How to move a University from Crisis to Transformation. The COVID-19 virus has essentially canceled the Spring term as we envisioned it; i.e., on-campus classes have been canceled, many if not most have moved online. There are serious implications for enrollments for Fall term and finances, and many are wondering if there will be a Fall term at all (we think so). Some are saying that we won’t get back to normal until next year, especially when it comes to sporting events.
Then, when one factors in the enrollment cliff that’s coming, it might not be pretty for a whole lot of institutions.
When the all-clear sounds (and it will), this won’t be a typical “students are back from summer break” event. Think about 9/11 and how peoples’ mental models shifted, and how it gave rise to TSA and Homeland Security.
There are three types of change: incremental (which is what higher ed has always gravitated to), transformational, and revolutionary (think the internet). At first, I thought this would be a transformational change, but I think I was wrong. This is going to be revolutionary.
There will be winners and losers. Many will use this time to transform, but others will become casualties.
We need to be thinking about how we can transform to take advantage of what will be the “new normal.” And that’s the focus of this blog. The new normal.
Current Situation and Going Forward
Now that the majority of institutions have “fixed” the Spring term, institutions must redirect their attention to business matters. That’s because, with this revolutionary shift in landscape, I believe we’ll start to see some if not all of the following:
- Strategic planning. Throw those old strategic plans out the door. New plans are needed that take into account the new reality.
- Risk planning MUST be done. Not only financially but in multiple areas. The norm will become table-topping scenario planning.
- Boards must become more proactive in planning, and backstopping administration. There is only so much that the president and his team can do, and your board should have broader expertise so they can pitch in and help.
- Board recruiting will focus on recruiting members who have broader skillsets. This is already happening but will continue to be critical in the upcoming months and years.
- Institutions will continue to embrace distance / online education.
- Accreditors will begin to loosen up requirements for online education, especially now that the distance education guidance based on Neg Reg 2019 has been published for comment in the Federal Register. New and more innovative ways of allowing DE will begin to spring up and learning will be improved (hopefully).
- The casualties of closures will mount up – about 10-20 percent of higher ed institutions will no longer exist, either through closure or mergers/acquisitions because of finances.
Planning and Risk Management
In a previous blog, we discussed how critical it is to use strategic and risk planning to chart your course in turbulent times. The lessons from that blog are very applicable right now – looking at the future external environment, building a shared vision through stakeholder input and attunement, and doing risk planning.
The first thing I advise my clients is to (almost completely) throw out their current strategic plan because it was based on assumptions that were very different than the operating environment that we are now in. Institutions must be realistic as to where they are and what they need to do to become (or remain) sustainable (i.e., in business). Tough choices will have to be made.
Some of those tough choices will involve finances and programs (see below). Institutions with very sharp CFOs will be able to guide you through these choppy waters. Taking out lines of credit, dipping into your endowment (if you have one), and getting relief in the form of federal dollars, all these things are strategies that your CFO (and your board) should be able to advise you on.
The future environmental scanning process examines the environment in which your institution will be operating 5-10 years into the future using the mnemonic SKEPTIC: socio-demographics, kompetition, economics/environment, political, technology, industry, and customers/suppliers. If you did this before, you can well imagine that the assumptions you made were based on a different reality than we find ourselves in now – hence, the importance of going back and re-examining assumptions and prognostications.
Getting buy-in for a shared vision to move forward is also an important step. Hopefully, your communications with stakeholders (and especially faculty) have been very transparent, and there is a strong bond of trust that has been built up. Crises like this can be used to “ram” changes through quickly, but we strongly advise you to blend crisis management leadership with consultative and relationship leadership. The two work hand-in-glove, and whereas you may have the authority to do something fast, sometimes it’s best to come to these decisions jointly versus autocratically.
Risk planning is going to be critical during this time and going forward. We are advising our clients to do tabletop exercises on how to deal with and mitigate risks. Of course, black swan events such as what we have now aren’t necessarily foreseeable, but if risk planning is done properly, you will have bits and pieces from other scenarios that can help to inform your decision-making now,
We are advising our clients to start taking a look at alternative strategies such as mergers and acquisitions as we go through and come out of this crisis. As we all know, mergers and acquisitions in higher ed have been the “third rail” of strategies – they are perceived as “failing” and are looked at only as a last resort before closure (which is generally too late). This could not be any further from the truth, and institutions’ perceptions must change if and when it comes to this.
There are three primary reasons to think about a merger or acquisition:
- Acquiring new students and/or programs;
- Acquiring new technologies/modalities of delivery (including online / DE); and
- Achieving efficiencies that will lead to greater profitability.
Let’s face it. There are a lot of institutions out there whose finances will not tolerate the hit that this crisis will bring to their bottom line. These institutions should be reaching out to other competitors in their space to see about being acquired. And for those whose finances are in better shape, they should consider acquiring other institutions that could help them grow their enrollment and/or new programs.
And NOW is a good time to start looking at either acquiring other institutions or becoming part of another through acquisition.
We’ve written and reported on this a lot – please see the blog series on higher ed mergers (Part 1 and Part 2), and two podcasts that focused on mergers (Podcast 011 with Gerry Czarnecki and Ricardo Azziz podcast 031). In these articles and podcasts, you get some great tips and ideas on what to focus on, and how to execute this.
Making Tough Choices on Unprofitable Programs
This is a good time to take a hard look at your institution’s programs that are not “profitable.” These can be very tough decisions, but going forward, you must “jettison dead weight” to keep your institution afloat – you cannot be all things to all people.
We did a recent podcast on academic restructuring with President Lori Varlotta of Hiram College. What she did was the best practices model for “peacetime” transformation, but there will be many institutions that do not have the luxury of time to follow her process. Still, there are nuggets in her description that can help any institution, namely transparency in the process, ensuring faculty have a say, and coming to a solution that is fair and equitable, including providing a good severance package for those whose programs will no longer be offered.
Going and Staying Online
Many institutions (actually, the vast majority) transformed their traditional on-campus programs to online in a very short period of time. BRAVO!!!
Now comes the real work.
There have been a number of excellent articles in the Chronicle on transitioning traditional on-the-ground courses to online, and now is time to go back and make these courses truly excellent as examples of distance education. These include ensuring that program and course learning objectives are clear, met, and measured, that assessment is built into each course, and faculty and students have excellent training on the new delivery and pedagogy – all the things that you would normally do when rolling out a new program delivered traditionally.
There are a number of great resources out there on how to do this that include 4 Lessons From Moving a Face-to-Face Course Online, Top 5 Tips To Convert Your Traditional Course Into An eLearning Format, Translating On-Ground Courses into Effective Online Education, and Tips for Adapting an In-Person Course to an Online Course. We strongly recommend that you enlist a team of instructional designers (vs. leaving it up to faculty) to assist in this task.
Moving online needs to be a deliberate choice, but given the changing demographics and how much people need to be employed to meet personal and educational expenses, this is probably the best option you can take for maintaining or even growing enrollment.
This is a crisis situation, and as that, it’s important to make sure that your board is informed and involved. We suggest engaging board committees that look at finances, strategy and risk, academic affairs, and university life since this crisis will have wide-ranging ramifications.
Board recruiting for the future is critical going forward. Ensure that your Nominations committee uses as Skills Matrix as a tool to understand the skills of your board and what skills should be recruited going forward.
Just because we are in the crisis and starting to see a glimmer of daylight at the end of the tunnel doesn’t mean that communication with stakeholders should slow down. In fact, we suggest it actually continues and increases.
Your stakeholders want to know how you’re faring through this, as well as what the future is going to look like. This is critical from a fundraising perspective – most institutions are not going to have the same robust finances that they have had in the past, and informing stakeholders of how the institution is doing and what you’re doing is important.
For example, one institution that I know was looking at a $2 million deficit because of having to refund room and board for the 850+ students who lived on campus. They went out to their key donors and alumni base with a request for funding, and they brought in $3 million, which more than offset the deficit.
I’m not saying that this is the norm – this particular institution has a very loyal base – but because they had kept their base informed of what was going on, they were able to go out with a plea for help and it was (more than) met.
Summer / Fall Term Student Recruitment
Just because the Spring term is canceled (and there is a discussion about canceling the Summer term as well) doesn’t mean that the recruitment process stops.
We are recommending that your enrollment office be very proactive in reaching out to prospective (and current) students to keep them informed of what’s going on. This time is CRITICAL to being focused on enrollment. You need to make every effort to ensure that students are selecting your institution and will be enrolling. Obviously, you don’t make a pest of yourself, but they want to know what’s going on and how the institution’s plans will affect them.
Also, prospective students are requesting that the “reply date” be pushed back. We are recommending to our clients they should do this. Yes, it puts more uncertainty into the enrollment picture, but (prospective) students are attempting to figure out how they are going to pay for the next year (or if they will even come), and any compassion you can show them will help to put money in your bank account.
Institutional leaders also must be aware that this crisis may lead to other institutions trying to “poach” your current (and prospective) students since they are no longer on your campus (or wondering if your campus will be opening again). Therefore, it’s important to continue to be proactive in reaching out to these folks and their families to continue to nurture these relationships, communicating this next chapter for your university and that you’re ready for the new start. You also want to begin to share stories about your institution’s resiliency as well as its new programmatic features, such as online education.
This is just another reason that communications are so critical right now – you want them to come, and they have to trust that they will be safe AND can count on your still being in business.
Check the Culture Pulse of Your Institution and Potential Students
One of the things we discussed in the previous blog was how to find out what people are thinking and communicating to address their concerns. Smart leaders find ways to get feedback, whether through surveys, “hanging out” in the chat rooms that your students hand out, or other methods to integrate into your communications and planning.
This is important for your institutional culture but especially important for your enrollment going forward. Invite those who have expressed an interest in attending your institution next year (even current students) to “follow you” on your social media channels. Routinely communicate with them about what the institution is doing, and get them excited about attending and/or coming back next term.
Looking to the Future
You may want to use this period of time to look at your institutional positioning – I have spoken with many institutions who are doing this very thing. This can be done as part of revisiting your strategic plan and using this “new normal” to identify a roadmap for the future. Do market research to identify ways to attract and keep students. What made Wayne Gretzky and the Soviet hockey teams so great was that they “skated to where the puck is going to be.” Higher ed needs to do this same thing when it comes to marketing for enrollment – where are your future students going to be, and how do you reach them?
Remember, people want to be included and engaged in the institution’s future. Find ways to get feedback, whether through surveys or other methods, to integrate into your planning. If you get people involved in these types of activities and make their lives as normal as possible, they will appreciate it. They also feel included in the processes and remain engaged with and committed to the institution’s future.
We’re in unprecedented times, and unfortunately, none of us know how long this is going to last. Our best guess is we will be able to sound the all-clear for the Fall term, but that is a guess. The good news is that it will wind down, and we need to be prepared for that when it comes.
We’ve given you a lot of tips and ideas to be thinking about as you move forward, and even though the times are challenging but if you move forward in a thoughtful, measured and collaborative manner, you can position your institution for the best possible outcome.
In other words, don’t let a good crisis go to waste.