly revising our curriculum through an internal institute that we have that focuses on course development and course revision.

[00:05:25] David Decker: So, we work very closely with community colleges, corporations, and professional organizations. All of those are excellent sources of input about how to keep our programs current and directed toward the right ends.

[00:05:41] Dr. Drumm McNaughton: Did I catch that right, that your program advisory boards meet multiple times during the year?

[00:05:48] David Decker: Oh, yes. At least quarterly. Yes.

[00:05:50] Dr. Drumm McNaughton: Wow! For each program.

[00:05:52] David Decker: Yes.

[00:05:53] Dr. Drumm McNaughton: Wow, and faculty are open to that kind of direction and ideas?

[00:06:01] David Decker: Well, they, the faculty, run the whole system. Program chairs of individual programs have as part of their responsibility the recruitment and maintenance of the program advisory boards, the setting of the agendas for the meetings, and the management of the meetings and communications with the board members. So, it’s all run by the faculty.

[00:06:21] Dr. Drumm McNaughton: Wow, that is how it should be done.

[00:06:25] David Decker: I agree.

[00:06:26] Dr. Drumm McNaughton: Tell us a little about how your background in corporate America helped inform you in driving Franklin’s growth.

[00:06:39] David Decker: Well, Franklin is a nonprofit university, and higher education, of course, as you said earlier, Drumm, is a public good; we all embrace that, acknowledge it, and celebrate it. And in fact, our higher education system in the United States is one of the powerful drivers of our economic success.

[00:06:58] David Decker: So, we all understand that. The intersection of business and higher education is natural because every enterprise has to sustain itself economically. We can’t have economically non-viable enterprises; they don’t last. So, higher education institutions have to be sustainable and self-sustaining.

[00:07:23] David Decker: And in doing that, they have to apply the known principles of good economic management, good financial management, and good business thinking to the task. You don’t want to go beyond that to say that profit becomes the objective. Profit is not the objective. The objective is the professional and personal development of the students, their employers, etc.

[00:07:48] David Decker: So, we’re not for profit, but we’re not for loss either. You have to sustain yourself.

[00:07:54] Dr. Drumm McNaughton: Absolutely. Somebody told me a while back that for-profit universities have a profit mentality versus nonprofit, that they pay taxes with their profits. Well, there’s a little more than just a nuance with that, but profit-loss, revenues-expenses, it’s both the same. You’ve got to be in the black instead of in the red.

[00:08:23] David Decker: Absolutely, you do. And, Drumm, one of the obvious things about running a complex enterprise like a university is that there are models in business thinking that can be readily applied. You don’t have to take everything to an extreme, but there’s no reason not to use these very well-developed and sensible models to understand the enterprise and how to move forward.

[00:08:49] David Decker: For example, take the four P’s, the four traditional four P’s of marketing product, price, place, and promotion. So, we tend to look at these things a little differently than traditional higher education institutions do. Let’s take product, for example. Product is usually thought of in terms of content.

[00:09:13] David Decker: So we say, well, okay, we have a program in French, or we have a program in theater, or we have a program in finance. And then when institutions say they’re going to expand our program offerings, what they usually mean by that is adding another subject like cyber security or healthcare or some new subject.

[00:09:35] David Decker: And of course, that’s all obviously true that the programs, academic programs have content, but applying the concept of product, the broad sort of thinking about product that you see in the business world to academic programs means that in addition to content, there is also structure. The structure of academic programs is part of the product.

[00:10:01] David Decker: So, for example, transferability, the ability for students to transfer credits from one institution to another without losing credits. So, articulation is a structural element of an academic program. Micro-credentials, the disaggregation of big program units into smaller units that are more aligned with the needs of industry, that are then re-articulated back into the degree programs so that they help students progress towards a credential, is a structural element of the program of academic programs. And, of course, things like prior learning assessments, where you look at the whole range of credentials earned outside the academic world and how they integrate into an academic program. So, these are all examples of looking at academic programs through a product prism that is broader than just content.

[00:11:00] Dr. Drumm McNaughton: So David, tell me about the other P’s because you’ve got product and price… Sorry, I’m not a marketing guy.

[00:11:12] David Decker: Product, price, place, and promotion. So let’s talk about price. So, price is a major feature of competitive positioning of higher education in the United States, and, by and large, most everyone thinks of price in a very self-absorbed way.

[00:11:31] David Decker: I’m talking about independent institutions now that don’t receive subsidiaries from the state treasuries. That’s its own world. And there are pricing issues there, too. However, independent institutions tend to think of what their costs are and then what their price has to be to sustain themselves at that cost level.

[00:11:52] David Decker: And then they set a list price that is typically much higher than the price they know they’re ultimately going to be able to charge. And then they discount off of that very heavily. I think the NACUBO average discount is over 50 percent now.

[00:12:09] Dr. Drumm McNaughton: Fifty-five.

[00:12:10] David Decker: 55%.

[00:12:12] David Decker: So it’s a huge number. From our point of view, that is not the way we look at pricing. First, the idea that pricing is predominantly driven by your own needs is not a market view. There are fixed numbers out in the universe that relate to the pricing of academic programs that are completely unrelated to the needs of individual institutions. So, for example, $5,250 is a fixed point in our universe – that is the amount that a corporation can deduct in one year for educational expenses for one employee and charge it as a business expense.

[00:12:58] David Decker: $7,395 is another fixed point in the universe. That is the maximum Pell Grant for one year for a Pell-eligible student. And, of course, zero is a fixed number in our universe because zero is the number that most students would like to pay for their education. So, how can you think of your pricing, taking into account these fixed points in the universe and not just what your own needs are, how much you would like to make, or how much you think you can extract from a certain student?

[00:13:42] David Decker: As you know, there are elaborate algorithms to determine how much you should discount to maximize the probability the student will matriculate. We don’t do any of that. We tend to look at the market structure and organize our pricing around the market structure.

[00:13:58] Dr. Drumm McNaughton: Let me let me see if I’ve got this. You’ve looked at IRS guidelines, you’ve looked at Pell, you’ve looked at what students want to pay, and you’ve set your tuition at those rates or close to it instead of saying, we’re going to build all this, it’s going to cost us X amount, etc.

[00:14:20] Dr. Drumm McNaughton: So you’re backing into the structure you need versus building it and saying, this is what it will cost.

[00:14:29] David Decker: Well, I would say that we have a tuition rate. So it’s not as though we don’t have any fixed price that we put on our program. We do, of course. I would say that rather than using some undifferentiated discounting model based on a statistical analysis of how independent students decide to go someplace or not, they’re not so much numbers that we assigned to programs as they are a way of looking at how students or employers or the organizations that sponsor and pay for many of our students look at the cost of the overall offer.

[00:15:12] David Decker: We don’t dispense with a tuition rate. We have a tuition rate, but we try to align how we present the cost of our programs with numbers that are important to the students and their employers and sponsors.

[00:15:30] Dr. Drumm McNaughton: Well, that makes a lot of sense. So when you are building a program, you want to build it right, but you are looking at certain price points that this program needs to come in at with all its infrastructure and everything else to maintain a profit.

[00:15:48] David Decker: Yes,

[00:15:49] Dr. Drumm McNaughton: or positive revenues. I’m sorry.

[00:15:51] David Decker: That’s surplus. So, price is much more complex the way we look at it than the traditional way of just setting a high list price and then discounting to wherever you think you can get students to pay.

If you want to look at the other elements of the four P’s, you take place, for example. People have thought of place as a main campus, and then you have branch campuses. Well, you have face-to-face instruction, and then you have online instruction. And, of course, these things all interacted with one another, the branch campuses and the online. But you could say that’s a general idea that people have had. And that, of course, those are still all true.

[00:16:43] David Decker: In the world we operate in, there’s a whole range of additional distribution aspects or place aspects that are powerful. For example, the appearance of new intermediaries in the higher education space, especially in the last 10 years or so, has complicated the task of getting our programs out to the student population.

[00:17:08] David Decker: For example, you have gatekeepers, like companies that serve as tuition reimbursement facilitators for corporations. And there’s a number of them. For a fee, they manage the whole tuition reimbursement enterprise for large corporations. They act as gatekeepers, and so you have to determine what is your relationship with them going to be.

[00:17:30] David Decker: There are content providers who are also lead generators, and you have to figure out what your relationship with them is. We could have a whole conversation about this subject, the evolution of new platforms and new intermediaries in higher education in the last 10 years or so. Certainly have to be aware of that.

[00:17:50] David Decker: And then, as far as promotion goes, obviously the biggest, revolutionary change in promotion for higher education has been the shift to digital advertising and digital communications. That requires attention to detail and an analytical framework to use effectively. You can waste money on digital just as easily as you can waste money on advertising on Monday night football.

[00:18:18] Dr. Drumm McNaughton: Or Superbowl commercials.

[00:18:20] David Decker: Exactly. So those are just some thoughts about how. A framework like the 4 P’s can help you recognize the structural changes occurring in the environment and how those impact potential students.

[00:18:37] Dr. Drumm McNaughton: We discussed place and how Franklin has moved from 80 percent online pre-COVID to 95 percent now. That’s your place.

[00:18:54] David Decker: Yes, that’s right. Place is usually thought of as how your product is distributed to the final user. In this case, that refers to the instrumentalities, the modalities used to transmit academic programs to the students taking them.

[00:19:14] David Decker: So you have face-to-face instruction, you have branch campuses, you have online, and intermediaries. You can have all those methods of offering an academic program and still not get any students unless you are using the sort of intermediary structures that stand between you and the potential students.

[00:19:35] Dr. Drumm McNaughton: And the promotion piece that, for most institutions, that is challenging for them. They don’t know how to promote their things. We’ve seen billboards, we’ve seen social media, et cetera. You guys at Franklin approach this differently through the relationships you’ve built.

[00:19:56] David Decker: Well, we do think that promotion is very often thought of primarily as advertising, and advertising is only one element of promotion. However, it is the one that most higher education institutions focus on to attract attention to their institution, and institutions spend a lot of time on what the messaging should be and what the outlets should be for their advertising.

[00:20:25] David Decker: And, of course, we do too. You have to do that to manage it properly, but there’s a whole range of methods for communicating a message about your institution that has nothing to do with advertising. We have our relationships with community colleges. We have our community college alliance.

[00:20:43] David Decker: We have hundreds of community colleges all over the United States that are our partners from which we accept transfer credits. We have articulation agreements with. Those community colleges represent credibility enhancers for Franklin University with their students because if you’re a community college student and your community college says, “We have an agreement with Franklin University, and many students have gone to Franklin University and been successful.” You can’t buy that kind of advertising; that provides immediate credibility. Same with a company, If you’re on the approved list of a company’s educational offerings, the employer’s credibility transfers to you as an offer of academic programming. So, we try to be creative about getting the message to our potential students in ways not exclusively advertising. It’s not that we don’t use advertising. We do use advertising; we advertise a lot, but it’s not the only method,

[00:21:49] Dr. Drumm McNaughton: That’s an important piece. How many articulation agreements do you have?

[00:22:04] David Decker: I’m going to say 300-400.

We have relationships with community colleges all over the United States, and we have evaluated the courses in their curricula so that we can tell students who apply to us from those institutions which courses we will take as transfer courses and where they fit into the baccalaureate program.

[00:22:30] David Decker: And we have evaluated and have in our database about 180,000 courses from almost 1,000 community colleges all over the United States. We can immediately inform a student that the course has been successfully completed if they present that class, and we show them where it will fit in our curriculum automatically.

[00:22:55] David Decker: We’ve been doing that for 25 years, and that’s how we got to 180,000. So, we have been very successful by intensely focusing on transferability and articulation with our community college partners. We have a well-developed pathway portal that their students can come through and get all kinds of information about baccalaureate possibilities.

[00:23:18] David Decker: We spend a lot of time on that. As a general rule, Drumm, about half of our students are what we call affiliated students. In other words, they come to us either from a community college, an employer, the military, or someone we have an affiliation relationship with. Only about half of our students are unaffiliated.

[00:23:39] Dr. Drumm McNaughton: And those transfer credits, I’m blown away with how many courses you have that transfer, and you know exactly where. It is a testimony to the importance of doing these types of things and the ability to give a student who is applying or thinking about applying an answer very very quickly.

[00:24:02] David Decker: As a general rule, immediately. Community college students who present their transcript, if they’re in our network, we can, in many instances, get their transcript electronically and even get it for them if they want; we can tell them right away what transfer credits they will receive, how that affects the time and cost of completion of not just one academic program. We might say if you go into business administration, it’ll take you X amount of time and cost you Y amount of money to finish. But if you do accounting, it will cost you a different amount and take a different amount of time. Or if you do HR. We can lay it all out for students on the front end.

[00:24:44] Dr. Drumm McNaughton: Wow, that is amazing. I mean, that is looking at the transfer process holistically and understanding what students need to be able to do this.

[00:24:59] David Decker: It is, Drumm, it’s what is, it’s removing the friction points, the friction points that you and I, come from a world where getting your transcript was a nightmare you, you wound up and he’s okay, I’m going to write to the registrar’s office at a university that I went to 15 years ago and say, when I went there and then ask them if they will send it and then they’ll send it in a sealed envelope with a signature on the back, and then I’ll take that personally into some office and all that. That’s all, we don’t need to be doing that.

[00:25:30] Dr. Drumm McNaughton: I remember our son was going into the Peace Corps, needed a transcript, and he went to the university that he went to, which was a 30-minute drive, went to the registrar’s office, asked for, and he says, “Oh, we can have that for you in six weeks.”

[00:25:49] David Decker: Yeah.

[00:25:49] Dr. Drumm McNaughton: Come on, this is nothing. So, ultimately, I called a friend who just happened to be the dean of the College of Business. Dennis, can you work this out? He had it that afternoon. It doesn’t have to be that hard.

[00:26:04] David Decker: No, it doesn’t.

[00:26:06] Dr. Drumm McNaughton: So, well, David, this has been a fascinating conversation. It reminds me of what a wise man told me years ago. When you go to business school, you’ve got different kinds of curriculum. You’ve got accounting, you’ve got economics, you’ve got operations, et cetera, et cetera.

[00:26:26] Dr. Drumm McNaughton: You’re looking at business, the same company, through a different lens. You’re doing that by looking at education through a different lens. It’s not wrong. It’s different, and it works very well for you. So kudos for what you’ve done there. I mean, you’ve been there for a long time.

[00:26:49] David Decker: Well, thank you. I appreciate you saying that, Drumm. We’re pretty proud of what we do at Franklin. We have great reviews from our students and employers, and that’s what we’re looking for.

[00:26:58] Dr. Drumm McNaughton: And what distinguishes you is that close ties to employers, somebody coming to Franklin, they will be able to transfer credits in. They will be ready to hit the job market when they graduate and even before.

[00:27:13] David Decker: That’s right.

[00:27:14] Dr. Drumm McNaughton: So, David, three takeaways for your fellow presidents and board members, please.

[00:27:20] David Decker: Well, one thing I would say as a takeaway is, don’t limit your thinking about what you are doing. And we go back to that product question. Don’t limit your thinking about academic programs to just content. Expand it out and think, what are we actually talking about here? What are the attributes of the program offering that are important to students? So, try to break out of the boxes naturally imposed by the academic world.

The second thing I would say is fail fast. You try something and it’s not working, discontinue and move on to the next thing. And don’t spend a lot of time explaining why you were right; it would have worked if something else had happened; those are wasted moments.

[00:28:05] Dr. Drumm McNaughton: So what, now what.

[00:28:08] David Decker: Exactly. The third thing would be what President Reagan said, “it’s amazing how much you can get done if you’re prepared to let others take the credit.” Giving other people credit is so easy, and it produces such an immediate positive result.

[00:28:27] Dr. Drumm McNaughton: Those are great. Thank you so much. What’s next for you

[00:28:30] David Decker: I love it here. I feel like we are breaking new ground all the time. And, a year from now, you and I can talk again, and you’ll hear some of the things we’ve done that I’m not prepared to share right now.

[00:28:43] Dr. Drumm McNaughton: I look forward to that. Let’s put it on the calendar.

[00:28:46] David Decker: Very good.

[00:28:48] Dr. Drumm McNaughton: David, thank you. It has been wonderful having you on the show, and I look forward to the next time.

[00:28:53] David Decker: Thank you, Drumm, nice to talk to you.