The Near Death Experience of A College: The Story of A Visionary President Who Overcame Today’s Challenges to Become The Model for 2020
Many tuition dependent colleges and universities are being forced to deal with the potential of at least one of what we have termed the Three C’s – change, closure, or consolidation. Fortunately, most are only dealing with the reality they must change to avoid the possibility of academic or financial insolvency. The good news is that those institutions that are serious about change and execute well have an amazing opportunity to reinvent and revitalize themselves – ensuring their relevancy for years to come.
Imagine you are the President of a private, liberal arts institution in the Midwest. Your school was founded over a century ago and is about as traditional as they come. Over the past decade, your college enjoyed solid growth and healthy revenues. You were able to expand program offerings, add faculty, and build a state-of-the-art academic building. Then in 2008, you experienced the highlight of your tenure – your school appeared in US News & World Report rankings for the first time and your endowment that was literally pennies when you took office now exceeded $ 25 Million. If all the above was not enough, you were on track to have a record-setting freshman class enrollment! All your work had finally paid off and your momentum seemed unstoppable.
Fast forward to one year later. The Great Recession has significantly cut into your parents’ ability to pay the school’s $ 25,000 annual tuition. Not only is your freshman enrollment down but your continuing enrollments are being impacted as well. Your staff advises you that total enrollment may decline by over 10% and that your overall revenue may decline as much as 15% with the discounting that will be necessary to keep the students you have. What’s worse is that your endowment has lost 33% of its value. Despite all of the bad news, there is more. Your bondholders and regional accreditation agency are both becoming increasingly concerned about your school’s financial stability. While you argue that the financial setbacks are temporary and induced by the recession, your bondholders do not feel you have a sustainable financial future. Your Board of Trustees is demanding action and has suggested you begin looking into the normal exit strategies for the school– partnering with a for-profit firm or merging with a larger, sister-school.
You soon realize that selling or merging will not be feasible and even if it was, either of these moves would be the effective death of your institution. As bleak as things are, you refuse to give up. You have worked too hard to build your institution. You also have a deeper stake. As a life-long educator, you are extremely concerned about what you are witnessing beginning to take shape in higher ed and what it means for providing all students with access to quality educational opportunities. You are beginning to observe more selective institutions (including higher quality for-profits) only being available to students who have a higher academic pedigree or family income. Most everyone else is being relegated to attend overcrowded or lower quality institutions whether they are non-profit or for-profit. You feel strongly that schools such as yours offer a quality education to a wider range of students. Today it is your school but who is to say that many more schools like yours will not have to fold or compromise themselves?
At an AGB conference, you meet a president of a small liberal arts college who took a different path several years ago. He explains that like you, he leads a school that is in an area of a country that is expecting significant declines in the traditional college-age population over the next decade not to mention the impact of sweeping demographic changes. To your complete surprise, the President also shares that he was able to increase total student enrollment by 225% over the past 2 years alone by taking the school’s niche business, sports-management, and nursing programs online. The online enrollments have bolstered the school’s traditional operations and effectively shielded it from financial challenges. In fact, the President shares with you that he has been able to increase traditional enrollments by simply changing the way his institution does business and utilizing revenues from his online enrollment to lure students from outside of the school’s traditional recruitment focus area.
You recall looking at offering online degree programs a couple of years ago but your faculty was not supportive at all. Additionally, being in a rural area, you did not feel you had a market of distance-learning students you could attract. Things are different now though. You need to do something fast or you will lose the faith of your Board and possibly your accreditation. By putting in place significant cuts and other austerity measures, you create a 2 year window that you feel you can use to maintain the institution while you implement a bold turnaround strategy.
After a little persuasion, you are now able to convince your stakeholders that it is time to launch online programs. Unlike other schools that are stepping into online with MBA programs that have already saturated the marketplace, your first online programs will be graduate degrees in Social Work, Finance, Accounting, and Taxation. Your data-driven research has shown that these programs are high in demand instead of other degrees you were encouraged to offer. You also rightfully realize that the undergraduate market is an even larger opportunity so you take your highly regarded social work, early childhood development, accounting, and psychology programs online. Perhaps your boldest step was to launch Associates degree programs. Your extensive research, however, identifies that marketplace as a large one and as underserved. You are particularly surprised to learn that 90% of a major for-profit institution’s enrollment growth over the past 5 years has been with associates’ degree seeking students.
You realize you have one shot to do this right and that means you must proceed at full steam. Failure is not an option! Your first step is to hire firms that can a) assist you with market research, marketing, student recruitment, and retention and b) who can convert your curriculum online. While the investment required will require a substantial portion of your remaining endowment funds, you feel confident that the return on investment will make it worth it. Your Board supports your plan provided that you agree to stay on for the next 5 years to see this important and risky initiative through. After the Board’s unanimous stamp of approval for your plan, the Chairwoman of the Board says that you will be “personally accountable” for the success or failure of your plans. The pressure is on!
Fast forward a few years, your plan is working. You have increased your overall enrollment by over 400 more heads than you had in the Fall 2009. That may not sound like much to your colleagues that run larger institutions but for you it means everything. You have turned around the school’s financial position in just a couple of years. Your compelling programs and investments in student recruitment brought in students from down state and regionally – students you would have otherwise never had the opportunity to serve.
The success is encouraging and is being viewed positively by all stakeholders within your institution, however, due to changes in population and your high cost, your traditional enrollment numbers have yet to recover from their peak highs. You have invested more to recruit traditional students but with minimal results. Your Board is demanding progress in this area, yet you are not sure how you can compete for students that are being courted aggressively by more selective institutions. You are also finding that changing demographics are making it more difficult to recruit college-aged students in general. The large schools in your state’s urban areas that you used to be able to rely on for recruitment purposes are now heavily Latino with many prospective first generation college students. While many of these students are enrolling in your institution just as Anglo and African-American students did years before, your recruiters are telling you that some of these students are wanting to stay closer to home – to be close to family or to help support their families. As a result, many of these students who are otherwise highly qualified to enter your institution are instead choosing community college and/or 4-year public schools that are closer to home and offer online learning options for traditional-age students. Convenience, value, and technology are very important to many of these students – even over institutional reputation.
As another year goes by, your revenue situation and surplus continue to improve. Now it is time to invest in a strategy to attract more traditional learners. After all, a few years from now will be 2015, and you are hoping to retire by then. While you can retire with a sound legacy for saving your school, you want to also be able to retire knowing that you have set your up your successor for real growth in traditional learner enrollments. But, how do you begin attracting a generation that has been exposed to the Internet since birth and looks at email as something as outdated as we might consider a telecopier?
Then it comes to you! You develop an innovative plan called “The 2020 Plan.” The name is inspired by a study you read back in 2009 that suggested that potentially a majority of high school students in 2020 will be online or virtual students. First, you launch innovative and career-oriented online hybrid programs that allow your traditional students to live at home and work while enjoying a handful of traditional face-to-face opportunities. What makes this initiative particularly exciting is that you have developed partnerships with relevant urban employers, providing your students both employment and practical learning opportunities as part of the overall education experience!
Next, you launch an online high school. With all the content, for-profit providers, and charter schools out there now, it is not that difficult to do so. The plan is to recruit high school students from within your state. Your virtual high school students will not only be able to enjoy a dynamic college-prep curriculum online but also be able to attend your campus or those of partner high schools to play sports, attend prom, or involve themselves in required exercises that encourage socialization and face-to-face interaction. The early experience with your institution will also develop loyal students who will want to earn future degrees at your school.
What excites you even more about your virtual high school is that about 50% of your capacity will be reserved for students at high risk of dropping out of a traditional high school placement. You will partner with several urban schools with high drop-out rates to provide a collaborative learning program that will include specialized online instruction, access to advanced placement courses that are typically only available in higher performing suburban schools, and intensive instruction at the student’s local school site. The concept not only enables you to make a difference with the unacceptably high dropout rate in your state but also creates yet another base of traditional students to mold and eventually matriculate into your traditional program.
It is now 2015 and it is finally time to retire! You end your tenure with 1,500 online non-traditional students, Although this was the year that you projected your adult population would overtake your traditional population, you are excited to learn that for the first time since the 2008-09 school year, your traditional population has experienced double-digit growth and now exceeds 1,650 students! You have not only begun to again grow your traditional population but you have done so by adding your first 60 students from your college high school! On top of that, your outreach to students and families in urban areas – offering a truly hybrid online/traditional educational experience has paid off! There is more demand than supply!
As your presidency comes to an end, you look back at the past 6 years specifically. What an experience it has been! You are a modest leader but it is difficult for you to not take enormous pride in the fact that you took your institution from a truly Near Death Experience to where it is today! You are especially proud that your institution has survived and thrived through the past several years. You are humbled by the fact that many others did not survive or are no longer what they once were. Yes, it is a different time and you have changed but your institution is alive and well. You are educating more students, delivering better outcomes than you did even in the good ole days, and you have expanded your faculty! Best of all, you never had to sacrifice your values-based mission although you have expanded it!
This is a hypothetical situation based on emerging trends and taking advantage of real-life leadership challenges/responses of dynamic college and university presidents.
John Hall
Greenwood & Hall
jhall@greenwoodhall.com
