If you’ve wondered how Higher Ed institutions survive volatility and prevent becoming a casualty in today’s environment, you’ve come to the right place. I recently spoke at CALEM 2019 (Conference for Adult Learner Enrollment Management), which was put on by Carol Aslanian and EducationDynamics. (You can view the presentation in our resource library.) I was talking with someone about how the current markets require different ways of reaching students for enrollment. This person was from Canada, where their national sport is hockey, and we got to talking about what made the Soviet hockey teams in the 70s and 80s so great. They skated to where the puck was going to be, not to where it currently is.
The same goes for enrollment management, strategic planning, or a host of other things – you go where students are going to be or plan for the environment that you expect, not what you currently have. That is how you navigate today’s higher ed markets, ones that are extremely volatile – you plan for what is going to happen to take advantage of what is and what you expect to be going on, not what is necessarily going on right now.
How Higher Ed Institutions Survive Volatility
What higher ed faces is what can be characterized as a maturing or even declining market and unleashing of “market forces,” including consolidation, mergers/acquisitions, and closures as we’ve rarely seen before (and not in my lifetime).
Much of this can be attributed to reduced funding from state and federal government which have increased costs to students; a decrease in the traditional college-age student while “post-traditional” or nontraditional students (i.e., those students who are not the traditional 18-24-year-old who goes to college directly from high school) has increased; online education has come into being and is even being embraced by some of the Ivy League colleges; technology driving the education bus, especially in the types of students who are enrolling, and multiple other things. Let’s face it: higher ed’s business model is broken.
So, what do we do? We need to skate to where the puck is going to be, not to where it is right now.
Are SKEPTICs Helpful?
No, we’re not talking about skeptics in the sense of “negative Nellies,” although there are a lot of those out there right now. We’re talking about what is the higher ed environment heading, i.e., what are the factors that are impeding higher ed growth and the conditions we expect in the next 5-10 years to ensure we are still relevant (and in business). To do this, we will use the mnemonic SKEPTIC to guide our thinking.
Socio-demographic
The population of the traditional college-age student is decreasing – birthrates have been decreasing in the US for a significant amount of time, basically, ever since women started working outside the home to maintain or increase income and social status. This has been replaced by more of the post-traditional students going to school – in fact, post-traditional students currently make up 74% of all college students.
Kompetition
There is far more competition in the higher ed marketplace than there ever was. As I mentioned in previous blogs and podcasts, how many MBA granting schools does the US need? Additionally, there are many foreign universities that, due to the current political climate, are enrolling students who normally would have come to the US. They should be considered as competition.
Economic and Environmental
The cost of higher ed to the student has gone up significantly over the past 40 years, not so much because higher ed has increased more than the rate of inflation (although it has a little bit), it is primarily because of the reduction of government “subsidies” that offset the cost of education.
This, plus the large number of university presidents who are making mid- to high-six-figure salaries (or more) as are athletic coaches (e.g., there are more than 25 head coaches whose salaries exceed $4 million, including Mike Krzyzewski (head basketball coach at Duke) at nearly $9 million per year and Nick Saban (head football coach at the University of Alabama) at $8.3 million per year). To sustain these high salaries, a business model where the vast majority of faculty are now low-paid adjuncts is required.
From the environmental perspective, some institutions are going “green” through the use of renewable energy and higher efficiency plant operations, but the facility’s costs, especially deferred maintenance, have grown significantly to where the national estimates exceed $2 trillion. This is another area that has had to take a backseat to higher salaries and costs and is now coming back to bite many institutions in you know where.
Politics
The current administration’s policies have resulted in a significant decrease in international students (see kompetition), but even with this, the politics around higher ed have become increasingly problematic. For example, we have seen riots such as what caused a crisis for UC Berkeley in 2017 because of the “free speech” movement. These threaten academic freedom and First Amendment rights in the classroom.
People appear to have forgotten the purpose of higher education, which is both to educate the student to prepare him/her for the workforce also to prepare that student for life. Politics has driven the move toward viewing college as part of the “talent supply chain” whose only job is to prepare students for their first job. At the same time, the “ivory towers” have become too focused on research and not enough focus on teaching and preparing students.
Technology
It is very clear to those who are in the “know” that the pace of technology is currently outpacing peoples’ ability to apply it. One needs to look no further than the book Thank You for Being Late by Thomas Friedman to understand how problematic this is. Much of this is reflected in faculty rejecting online education by emphatically stating that “it is not of the same quality as face-to-face education.” That is a red herring for faculty’s unwillingness to embrace new technology changes and how they can be applied to improve education.
Industry
The higher ed industry is in a maturing or declining market characterized by mergers and acquisitions, closings, discounting of fees, etc. Even though much of this is of its own doing, with the industry and individual colleges staying in their ivory towers and not observing what is going on in the world, but it is what it is.
Two examples of this are how programs and courses are developed and accreditation. It is very rare for higher ed institutions to reach outside their cocoons when developing new programs and/or courses – most faculty develop their own courses with little or no input from what the industry needs because they consider themselves to be an expert in a particular area. Why would they need to consult the industry (which many consider to be below them)?
Accreditation has, in some ways, been the cause of the lack of innovation in higher ed, but not for the reasons one may think. The majority of people who are involved in making the decisions around accreditation have been in higher ed for the majority of their careers, and because of this, they “know what they know and don’t know what they don’t know” instead of embracing outside opinions.
For example, one school’s provost recently left a university, and the school organized a search committee to find a replacement. Every single candidate on the shortlist was from a “traditional R1 University,” instead of having a broad range of candidates whose experiences could relate more to what students’ needs are in finding their first job. Why was this? Because the search committee was made up primarily of faculty, and we all know that we “hire people that we like and who are like us.”
Customers and Clients/Suppliers.
The vast majority of higher ed institutions do not understand who their customer is. They will tell you that the student is their customer, but who ultimately is paying for that student’s education and/or hiring the graduate: the parent and industry. Hence, higher ed generally has three different customers, all of whom want different things and require different messaging.
This is a very abbreviated list and is focused on current vs. future projected events, which is what an institution should do when strategic planning and assessing risk.
Silver Bullets for Preventing Your Institution from Becoming a Casualty
As much as most institutions wish there were easy fixes to the current problems, the problems they are facing are systemic. There is no silver bullet, and anyone who tells you that there are easy fixes doesn’t know what they’re doing (and unfortunately, there are a lot of those out there).
There are, however, a number of things that institutions can do to build a shared vision for the future and buttress themselves for the roller coaster ride which already has begun.
Understanding Market Forces, Shared Vision, and Values
First, higher ed execs (and employees/faculty) must understand that as painful as it is, consolidation is a normal occurrence in maturing and/or declining markets. This happened in the 1980s and 90s in the industry, but higher ed has never experienced this type of consolidation.
Unfortunately, it takes a toll on institutions and the people involved.
Administration, faculty, and staff must understand (and act as though) we’re in this all together. And that means that for everyone to be successful, we must build a shared vision of what education means for our institution and how we execute on that vision. For example, are we focused on STEM? Educating the whole student? Particular majors and/or specializations? Do we need to offer an MBA or a business degree? How can we modify our ecumenical degree so that it differs from the other degrees that are out there? (The latest trend is specializing the MBAs, a fad that will not last.)
To answer these questions, we need to look at fundamental questions of values. Do we truly believe that being transparent is important? What about income equality – are administrators and athletics/coaches paid far more than staff and faculty? Are we about quality of education and the employee workplace, or are profits more important? These are just some of the basic values questions that must be answered.
Market Research, Positioning, and Brand Promise
Second, we need to understand how we are perceived in the mind of our customers. To get this, we need to answer the following question: “What is one thing that:
- is unique, different, and better about us
- in the eyes of our customers
- vs. the competition in the higher ed marketplace
- that has them hiring our graduates / wanting to attend our institution?
Question. When was the last time you did market research on your institution and on specific degree programs, i.e., how your institution / current programs are perceived, do they need updating, and what new programs could be rolled out / underperforming ones discontinued? Where do the majority of your students come from – local, out-of-state, or international? How do you know your programs are meeting the needs of your students and those who are hiring them? Do you regularly invite employers to participate in developing program learning outcomes and/or courses?
Once you have done market research on these questions and understand your positioning, you are ready to build a branding strategy for who your target market is and where they are most likely to see your campaign.
Strategic Planning and Implementation
Last, institutions should build a long-range strategic plan that gives them a roadmap ten years into the future (that builds meaningful accountability and is updated at least annually). There are a number of processes institutions can use to do this, but perhaps the best of these is the holistic process that The Change Leader uses with its clients.
The best strategic planning processes include building an implementation plan and allowing institutions to build a shared vision across an institution. This shared vision mitigates resistance to change. But it is in the planning process that the real nuggets are found. As Gen. Dwight Eisenhower once stated, “plans are nothing, planning is everything.” It is in the planning process (and the debate that follows) that we figure out the keys that make the plan come alive (and successful).
The biggest detriments to building and sustaining high performance in an institution are:
- the lack of a shared vision, both in direction (strategic plan) and implementation;
- the alignment of strategies, structures, and processes; and
- the attunement of people through a lack of good leadership.
However, we should not discount the criticality of involving the right people – the key stakeholders – in the process. This is one major failure when institutions attempt to do strategic planning.
There should be a core planning team made up of the cabinet and selected members of the board, as well as key members of the academic team (deans and above). The team should be between 6-12 people (although we’ve done 25 people), as this promotes the best dialogue among team members.
There should also be a key stakeholder group involved as well. One of the key advantages of The Change Leader consulting’s way of planning is how we involve the key stakeholders in the planning process. This one thing helps create a shared vision throughout the institution, as well as mitigate resistance to change.
Bottom line. You need to learn how to skate to where the puck is going to be.
Dr. Drumm McNaughton is here to help you, and your institution not only survive but thrive. Contact us for a complimentary consultation.
