Success Strategies for Struggling Small to Medium Sized Colleges and Universities – Changing Higher Ed Podcast 120 with Guest Rick Beyer
In this episode of Changing Higher Ed podcast, Dr. Drumm McNaughton and Rick Beyer discuss innovative approaches and success strategies for struggling small to medium-sized colleges and universities.
Rick Beyer, Executive Chairman Core Education, PBC and has had a very unique career in higher ed – one that has positioned him to make Core very successful. He has sat on higher ed boards for over 20 years, was president of Wheeling Jesuit University, and has participated in more than 15 higher ed mergers.
Rick shares his perspective on the use of shared services in Higher Education and how it can drive innovation and efficiency, both strategically and tactically, to strengthen smaller schools while enabling them to remain independent.
Systemic Issues in Higher Education Call for Transformational Change
In today’s higher education landscape, large universities are doing fine while small and medium-sized colleges are struggling to prosper. These smaller schools are facing significant pressure due to a combination of factors, including declining enrollments, a lack of capital, and, importantly, systemic issues in higher education that have long existed. Fixing these systemic issues will take transformational changes among all institutions – but smaller schools that are already in trouble must act quickly to find new and innovative ways to survive.
For large universities, access to capital and other resources that come with large economies of scale have offered protection from these pressures. Small and mid-sized schools that don’t have the luxury of these resources are facing mounting pressure. As Beyer notes, “That catches up to these institutions after a while, and they don’t have the resources to execute. They have a lot more need, and they just don’t have the capital or size to make things happen at the right level.”
The systemic issues that have long-dogged institutions of higher education are nothing new, but they are now beginning to threaten the very survival of more and more small and mid-sized colleges. As Drumm has previously noted, the COVID-19 pandemic is accelerating needed changes in higher education by a decade or more. In the immediate wake of the pandemic, large grants from the federal government temporarily delayed the apparent need to implement transformative changes. Now, leaders of smaller colleges and universities must take definitive action to stop financial hemorrhaging, stabilize finances, and start on the path to long-term prosperity.
Declining Enrollment and the Impact on Small Institutions
The problems facing smaller institutions of higher education are not limited to one specific area, but the overall decline in demand for college degrees is a major factor – and it’s hitting small schools the hardest.
- Without economies of scale, small institutions lack the resources to stay afloat while demand for enrollment continues to decline.
- Consumer behaviors are changing as fewer jobs require a college degree, leading to greater demand for other learning modalities.
- The destabilizing effects of the pandemic continue to impact small schools, especially those that were already struggling financially.
- With the enrollment cliff approaching, the decline in demand for enrollment is expected to accelerate.
A college degree was once considered a prerequisite for many professional jobs. Now, more and more corporations in America are declaring that job candidates no longer need a degree to be considered and hired. Instead, those corporations are now looking more at competencies and skill-based attributes as the most important qualifications for employment.
“Many students, including what we used to call traditional student-aged college kids, are opting for different kinds of learning.”
Significantly, the state of Maryland has also declared that a college degree is no longer needed for many jobs. This is causing major shifts in the market, and as a result, consumer behaviors are changing, notably in how learning and education are delivered. Students that may have sought college degrees in the past are now turning to certificate programs, badges, and other forms of training to gain the credentials they need.
Improving Efficiencies Through Affiliations and Shared Services
As the higher education community enters what Beyer fittingly calls a consolidation era, the mounting pressure on smaller schools will lead those institutions to join forces. Beyer, an expert on mergers in higher education, predicts an increase in both mergers of necessity and strategic mergers. He also points to a third option: affiliations.
At Core Education, Beyer specializes in improving efficiencies for small and mid-sized colleges in the form of shared services. Beyer explains:
“We’re seeing more and more colleges saying, we know we need help, but we also need to remain independent.”
Through the model of affiliation, a college can affiliate with a supporting organization that has substantial shared services – without giving up their identity or losing control of their institution, and while enhancing their ability to focus on long-term prosperity.
Short, Medium, and Long-term Stages of Transformation
“Transformation has to come in stages, but it does require a fundamental shift in thinking about organizational and other kinds of assumptions.”
When colleges are in trouble, it can be difficult for leaders to see the whole picture. Immediate, short-term pressures often overshadow intermediate and long-term goals. Beyer frames the stages of institutional transformation in three parts:
- Short-term financial improvement
- Intermediate financial sustainability
- Long-term financial prosperity
With the proper guidance and perspective, alleviating short-term needs can be part of an overall, long-term pathway.
“There are things colleges can do immediately because they are under immediate short-term pressure, but they can also be part of a pathway towards transformation by aligning or affiliating with a supporting organization like Core.”
When Core Education talks to an institution of higher education, they explore what is possible – and those possibilities alone often exceed a school’s organizational assumptions about what can be done. Organizational assumptions, Beyer says, put pre-existing limitations on what institutions can do. That’s where an external perspective – such as an affiliation with a supporting organization like Core – can prove invaluable. External affiliations help identify and overcome assumptions, which is fundamental to achieving transformative change.
Technological Capabilities and Other Benefits of Shared Services
Smaller institutions often lack the depth of resources needed to deliver strong services across the board to their students and shared services organizations like Core focus extensively on two key areas: revenue growth and diversification, and technology.
“Students today are mobile, and when they want answers, they want them immediately. If our systems and workflows are not designed to meet their expectations, the students will look for other alternatives.”
Attracting students has become a 24-hour per day, 7-day per week digital acquisition process that requires technologies, new operating rhythms, and new workflows. Small colleges that haven’t yet adapted to this new reality may not be positioned to consider, let alone implement, all the necessary systems and components.
In the area of technology alone, Core Education has identified at least 35 competencies that institutions need, regardless of size. One of the major benefits of working with a supportive shared services organization is that they already have the people in place for it all, including:
- Redesigning workflows
- Implementing new technologies
- Dramatically increasing inquiries and applications
- Improving matriculation
- Implementing lead generation workflows
- Operating a contact center
- Providing enrollment support
- Driving revenue growth and diversification
New Iterations on Older Models of Shared Services Organizations
The idea of shared services is not a new concept. Two successful shared services organizations, TCS and National University paved the way for newer iterations of shared services like Core. Beyer points out that each of the institutions that joined with TCS is doing better today than they were before, which is why his organization was largely modeled after these earlier entities.
“TCS and National really validated the concept of small to mid-size colleges using a supporting organization to move the organization forward as a whole.”
Share Services – Remain Independent
The strong desire among small colleges to retain their missions, identities, and control over their institutions is creating pushback against potential mergers at many small colleges. Unfortunately, this resistance can also cause schools to wait too long before exploring alternative options, including affiliations and partnerships with shared services companies. An institution’s financial issues can continue to slide downwards by waiting too long to decide on a plan of action, which may ultimately limit its options and decrease the likelihood that the school will remain independent.
The beauty of shared services organizations is the ability of each partnering institution to remain independent while optimizing processes, efficiencies, and enrollments. A shared services organization can meet each individual school where they are, providing a tailored approach to fulfill that institution’s unique needs. Over time, shared services companies can provide the same kinds of efficiencies enjoyed by large universities for smaller colleges at greater economies of scale.
Three Recommendations for Higher Education Leaders and Boards
- Transformation comes in stages. With respect to shared services, leaders should think about pathways to short-term, intermediate, and long-term improvement. Shared services can help institutions lay out those pathways, enabling them to move from financial improvement in the short term to financial sustainability, and, ultimately, to prosperity.
- Presidents of small and medium-sized institutions must champion efforts toward transformation, get buy-in from their board leaders and captains, and keep everyone focused on the goal of institutional transformation.
- Leverage internal communications channels and set good expectations. Using the right language to reflect the strength of your focus – and your goals of being independent and prosperous in the long term – can make the pathway forward look vastly different than it has in the past.
About the Host
Dr. Drumm McNaughton is a Higher Education Consultant, CEO of The Change Leader Consulting Firm, and an international leader in transformational change for Higher Education.
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