The modern higher education “advancement organization” has been evolving since the 1970s as development, alumni relations and communications have become increasingly integrated, yet in widely varying structures with no clear “one size fits all.” The trend toward “engagement” over the past decade linked these “three legs of the advancement stool” more closely and operationally. Besides adapting lessons from business and customer relationship management, institutions have sought to engage alumni on a journey from loyalty to commitment to contribution to generate the sustained financial support increasingly vital to the health of colleges and universities. Read more >

“Risk assessment and compliance” have typically governed strategic plans for businesses but, until recently, the concepts have not permeated strategic planning processes for colleges and universities. Broadened from the traditional association with internal audit finance and operations, enterprise risk management (ERM) offers a more precise lens for higher education executives and boards of trustees to analyze “strategic risk” as they develop long-term institutional visions and goals. Read more >

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University and college presidents and CEOs face an array of disruptive forces today as technologies, markets and customer expectations rapidly change. The institutions that are poised to thrive in uncertain times are shaking up administrative and educational models to be more relevant, differentiated and competitive. Declines in numbers of traditional students, growing numbers of prospective adult learners, competing priorities and stakeholder groups, globalization and growing dependence on private support are among the challenges of leading complex higher education institutions today. They demand enterprise-wide, market-responsive strategic solutions, reimagined academic and co-curricular programs and often organizational redesign of systems and structures. Read more >

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At a time of major change for alumni associations, there is not a one-size-fits-all solution, and there are numerous legacy issues related to traditional approaches practiced over decades. Yet in this context, alumni associations are rethinking and, in some cases, radically changing, their longstanding models for programs and services, organizational structures and relationships with their colleges and universities. Alumni needs, interests and approaches to their alma mater’s relevance to their lives are changing; at the same time, institutions are more strategically embracing the opportunities and benefits of alumni relations to engage their largest and most enduring constituency. Read more >

There is no doubt artificial intelligence (A.I.) is playing a greater role in business in a variety of sectors than ever before. “[A.I.] is not the future of the workplace, it is the present and happening now,” according to Forbes. A.I. investment also continues to grow: worldwide revenues for cognitive and A.I. systems will reach $12.5 billion in 2017 – an increase of 59.3 percent over 2016 – to more than $46 billion by 2020, predicts research firm International Data Corporation (IDC). Fifty-four percent of the business and IT executives responding to a recent PwC Digital IQ survey said their companies are making substantial A.I. investments today, with that number increasing to 63 percent in three years. Read more >

Most Agree That Education Is More Valuable Than Ever, But Dynamic Change Continues to Bring Complex Challenges

Higher education is in the spotlight this year, thanks to the presidential election’s focus on cost and affordability, and if there is one issue that thought leaders and educators can agree on, it’s the need for new thinking – especially with respect to financial and operating models. In surveys, discussion papers and reports, the complex topic of financing higher education remains central and influential in other issues from shared governance to new models of learning to data-informed decisions at all levels. Read more >

June 2016

After a few years of a “new normal” following the Great Recession, disruptive forces with evident or potential impacts on higher education are reemerging in the headlines. Certain developments, such as growth in online education or experiments with new business models, never disappeared, and these and other disruptive forces today are presenting perhaps even bigger and bolder challenges that are also connected to ongoing social and political changes.

This overview summarizes five trends and forces that might be considered “disruptive” for higher education philanthropy – (1) Millennials, (2) Brexit and 2016 US elections, (3) accelerating growth in online learning, (4) federal tax reform and (5) persistent digital transformation. Besides picking up speed and influence, what do these realities suggest about disruptive challenges facing educational leaders and fundraisers? Here are a few:

  • Don’t underestimate the Millennials – their expectations are different.
  • Disaffected people who vote might change the world, almost overnight.
  • Leaders who hold tight to legacy business models may soon be standing alone.
  • Subtle legislative and policy changes can lead to oversized results.
  • It’s still not too late to translate “lessons learned” from digital disruption in other industries to shape innovation in higher education.

Additionally, they also present several questions that educational organizations planning campaigns might consider.

Disrupter #1: The Millennials

Millennials (ages 18-34) are now the nation’s largest generation, and more racially diverse, surpassing Baby Boomers (ages 51-69) this year. And Generation X (ages 35-50) is projected to outnumber Boomers in 2028. Not only are Millennials the most numerous generation and rising to positions of influence, they are beginning to support charitable organizations in greater numbers and with larger gifts as their income increases. Millennials are powerful in other ways – over half describe themselves as political independents, and they are “digital natives,” the only generation that has not had to adapt to the new platforms (internet, mobile technology, social media) – and they are the most avid users.

Additionally Millennials are more apt to support activities or issues that align with their values. A striking case is a recent Brand World Value Index that shows that Millennials favor Toms Shoes over Nike. While Toms is a fraction of Nike’s size and the estimated value of its entire company is less than 20% of Nike’s marketing budget, Toms ranks higher when respondents were asked about brands that “represent a future I believe in” and want to help strengthen. Unlike Nike, whose purpose is to “bring inspiration and innovation to every athlete in the world,” Tom’s goal is to give shoes to the millions around the world who do not have them by matching each sale to a donation, “one for one.” And the company has expanded to providing eyesight and water linked to sales its sunglasses and coffee. Those under 35 favored Tom’s because they perceive the brand as creating world value, not just shareholder value.

Some institutions have found Millennials and other younger donors more elusive because of the higher student loan debts and tougher job markets. As they build donor pipelines for the future, the forward-looking institutions are devising new digital strategies that appeal to younger donors (such as crowdfunding) and doubling down on making the case that donations at all levels truly make a difference.

Question: “To what extent should consideration of generational differences play a role in the strategy for a new fundraising campaign?”

Disrupter #2: Disaffected and Independent Voters

The values and social habits of younger voters also are driving election politics this year. Reports following the recent Brexit vote indicated that young people in the United Kingdom overwhelmingly wanted to “Remain,” but this demographic was not sufficiently cultivated or informed about the importance of their voting. More broadly, analyses found that the better-educated a locality was, the more likely its residents were to vote to “Remain”; these results correlated with earlier surveys linking higher levels of education to understanding the pros versus the cons of “Remaining” in the European Union.

In addition to the value of education for informed decision making, parallels and lessons for the U.S. presidential race emerged; one commonly discussed theme was the critical importance of leaders’ and stakeholders’ tireless, data-driven advocacy for their causes and institutions; another was “buyer’s remorse” after false promises before the election cannot realistically be fulfilled afterwards. For fundraisers, rocky financial markets bring donor uncertainty and immense distraction, but the core of their commitment – to respond to major opportunities and challenges – remains. As Jamie Merisotis, chief executive of the Lumina Foundation, said: “Philanthropy is about change….is systemic, not episodic, proactive rather than reactive.”

Question: “What are the major opportunities and challenges in our current social and political environment that might influence our campaign planning?”

Disrupter #3: Online Learning Is Accelerating

After publishing The Innovative University five years ago, Harvard professor Clayton M. Christensen continues to describe online education as an enabling “disruptive” innovation – an activity that starts in either “low-end” or “new-market” footholds that are overlooked by incumbent institutions. As real tuition for online courses is falling, and accessibility and quality are improving, he wrote recently, online “innovators are making inroads into the mainstream market at a stunning pace.” Here’s the evidence:

  • The percentage of higher education students taking at least one distance education course in 2015 was up 3.9% over 2014. While enrollments in higher education decreased overall, enrollments in online programs continued to increase for the 13th consecutive year, and accelerated increases are predicted for the next 3-5 years. Job seekers and talent managers increasingly recognize the value of online course certificates as an alternative way to gain and demonstrate marketable skills. What’s more, the U.S. Department of Education is piloting a program to provide federal financial aid for online courses.

Traditional brick and mortar universities are increasingly embracing online education for their growth. The Lumina Foundation reports that 58% of students work while attending college and another 26% are raising children as students and their families struggle to navigate “an outdated higher education system.” The expansion of this nontraditional market potentially means redesigning campuses, with fewer buildings and traditional classrooms, as the movement from campus enrollment to distance enrollment continues. Existing space is being used more productively to handle the distance learning increase for new educational formats (such as simulations, remote labs and blended learning) without constructing new buildings.

In a related vein, the recent layoffs at the University of Chicago illustrate “a failure to adapt” with the continued building of “grand campuses that cater to the traditional student” instead of anticipating the impacts of emerging technologies. “While facilities are important, schools need to be focused on a curriculum and delivery method that [together] accommodates the new economy – and that includes older workers, international students, those seeking certification as well as traditional learners,” writes Jason Boyers, President & CEO of Cleary University, a Michigan-based business school.

Question: “How do we think about using our fundraising campaign to begin building relationships with non-traditional alumni? Because of the trends toward their increased presence – e.g., in online education – how important a role should traditional campus facilities play in the campaign?”

Disrupter #4: Tax Reform

Congressional House Republicans released their Tax Reform Plan in late June without specifics about the charitable deduction, except to say the charitable and mortgage interest deductions will be retained yet made “more effective and efficient.” Focused on economic growth, the GOP blueprint was only the beginning of a comprehensive tax reform plan to be developed. Yet, the Alliance for Charitable Reform (a project of the DC-based Philanthropy Roundtable) does not “expect all these changes to be positive. However, lower tax rates mean more money in donors’ pockets and thus more money to donate.”

Meanwhile, President Obama has tried to reduce or eliminate the charitable deduction, but so far hasn’t achieved his objectives. Meanwhile, Presidential candidates Hillary Clinton and Donald Trump said they would preserve the charitable deduction. Initially Clinton proposed capping it at 28% but later backed off, and her change of heart was applauded in a published statement by the Association of Fundraising Professionals (AFP).

It’s also unclear what will happen to President Obama’s related proposal to close the tax loophole that lets donors deduct four-fifths of the value of a gift made to a school for priority athletic seating rights. Universities who set aside the best seats for fans who are generous donors have said this change could do serious harm in both the short and longer terms. For example, gifts tied to athletic tickets are as much as three-fourths of athletic annual fund totals in some institutions – and may be targeted for such important needs as student-athlete scholarships. What’s more, analyses have shown that giving to athletics is often the first step to becoming a major donor for other broader institutional initiatives for academics, facilities and named endowments. This revenue source is higher than TV sports contracts in some universities; with the increase in televised sports games, the negative impact on institutions could be a double whammy. As a result, government relations and athletics fundraising staff continue to sharpen their “case” for preserving this tax benefit.

Question: “How important is continuity in tax policy as we consider our next campaign goal?”

Disrupter #5: Digital Revolution

Higher education can learn important lessons from two industries – newspapers and health care. Both have experience systemic upheavals deeply connected to digital disruption and have learned, in some cases belatedly, about the necessity of moving quickly and at scale.  Frederick Singer, a founder of and a tech CEO, points to several key factors in the newspaper decline of the 1990s that have similarities in higher education trends: erosion of the primary revenue source (advertising revenue), slow pace of applying real-time reader data for editorial decision making and fear of unstructured dialogue with readers. “Both industries shared huge barriers to very complex internal dynamics within the institution that made change more difficult to execute,” he wrote. “By focusing on the major threats, leveraging the power of engagement to redefine the offering and using real-time behavioral data to iterate, institutions can not only match the threat, but emerge with the opportunity to extend their mission and scope as hubs for lifelong learning.”

The experience in health care disruption has taught the importance of recognizing the signs of change early on, acting promptly and adapting to the changing environment while maintaining financial strength and maneuverability, according to two analysts. They cite six signs of disruption in health care that are relevant for universities: (1) the perceived value of the service is declining, (2) costs to purchasers are high and have been rising more rapidly than inflation, (3) government provides a significant degree of funding and is pushing back, (4) legacy organizations don’t place a premium on convenience, (5) the current business model is heavy on buildings and light on technology and (6) the ability to shift costs from one payer to another is still diminishing. “By developing a vision of the new higher education business model, and adapting to that new model while in a position of strength, universities can avoid some of the battle scars that health care organizations have experienced and transform themselves for long-term success,” write analysts Jason Sussman and Charles Kim of Kaufman Hall, a provider of strategic, capital and financial advisory services and software tools for healthcare and higher education organizations.

And Amazon, a leader in disruption, continues to forge ahead. At the end of June, the online giant announced plans to make a major foray into the education technology market for primary and secondary schools (K-12), where Apple, Google and Microsoft already compete. Its online marketplace, “Amazon Inspire,” will have tens of thousands of free lesson plans, worksheets and other instructional materials for teachers by back to school time in late August and has features similar to frequent Amazon shoppers, including a search bar, user reviews and star ratings for products. The technology market for schools is increasingly crowded – and can be expected not to stop there. Ed tech analysts said the growing market for digital education materials is likely to prove much more valuable over time than the original foothold in school computers – significantly reducing the $8.3 billion spent annually by schools (pre-K through 12th grade) – on physical textbooks, texts, professional development resources and administrative materials.

Question: “What role – if any – should the Foundation, Advancement or Development Office play in influencing our university’s strategic approaches to minimizing threats and seizing opportunities in this environment?” 



“Millennials overtake Baby Boomers as America’s largest generation,” Pew Research Center, 4/25/16.

”Nike Spends Billions on Marketing, But Millennials Still Like Toms More,” Fast Company Co-Exist, 6/23/16.

“Brexit: college-educated Brits wanted to stay. Everyone else wanted to leave,” by Libby Nelson,, 6/24/16.

“Brexit Vote Will Force Philanthropy to Tackle Many Tough Issues,” by Vikki Spruill, The Chronicle of Philanthropy, 6/27/16.

“What Is Disruptive Innovation? Twenty years after the introduction of the theory, we revisit what it does – and doesn’t explain,” by Clayton M. Christensen, Michael Raynor and Rory McDonald, Harvard Business Review, December 2015.

“Babson Study Distance Education Enrollment Growth Continues,” by Marilyn Roca Enriquez,, 5/16/2016.

“3 Online Education Trends That Will Shape How Your Hire in 2016,” by Rick Levin, CEO, Coursera,, 2/25/16

 “What Higher Education Can Learn from the Fall of the Newspapers,” by Frederick Singer,, 3/28/2016.

“Significant Forces Changing the Higher Education Market: Impact of Non-Traditional Students,”, 4/21/2016.

“Is Higher Education Suffering a Crisis of Budget, Buildings or Failure to Adapt?” by Jason Boyers, President & CEO, Cleary University,, 6/26/16.

“Can online learning lead to productivity gains through savings on campus facilities?” 11/10/13.

“House GOP Releases Tax Reform Plan,”, June 2016.

“Obama Wants to End Tax Deduction for Donations to College Athletics,” by Kristi Dosh,, 2/3/15.

“College Sports Ticket Tax Break Would Vanish in Obama Budget,”, 2/2/15.

“6 signs of disruption: What higher education can learn from healthcare,” University Business, April 2015.

“Amazon Unveils Online Education Service for Teachers,” by Natasha Singer,, 6/27/16.

February 2016

Private independent schools for elementary and secondary students have been central to the United States’ educational continuum as long as higher education has existed, but there is nothing “old school” about the environment they find themselves in today. Once identified with elite education, provided by both secular and religious organizations, models of independent education have broadened considerably at the same time that some of their once-distinctive practices are now being adopted by public schools.

Snapshots from K-12 education today suggest the independent school environment is anything but complacent and tradition-bound:

  • “Character education,” often considered the province of private schools, is now mandated or encouraged in public schools in more than 20 states.
  • Free public alternative charter schools are attracting increasing numbers of students from private schools; in the New Orleans’ suburbs, more than 10 percent of charter school students previously attended private schools.
  • A recent study warned that substantial tuition increases are putting independent education out of reach for more and more families, with tuition growth two times the growth in median family income since 1981.

Since the recession, alarms increasingly have sounded that private education is dying out, both in K-12 elementary and secondary schools and in colleges and universities, and some of the more fragile institutions have indeed closed. Today no institution, from pre-K through college is completely immune to at least some of the pressures, such as declining enrollments, unsustainable financial trajectories and competition from innovative “disrupters” such as charter schools and Massive Open Online Courses (MOOCs). As we look specifically at independent K-12 schools, it’s clear that their major challenges are similar to those experienced by their higher ed counterparts. And, like many colleges and universities, they are adopting more strategically focused planning practices that define a comprehensive roadmap for the future.

Enrollment Patterns and Increasing Competition

Overall enrollment in private schools has fallen, with nearly half losing students between 2006-2007 and 2013-2014, according to an analysis of 939 schools by the National Association of Independent Schools (NAIS). Nationally about 10 percent of students in the U.S. attend private schools; by 2021, this number is expected to drop to 9 percent. In its “Condition of Education 2015” report, the National Center for Education Statistics said the percentage of students in private pre-K to 12th grade schools dropped to 5.3 million students in 2011-2012 – well off the high of 6.3 million in 2001-2002.

A majority of the declines occurred in parochial schools, but regional economic climate and population growth clearly are factors for all school types. In the East, including New York, New Jersey and Manhattan, nearly 65 percent of independent schools are growing, and half of those schools are considered high growth; the patterns are similar in the West and Southwest. Yet the Mid-Atlantic area has more decliners than gainers, and New England, the Midwest and the Southeast show mixed results. These demographic shifts are affecting colleges and universities as well.

Conversely, charter school enrollment nationwide has grown significantly from 0.3 million in 1999-2000 to 2.3 million in 2012-2013, with the percentage of all public school students who attended charter schools rising from 0.7 percent to 4.6 percent during that period. Some states, such as Texas, have pronounced gains. Its charter school sector has continued to grow markedly since its 1996 inception to more than 500 schools, according to Stanford University’s Center for Research on Education Options. Importantly, research shows that parents who previously enrolled their children in private school were more likely to switch their children to charter schools if they felt the benefits of private school only moderately outweighed the cost of private school tuition.

Costs and Affordability

Like U.S. colleges and universities, tuition accounts for independent schools’ most significant income – upwards of 75 percent of their revenues on average. Medium tuition is up by nearly 52 percent in the past decade to $42,301 at private day schools and $50,811 at private boarding schools. Meanwhile, the NAIS reported in 2015 that total expenses in independent schools increased by 3 percent in each of the two previous years (more than double the average inflation rates) – led by technology, administrator salaries and benefits. Another driver is the tradition of small class size, which because of the higher associated costs, is now under scrutiny in some schools. Competition from charter schools, for-profits and virtual schools, along with demographic changes and the slow economic recovery, have forced a more comprehensive look at independent school balance sheets – including outsourcing, partnerships, cross-enrollment programs, shared services with other schools, satellite and international campuses and other new models.

New Educational Styles for 21st Century Learners

Classroom trends toward more personalization, interaction and learner control have arisen out of new web 2.0 and 3.0 technologies – as seen in the exploding growth of home schooling, online and blended learning and do-it-yourself YouTube videos. Accelerating this diversification away from the traditional classroom are trends in problem-based and experiential learning, internships with community businesses and nonprofit organizations and strategic partnerships – even co-location – with colleges and universities. Independent schools are well-positioned to adapt to these changes because of relatively small class sizes, freedom from state standards, close student-faculty mentoring relationships and control over what is taught.

Yet certain charter public school models (the New Tech Network in California) and private school micro-systems with lower-cost business models (Alt Schools in San Francisco) are drawing from the independent school pool with future-focused classrooms and moderately priced tuitions. The more innovative public school systems are also becoming more competitive with their no-cost option, magnet schools, project-based learning rubrics and partnerships with regional businesses to open career pathways.

Differentiation and Sustainability through Strategic Thinking

Historically the independent school sector has experienced a pattern of somewhat episodic, reluctant, volunteer-led planning exercises by boards and parents who partner with academic and administrative leadership – and in many cases, with relatively tactical and short-term outcomes. Yet boards, parents and alumni want to help shape more lasting results. An NAIS survey of 807 heads of schools and board chairs last year found that 41 percent did not think their board spent enough meeting time discussing issues of importance to the school’s long-range future and that 30 percent believed meetings tended to focus more on current concerns than preparing for the future.

Clearly new approaches are underway. As a writer for Independent School Magazine noted: “…Most independent schools have been playing defense, hoping more or less to preserve their traditions while appeasing families with a nod toward change. But there are also some courageously inventive schools rapidly breaking ground on a very different system of learning. The latter are proactive, offensive-minded – focusing on strategic thinking that leverages creative, novel, and even quirky ideas that restrengthen the alignment of their core learning values with evolving consumer demands.”

Our experience is that many independent schools are indeed thinking differently and are engaging professional strategic counsel to facilitate this work and apply best practice models and rigorous processes. The involvement and perspectives of students, parents, alumni and boards are extraordinary assets for these schools; as we have observed, their partnership with administrators and faculty unleashes high levels of energy, commitment and expertise. Participation is more personal and ground-level, and their collective engagement also builds community, momentum and buy-in.

In an environment of increased competition and changing expectations of parents and students, these planning activities are resulting in customized and well-defined value propositions, frameworks for “schools of the future,” diversified revenue streams and much more. They are developing these plans in an atmosphere of transparency and broad community engagement, as illustrated by the website for Goals for St. Mark’s IV strategic planning project at St. Mark’s School of Texas in Dallas.

And, when completed, these plans are designed to be adaptive. “While acknowledging that all plans are evolutionary, this plan will help prepare us for the opportunities that inevitably await…We are excited by the possibilities of Loyola School’s Ignatian, global, and technologically advanced future,” wrote Tony Oroszlany, president of Loyola School in Manhattan’s Upper East Side, in a preface to the school’s new strategic plan, Inspiring Greater Glory.

In these and other planning exercises, independent schools are coalescing discussions around current and emerging realities, such as:

  • Global citizenship: Research suggests that once-comfortable 20th century models must give way to different needs in the 21st century, or schools will become irrelevant. That means strengthening so-called “soft skills” (clearly a misnomer today), such as collaboration within teams and networks, critical thinking and adaptable problem solving and the ability to assess and analyze information. Students have new mindsets about technology and use it differently to learn and communicate, so expertise with technology is not a luxury but a necessity. That’s expensive and it requires retooling of classrooms, re-educating teachers and developing new ways of teaching and learning.
  • Character education: While character education has enjoyed a resurgence since the late 1990s, even in public schools, independent schools typically have led the way because of closer partnerships between families and schools, more consistency around shared values and greater flexibility to operate without political and legislative controversies over definitions, standards, assessments and policies. Gallup Polls have shown that over 90 percent of American adults support character education’s key tenets – qualities such as justice, diligence, compassion, respect and courage.
  • Access and affordability: Parents, teachers and administrators understand their students must be able to live and work successfully in a highly diverse society regardless of their economic standing or profession. Yet private school tuitions upwards of $40,000 per year in New York City and in the $20,000 range in much of the nation are cumulatively more than most families can afford even for college. One-quarter of private school students now receive financial aid versus 17 percent ten years ago, according to the NAIS. A well-rounded school community is also cited as a value so the campus culture more closely resembles the real world.
  • Financial strength and sustainability: More sophisticated and professionalized fundraising and institutional marketing strategies are increasingly evident in engaging parents (current and former) and lifelong alumni networks. Independent school endowments are growing to secure the long-term future, relationship-building through scaled down models of corporate marketing and communications and advanced data-mining software to target growth opportunities. Meanwhile, philanthropic and community partners, along with current and potential parents, are requiring assurances that their investments are well-stewarded, support sustainability and yield the outcomes promised. Working to become more inclusive and generate more income, schools are expanding the reach of their fundraising efforts, noted Sue Cunningham, president of the Council for Advancement and Support of Education (CASE), at the recent CASE-NAIS conference in New York. In this context, she added, new industry donors – from high tech, finance, venture capital and the like – are more likely than traditional donors to ask schools about return on investment.

Thinking Comprehensively – What’s Your Value Proposition?

The “why” and the “what” schools deliver are central to their success, reputation and ability to recruit students, parents, donors and community investors. Similarly, the “how” of forming and communicating strategic direction that is both adaptive and relevant to future needs of students in college, careers and adult life is essential to distinction and differentiation in a competitive marketplace.

Our experience is that well-facilitated planning processes bring out the wisdom of the closely involved stakeholder groups, while allowing leadership to drive the highest-value activities for the good of the whole. As independent schools confront 21st century realities, already the data is mounting that even high-income parents will choose public systems and charter schools committed to reinventing education. That is, unless private schools demonstrate superior performance in teacher quality, student preparation, the overall student experience, value-added engagement of the extended “campus community” and the overall return on such a significant financial investment.

Resources Cited:
“A Tougher Educational Landscape Pushes Schools to Rethink Their Budgets,” by Amanda Torres, The Independent School Magazine Blog, 1/20/2015.
“Challenged by Charters, Private and Parochial School Enrollments Fall,” Hechinger Report,” 9/2/15.
“Charter School Parents and Their Perceptions of Independent Schools,” by Amanda Torres, Independent School Magazine, Fall 2014.
“Governance Study: Effective Strategic Thinking Crucial to Strong School Performance,” by Multiple Authors, The Independent School Magazine Blog, 9/23/2015.
“The Condition of Education 2015,” National Center on Education Statistics,
“Zero-Based Strategic Thinking: Real Innovation Shifts the Focus to the Future,” by Grant Lichtman. Independent School Magazine, Spring 2014.

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September 2015

The headlines this spring and summer in higher education have captured the steady drumbeat of challenges: supporters sued to block the closing of Sweet Briar College – and after weeks of litigation won, despite questions about its future. Louisiana and Wisconsin legislatures entertained $300 million in cuts to their public university systems. Several university presidents resigned, along with other college and university chief executives announcing abrupt or early departures since the first of the year; the latest high-profile exit occurred at the University of British Columbia.

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As the dust settles, one of the immediate questions that comes to mind is: Does the seeming turmoil in U.S. higher education coalesce around a leadership crisis? To be sure, there are examples of visionary leadership. Michael Crow, president of Arizona State University and author of the new book Designing the New American University, is re-conceptualizing what he calls the “public metropolitan research university.” Chancellor Nicholas Dirks at the University of California, Berkeley, has devoted considerable thought leadership around the urgency of investment in the public research university. President Joe DiPietro at the University of Tennessee has harnessed internal constituencies and trustees, with support from the legislature, to build a new business model for public higher education in the state. Each one of these leaders brought to their new positions a broad portfolio of academic and administrative experience from complex, sophisticated public and private university enterprises and demonstrated skills in adapting to institutional realities and cultures. However, as college and university presidencies turn over in record numbers, especially as the Baby Boom generation retires, do the portfolios of new leaders taking office match the new requirements of an uncertain and increasingly complex business environment in higher education?


In the 1990s, influential business thinker John Kotter challenged long-held assumptions about the sources of power and authority, stressing that balancing both strong leadership and strong management were both vital for success. In his view, management dealt with complexity in large organizations and leadership coped with change.

More recently, in another model, two Harvard Business Review authors have proposed a “leadership capital index” to calculate the “market value” of leaders and inform investors about the readiness of a firm’s leadership to meet business challenges. This index centers on two domains – individual (the top qualities of the leader and leadership team) and organizational (systems these leaders create and apply to specific business conditions, involving such areas as culture, talent management and performance accountability). Increasingly, according to Inside Higher Education, search firms are also using personality tests and “soft skills” assessments as part of their standard offering.

Whatever the specifics of the job description, today’s university presidents must be able to lead change. The role demands broad and deep professional experience and personal traits and calls into practice their capability not only to attract competitively sought faculty and generous loyal donors, for example, but also much more. They are expected to foster and apply a leadership vision, create partnerships with business-focused boards, navigate through legal and political gauntlets of student sexual assault and faculty unions and make bold choices that promote institutional sustainability and survivability.

As the authors of Presidencies Derailed put it following a study of 50 resignations, premature retirements or firings in 2009-2010: “…[A] candidate’s curriculum vitae is a tombstone of past accomplishments, but the client is looking toward a different institution’s future…Rising rank in organizational hierarchies and a list of eminent publications do not reveal how the candidate will go about fundraising, making peace between warring factions of faculty, or dealing with drunken students and angry parents. Even a candidate who has had experience as a senior administrator has been in charge of executing policy, not creating it, and – equally important – deciding when not to create it.”

The book’s authors – Stephen Joel Trachtenberg (former president of George Washington University), E. Grady Bogue (former chancellor of Louisiana State University and interim chancellor at University of Tennessee-Chattanooga Chancellor) and public policy and administration research professor Gerald B. Kauvar – and their research associates went on to describe six causes of these first-term failures: poor interpersonal skills, inability to lead constituencies, difficulty adapting, failure to meet business objectives, ethical lapses and board shortcomings. They also pointed to the pivotal role of search firms and boards in ensuring the best hires.


Through our work with university presidents, leadership teams and boards, we have developed our own index of the framing elements for leadership success. But first, let’s look at a few case studies: Here are two composites of faltering or doomed presidencies:

  • A former dean brought a narrow view from one discipline and pre-formed ideas to the role of president of a comprehensive university and early on did not cultivate the more expansive intellectual capital within the institution. He articulated an uninspiring, generic set of priorities for a major capital campaign that disregarded comprehensive visioning and planning in anticipation of his arrival and thus demoralized faculty and staff. Meanwhile he began alienating the broader community by not immersing himself in the local culture and developing the external relationships essential for energetic regional support.
  • A president was selected by the board of a faith-based institution for his “pastoral” qualities at a time when the university was struggling to maintain enrollment traction and persuade a sufficient well of alumni that their philanthropic support was genuinely needed. The result was a continuing drama of disarray – a multi-million-dollar deficit, faculty votes of no-confidence against the senior administration, continued decline in market share – and eventually recognition that a “change in leadership” was necessary. He announced his early resignation.

Now, here’s a snapshot of two others who navigated tough terrain to guide their institutions toward change and alignment around a re-envisioned future:

  • A mid-size private university experienced declining enrollments due to shifting demographics in the region, relatively siloed curricula within multiple colleges and increasing misalignment with its business-focused board that was aggressively pushing for change. Following a program realignment initiative that alienated much of the faculty, the president convened a successful strategic planning process through which the academic community reimagined the university around current and future market opportunities while building on its distinctive strengths and brand.
  • A new president of a small private university understood that the institution’s relatively comfortable niche position and budget margins were not likely to endure long-term. In this first year, he launched a comprehensive planning process that engaged faculty, staff, students, alumni and the board to develop a sustainable path forward based on strategic budget management and strategic investments from fundraising and enrollment growth. Simultaneously the board conducted a governance review that lay the groundwork for a stronger partnership with administrative leadership. As the plan was implemented, their collaboration focused on mutual expectations as defined by a strategic plan dashboard with key performance indicators and metrics so they could assess progress annually and apply the data to adaptive implementation.


Nearly 60 percent of college and university presidents were over age 61 in a study conducted by the American Council on Education (ACE) in 2011, and the pendulum continues to swing on the issue of the best credentials for a new president. For decades the most common career path has been as chief academic officer. Then the 2008 recession led to a spate of university presidents from the business sector, with about 20 percent coming from outside the academy in the ACE study. Lately the academic pedigree has again held sway, as clashes over shared governance have threatened collaborative planning by the academy, administrators and business-focused governing boards at many institutions. One example of these conflicting perspectives is former Harvard University President Lawrence Summers, a brilliant economist and former U.S. Treasury Secretary who may have understood the finances but provoked a furor with disparaging remarks about the capabilities of women and minorities in science and engineering.

Our index for college and university presidential leadership embraces both – the academy and the business side.

  • Academically, institutional leaders must fully understand their institution’s academic mission, relate well to the faculty and move forward an academic agenda that is appropriate to unique institutional factors around its and presence in the community, region, state and beyond.
  • On the business side, presidents will be called on to design their institutions for the future. In addition to understanding the academic side, that involves understanding the enterprise, driving financial reform, managing underperforming units and programs, investing in growth areas and retooling executive teams.
  • Interpersonal resilience, often found in the rising number of student affairs administrators in candidate pools, extends to the ability to respond to crises round-the-clock, survive highly politicized situations and communicate convincingly with many audiences.
  • Externally, institutional leaders today spend much of their time raising money and building and managing multiple constituencies, from their campus stakeholders to governing boards, alumni, business and industry and, increasingly, governors and legislators. And, unlike more top-down corporate executives, university presidents must be certain when they are out front telling and selling their university’s story that they are flanked by all the constituencies essential to sustained institutional success.


Choosing the right leader is a complicated process, and the extensive list of leadership and management books supports the notion that, while there are considerable criteria for success, no one individual can embody the perfect candidate. However, we suggest that this presidential leadership index provides an outline for the deeper considerations that must be part of the presidential search process:

  1. Credible and inspiring presence as the institution’s public face. While bench strength matters, a given in the business world that is translatable to higher education is that the CEO’s reputation and ability to tell the organization’s story is the fundamental driver of corporate reputation and market value.
  2. Understanding of the academic mission and a vision for making it better. On the other hand, corporate bean-counters need not apply. The differentiating heart, soul and value proposition of higher education is its academic mission.
  3. Experience with managing complex businesses and the ability to make the case for investment. The danger is incremental growth or cutting while reeling from extreme cuts in public and research funding, demands to keep costs down, unpredictability of enrollments and much more. Meanwhile, the president is expected to generate advocacy, optimism and new revenue sources while responding to increased scrutiny by all audiences.
  4. Proven ambassador who can engage multiple constituencies around a common cause. The traditional silos are fiercely holding their ground. What avenues of strategic alignment will benefit all stakeholders? Developing the strategic matrix is not a simply a plug-and-play process.
  5. Confident partner with the governing board. As boards assume a larger role, not only do presidents and cabinets have the challenge of educating trustees who are often from the business sector about shared governance and educational mission, they also have a lot to learn from them about solid business management and continuous reputation building.
  6. A leader of people. Program review, productivity and accountability and strategic talent management are not possible without the right behaviors, a shared culture and internal champions joined in managing change and improving organizational capabilities.


Clearly one size does not fit the presidencies (or chancellors) of all colleges and universities, and becoming enamored with certain credentials without a full-on assessment directed at current and future institutional realities undercuts the potential of the larger opportunity. The lack of universal alignment around the best solution for higher education in general complicates the conversation, opening the door for controlling board factions who think they have the answers or competing agendas by vocal internal constituencies protecting their vested interests.

Search firms, which identify most of the higher education presidential search candidates today, and governing boards, who make the ultimate selections, have a tremendous responsibility to ensure a thoughtful situational analysis, priority-setting and bold assessment of what characteristics are truly needed in the new leader. Many institutions do not like to take risks in selecting leaders, so they settle on the traditional candidate, who brings a strong academic profile. That is part of the equation, but that is not enough. Risk-averse search committees also have been known to select less proven candidates in the hope that they will grow on the job and limit turnover over the longer term. Then the opposite can happen.

Looking forward, with data-driven assessments – and not simply intuition or a preference for the status quo – is critical in this era when higher education desperately needs strategic direction and imagination. Leadership is not simply about the next big gift, the next record-breaking enrollment or the next major announcement. The driving question for university presidential and chancellor searches is much more provocative: Rather than the attractive choice for near-term utility, what is the long play?

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September 2015
Resources cited:
Calculating the Market Value of Leadership, by David Ulrich and Allan Freed, Harvard Business Review, April 3, 2015.
The American College President 2012, American Council of Education, 2012.
What Leaders Really Do, by John P. Kotter, Harvard Business Review, May-June 1990.
Presidencies Derailed: Why University Leaders Fail and How to Prevent It, by Stephen Joel Trachtenberg, Gerald B. Kauvar and E. Grady Bogue, The Johns Hopkins University Press, 2013.
Presidential Personality, Inside Higher Ed, August 28, 2015


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October 2013

As dependence on tuition revenue becomes patently shaky ground on which to sustain a college or
university, the institutions taking the bold leap into new business models will be the ones realizing
greater market share, stability and growth.
More engaged boards are demanding fiscal approaches applied by successful businesses and built
around principles such as “strategic risk.” Board members often bring the experience from companies
whose market share for once-popular products has decreased or disappeared. Responding to the
concerns of parents and students, the Obama Administration and most states have launched scorecards,
metrics-based graduation completion legislation and funding policies attached to defined outcomes.
There are multiple efforts to develop less costly, more flexible paths toward degrees as individual
institutions are developing innovations in curriculum, blended and “flipped” classrooms, online
programs, enhanced student retention and other services, lower cost programs and broader external
partnerships. But the industry has yet to redefine itself, and still lacking is a convening force to engage
higher education leaders to assess the many new concepts in light of a full industry redesign.
In this churning environment, fixing higher education’s faltering business model is the new “race to the

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The trends are clear and the clock is ticking. Even prestigious institutions – those with money and long
histories – are now on the downgrade list by Moody’s and other ratings agencies. They include
Haverford College, Morehouse College, Oberlin and Wellesley, due to new signs of fiscal stress several
years after the recession. In fact, Oberlin’s outlook has changed to “negative.”
Enrollment is down in many places, which is particularly challenging for the institutions receiving more
than 90 percent of their operating revenues from tuition. A survey of college and university business
officers by Gallup and Inside Higher Ed in July found that only about 25 percent expressed strong
confidence that their institution’s financial model would remain viable over the next five years and only
13 percent over the next 10 years.1
Moody’s recent review of public universities emphasizes the “unsustainable” trend of expense growth
outpacing revenue growth.” Private nonprofit universities managed their costs somewhat better, as
governing boards and management teams held median operating margins relatively constant over the
past five years, even as revenue declined.2
Other analysts draw parallels to the antiquated financial models that drove industries such as the
newspaper business into near-oblivion. These analysts counsel against the practice of tuition discounting
– the percentage of tuition revenue handed over to financial aid – which cuts deeply into revenue to
attract students and puts institutions even farther behind.3
Others are speaking out against quick fixes,
which actually may cost more without careful considerations of longer-term strategic benefits, such as
adding programs to reposition institutions competitively or cutting programs without complete analysis
of the broader financial sphere.4
But the disturbing evidence won’t go away. Tuition rates last year were more than five times higher than
in 1985, according to a New York Times analysis.5 A survey of 436 small private colleges and
comprehensive state institutions conducted in September found that nearly half missed their
enrollment or net-tuition-revenue goals. More provocatively, at many institutions adapting to the
challenge through deliberate strategies, more than half met or exceeded their enrollment or revenue
As one university president told us recently, “We have a wonderful model for this university as a
student-centered institution, but we can’t afford it anymore. We’ve got to find a way to embed that
value in an experience students can afford.”


As institutional executive teams and boards evolve in their fiscal, strategic and generative roles, they
are rightly asking questions that businesses have addressed for years – issues such as continuous
improvement in response to consumer demand, competition in declining markets, risk management and
contingency efforts and responsibility to stakeholders. With these questions, they are introducing new
practices like Resourced Centered Management (RCM), revenue and cost modeling based on growth
goals and rigorous analysis of academic programs and faculty and staff productivity.
Consumers and higher education advocates alike agree that there is “value” on which to build. The value
of a college degree continues to grow among students, parents and employers, even amidst concerns
about student debt, graduate unemployment and curriculum relevance:
• While it may take longer to accumulate the financial benefits of a college education than in the
past, median earnings of bachelor’s degree recipients during a 40-year full-time working life are 65
percent higher than those of high school graduates, according to the most recent in a series of College
Board surveys on the topic.7

• Nearly three-quarters of respondents to a Northeastern University poll in September said a
college degree is more important than for their parents’ generation, but with an important qualifier: 62
percent said colleges were doing only a “fair” or “poor” job of preparing graduates for the work force.8
A number of new approaches are beginning to fill the void, but are not being applied widely or radically
enough within institutions. Many are so new they have not withstood the test of time; they are largely
incremental and not part of a comprehensive response. Among them are MOOCs, competency degrees,
personalized degrees, disaggregated degrees, $10K degrees and online professional certification.
In our experience, several additional business tools must become core strategies for university
management teams and boards in their dialogue about risk and solution-building:
• SWOT analyses – realistic assessments of strengths, weaknesses, opportunities and threats – but
importantly, against strategic and business objectives, not the current state.
• Growth goals – that plot the future according to defined annual targets for such activity as
enrollment, faculty productivity, endowment, fundraising, external partnerships, investment income,
full use of physical plant capacity, technology “up” time, graduation and retention rates.
• Five-year scenario planning – using these targets and threat models based on revenues and
costs, which apply corporate focus on strategic risk, to chart optimistic, realistic and pessimistic
scenarios. These might include scenarios to increase enrollment, reduce student attrition, increase
offer-to-attendance yield, lower operating costs, address tough business issues around program viability
and the impact of tenure and increase new sources of revenue through industry and other external
• Institutional health indicators – customer scorecards through dashboards and other reporting
measures that communicate this activity to legislatures, the public, faculty and staff, parents, students
and alumni and promote internal review and redirection where indicated.
• Strategy maps – that translate strategic plans into five-year adaptive roadmaps based on
“sustained shareholder value” through improved cost structures, increased asset utilization, investment
in innovation and practices re-envisioning traditional teaching and learning models, enhanced customer
value and expanded revenue sources.
Fundamental is a commitment to new thinking by leadership teams and boards to deliver institutional
sustainability. These include the tough decisions that eliminate nonperforming programs to free
investments for innovation, right-size the institution and ensure successful attainment of growth and
revenue targets.


Metrics for higher education should be directed to outcomes – not the traditional measures of incoming
class quality, test scores, number of alumni and so forth. Without the context of future aspirations and
goals, these benchmarking numbers mean very little today. The Obama administration is committed to
developing a meaningful performance scorecard based on metrics for access, affordability and student
success, and defining strategic “value” should be central to the equation. As another university
president told constituents recently, it’s not what students bring to the university but what they leave
with that is important.
Increased market share, reputation, financial sustainability and growth are the framing elements for this
revised definition of educational “prestige.” What’s most relevant to the needs of students, parents and
employers is part of this calculus: online education not only is less costly in many cases, but expectations
for technology are central to the habits of the networked generation and the non-traditional students
who are not following the residential, four-year path to degrees.
One of our clients, the University of Tennessee System, has developed a model dashboard that tallies up
several measures in one overall metric – “Impact.” This metric alone speaks volumes about the
institution’s progress and has become an important means of communicating accountability, reassessing
and redirecting strategic initiatives and creating advocacy and buy-in for public higher education in
Effective use of board expertise to enhance decision-making within accepted business frameworks and
accelerated pacing around tough decisions has given some institutions a head start in the challenge to
streamline infrastructure, eliminate barriers and provide laser-like attention to strategic risk. In addition
to developing new business models, the institutions well-served will be those that ensure they have the
most qualified boards for these challenging times.
Two important characteristics are among the requirements for sophisticated boards: (1) the
understanding of the paradigms of higher education and what and what cannot be successfully adopted
from their business worlds and (2) clarity around institutional core competencies and mission as the
issues become more complicated and time runs short. Making the most of the board-management team
partnership in colleges and universities is another critical avenue for ensuring that smart business
thinking becomes the new normal in higher education.
This is the broad context that institutional leaders, influencers and boards should bear in mind to
effectively solve these strategic business and governance decisions and achieve what we call Strategic
Results ( Now is the time to move aggressively with focus and commitment into
this uncharted future.

By RJ Valentino, President, and Janis Johnson, Senior Partner
October 2013

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1 “CFO Survey Reveals Doubts About Financial Sustainability,” Inside Higher Ed, July 12, 2013.
2 “Moody’s Report Forecasts a Gloomy Future for Public Universities,” Chronicle, ibid., August 14, 2013.
3 “Higher Education is Headed for a Shakeout, Analysts Warn,” Hechinger Report, September 3, 2013.
4 “If Enrollment Falls Short, Cutting or Adding Programs Is No Quick Fix,” Chronicle, ibid, October 18, 2013.
5 “Why Tuition Has Skyrocketed at State Schools,” Economix blogs, New York Times, March 2, 2012.
6 “Enrollment: A Moving Target for Many Colleges,” Chronicle, ibid., October 15, 2013.
7 “Education Pays 2013: The Benefits of Higher Education for Individuals and Society,” The College Board, 2013.
8 “Employers and Public Favor Graduates Who Can Communicate, Survey Finds,” Chronicle, ibid., September 18, 2013.