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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. Read more >

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. Read more >

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. Read more >

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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
top.”

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THE HARSH TRUTH

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
goals.6
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.”

BUSINESS TOOLS FOR MANAGEMENT TEAMS AND BOARDS

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
partnerships.
• 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.

OUTCOMES, NOT INPUTS

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
Tennessee.
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 (www.napagroup.com). 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.

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The new academic year launches against the backdrop of clashes and compromises between state legislatures and public universities in recent months, much of it about money and educational policy. While some states provided short-term relief to struggling public institutions because of unanticipated tax revenues, in most cases the longer-term solutions about the big issues were left unresolved. Some examples:

  • Texas Rick Perry announced he would not seek a fourth term after ten years of pitched controversies over the role of research, teaching, the regents, access, accountability, metrics and overall quality in higher education in his state. What’s been happening in Texas essentially is a template for the issues in other states.
  • Newly elected North Carolina Pat McCrory, whose state has developed a premier university system, declared that an “educational elite” supports “worthless courses” in the liberal arts that don’t lead to jobs and threatened to withhold tax funding.
  • In Florida, Rick Scott lobbied university leaders one-by-one to cut tuition rates, bypassing boards of trustees who have the authority.
  • Iowa, Minnesota, Montana, Washington and Nebraska are among the states where universities have agreed to hold off tuition increases if lawmakers give them more California Gov. Jerry Brown signed a budget bill that includes a 5 percent increase for public universities as part of a four- year plan to boost state funding by 20 percent while freezing tuition.

While the picture varied across the nation, linking state funding and college costs was a consistent theme, yet sharp strokes of fiscal pens alone will not produce the comprehensive reform necessary for the 21st century, and they are detrimental to efforts to recoup educational and economic advantage for the U.S. A better model would be for political, government, business and community leaders to convene in data-informed environment and address the real issues. This critical first step could refocus the conversation on the “value” of college and university assets and how to grow them. Then legislators and educators can use those standards to determine the ROI of their investments – and their collaboration for constructive change.

VALUE PROPOSITION #1 – AN EDUCATION FOR LIFE

Increasingly a bachelor’s degree is a prerequisite to employers, who are looking for the best qualified workers for entry-level positions. What’s more, according to a Chronicle of Higher Education Special Report, new graduates applying for jobs often do not have the analytical, communication, research and problem-solving skills necessary to succeed in today’s workplace and thus to continually improve their quality of life.

In a survey of 318 private and nonprofit sector executives this year, 93 percent of respondents agreed that “a candidate’s demonstrated capacity to think critically, communicate clearly and solve complex problems is more important than their undergraduate major.” In this report by the American   Association of Colleges and Universities, about 75 percent of employers surveyed also stated that they would advise their own children to pursue a liberal arts degree that teaches broad-based knowledge and critical thinking skills. While there are other well-rounded paths to an undergraduate degree through business, science and engineering, liberal arts has always had a practical dimension directed at employability and cultural literacy, or the skills, knowledge and humanistic awareness needed for its times.

Not only will graduates in today’s global society likely have several jobs and careers, technology is constantly shifting how things work. New York Times’ columnist Thomas L. Friedman contends that graduates need to be “innovation-ready.” The value-added of a higher education is that graduates have the ability to learn and assess information and acquire new knowledge when they need it. Institutions that are strengthening the fundamentals of their liberal arts and core curricula are, in fact, responding to market demand.

VALUE PROPOSITION #2 – EDUCATION WHERE YOU WANT IT AND WHEN YOU WANT IT

If nothing else, MOOC-mania has stirred up a healthy debate over creative and pragmatic alternatives to traditional classrooms in traditional bricks-and-mortar institutions as the favored path to a diploma.

Rapidly diversifying learning technologies (iPADs, mobile and more) and preferences of students are forcing academic and administrative resisters out of their comfort zones. The future is taking shape around course redesign in a variety of disciplines, incentivizing faculty to change, rapid growth in new models such as game-based learning for a new generation of learners and self-paced learning that improves performance and speeds the time to degree.

Accelerated three-year degrees and the “$10,000 degree” movement in states like Texas, Florida and Ohio have engaged academics and legislators, though not necessarily in collaboration, to come up with the next best thing. Retention is at the top of legislative lists since almost half of students in two- and four-year institutions currently fail to complete their degrees in six years. Since Tennessee kicked off the idea in 2010, many states have now tied public university funding to degree completion and other metrics that guide funding formulas.

In addition to college costs, a significant motivator for these efforts has been the rise of the “non- traditional” or what some call the “post-traditional” learner. Data show that the “traditional” 18- to 22- year-old full-time undergraduate student residing on campus represents little more than 15 percent of the higher education population in the United States. New statistics data from the U.S. Department of Education reveal that while enrollment of students 18-24 increased 52 percent between 1996 and 2010, the group will grow only 10 percent between 2010 and 2021. Conversely, students who are 25-34 years old will increase by 20 percent and those 35 and over by 25 percent.

This diverse group of post-traditional learners includes adults who want to complete or advance their degrees, part-time students who work and part-time students with families, among others, but they all have one feature in common: they are rarely opting for a four-year campus residential experience.

Serving this growing population of students is upending both educational delivery models and approaches to “student success.”

VALUE PROPOSITION #3 – A GLOBALLY COMPETITIVE U.S. THROUGH RESEARCH AND ECONOMIC DEVELOPMENT

The previous trends add up to dangerous consequences for the United States and our overall quality of life and well-being. Failing to produce enough educated graduates with the right knowledge and skills means that our businesses and industries will lack the talent they need to maintain or innovate – and to provide even more jobs. A McKinsey Global Institute analysis in 2011 predicted a shortage of up to 1.5 million workers with bachelor’s degrees or higher in 2020.

Coupled with this scenario, declines in state funding threaten the ability of major public research universities to produce premier research that is vital to a competitive U.S. economy and the well-being of society. In 2012, the National Science Foundation reported a 20 percent decline in per-student funding for the nation’s 101 major public research universities between 2002 and 2010, with 10 states; 10 states had decreases ranging from 30 to as high as 48 percent.

Former Oklahoma Gov. and U.S. Senator David Boren, now the president of the University of Oklahoma, knows the issues well from both sides of the aisle as an elected official and a university administrator. In an editorial in the Tulsa World in April, Boren argued that “most Americans have barely noticed a trend that gravely threatens our future.” With “almost no public debate,” he charged, “our budget decisions are causing the dismantling of our system of public higher education,” which has undergirded U.S. economic growth and strength since World War II. “In only a decade we have dropped from first place in the world to 12th place in the percentage of our young people going on to college.”

Another state has accepted this challenge in a significant way to advance its self-interests, providing a model that others might consider. Gov. Dannel P. Malloy signed “Next Generation Connecticut” into law in June to begin revitalizing the state’s economy through unprecedented investments in STEM research and education at the University of Connecticut. A $1.5 billion construction component will invest in new scientific laboratories, advanced equipment, new classrooms and housing; another $137 million in operating funds will hire hundreds of faculty and expand the student body in STEM fields – in response to the bioscience, engineering, digital media and technology jobs that are revitalizing the state’s economy. The governor sponsored the bill, which was endorsed by more than 100 businesses and received overwhelming bipartisan support in the General Assembly.

VALUE PROPOSITION #4 – FOSTERING NEW DIALOGUE BETWEEN POLITICIANS AND EDUCATORS

The very value proposition of higher education is being challenged – so we propose that politicians and educators become far more collaborative in developing solutions instead of butting heads. This could start with politicians investing more time in learning about the mission and opportunities of their colleges and universities, not grandstanding on headline-making proposals that dilute both energy and constructive debates.

“Creating a New Compact Between States and Public Higher Education,” which was released in late June by a task force of the American Association of State Colleges and Universities, is a positive response to the turbulence of the past few years. The blue-ribbon panel, which focused on “making public higher education a state priority,” urged lawmakers and public higher education leaders to form a new alliance on accountability, finances and affordability.

As critical first steps, they emphasized that university leaders must “address public higher education’s change-averse reputation, especially as it involves online and other alternative educational delivery models,” and that both sides “develop a shared understanding of critical higher education priorities in their state.”

By contrast, the “Next Generation Connecticut” legislation passed and signed in June may be the first to show what’s possible when government, business and higher education collaborate with the end in mind. Construction investments of $1.5 billion will bring scientific laboratories, advanced equipment, new classrooms and housing; another $137 million in operating funds will hire hundreds of faculty and expand the student body in STEM fields – in response to the bioscience, engineering, digital media and technology jobs that are revitalizing the state’s economy. Gov. Dannel P. Malloy sponsored the bill, which was endorsed by more than 100 businesses and received overwhelming bipartisan support in the General Assembly.

It’s reasonable for lawmakers and politicians to hold public institutions to tenets that guide private enterprise – a commitment to innovation, market-driven outcomes and effective and efficient operations. The good news is that there are signs of change, but a surer path toward reform would be the collaboration of politicians, university executives, business and community leaders and philanthropists to develop a new “master plan” for public higher education. Through their leadership they would demonstrate commitment to real results and restore their constituents’ confidence in the value of one of the nation’s greatest assets – attainable higher education.

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

It’s unquestionable that few industries in the United States have achieved global leadership as consistently as and effectively as our higher education system, the cornerstone of our economic prosperity and a vital part of the American dream. Yet during the last few years, we’ve heard much about change in higher education, from disruptive change to resourced-centered management to program allocations based on ROI, and the message is clear and consistent: universities are not changing enough fast enough.

Since the financial meltdown in 2008 when boards were invited into leadership and, in some cases, management roles to rescue their institutions from financial disasters, boards have wielded increasing influence around business models, margins and pacing. Until recently, much of this activity has been informed by experts like Richard Chait and formed around best practices. Yet many university presidents have been signaling that “enough is enough” and it’s time to rebalance the engagement.

As is often the case in business, the most aggressive moves have some of the most lucrative payoffs and position a system to act on change relatively quickly. In publicly traded institutions 90 days is a lifetime in defining the heroes and those who fall from grace, often with sizable parachutes. This practice among business-minded university boards has put a sharper lens on the question of balance. Acknowledging that universities benefit from business and operating models that incorporate solid business thinking, the debates center on this question – just how far can for-profit thinking, practices and behaviors extend into and survive in universities built on the traditions of shared governance, tenure and reverence for process?

UVA AS A BELLWETHER CASE

Earlier this summer, the tumult at the University of Virginia put this issue in the headlines and in an instant, UVA became a bellwether of the tensions arising in many institutions wrestling with the complex issues of leadership and governance and the more difficult challenges of change in a shared     governance system. Impatient over the pace and degree of change, a small group within the Board of Visitors engineered President Teresa Sullivan’s resignation without full and substantive board discussion or vote. Although best practice suggests a gradual evolution of fiduciary, strategic and generative engagements between institutional administrative leadership and boards, this self-appointed group took this incendiary step in a style more familiar in for-profit boardrooms.

There is no question that it’s a new day and a new world in higher education. The threats have not been eliminated, the solutions needed are more “disruptive” and the timelines more urgent. The issues of market differentiation, financial liquidity, rising debt and the costs of innovations in entrenched learning environments are driving this impatience. Yet it’s vital that leadership teams and boards work together, and not in open warfare, to determine the best outcomes for their institutions and the right balance for their relationships.

As we’ve seen at UVA and elsewhere, the leadership-board tensions become distractions that remove the focus on the job at hand. The challenge that lies before boards is to learn more about and fully grasp the core business of education, to understand what’s relevant against the broader needs of society and, with this knowledge, to exercise their roles in asking the tough questions and in assuring that institutional change is bold and aggressive, not mild and incremental.

Just as boards need to understand the educational models, as they would in assessing any business venture or investment, it’s critical that university administrators and members of the academy become better informed about the realities of their fading business and educational models and embrace their roles as leaders and pioneers in developing new paradigms. The beauty of such board-university leader relationships is the tension that emanates from constructive, but tough, conversations in which the content and questions are rich and the outcomes transformative. Ultimately success lies in conducting the business of education in an environment of shared governance honoring these rules of engagement and in the best interest of the institution.

SHIFTING PARADIGMS

Education beyond high school creates the bridge to a higher quality of life – bringing graduates greater opportunities for jobs and careers, personal satisfaction, impact on their communities and ability to give back to their universities. For society and the nation, the collective yields are economic growth and sustenance.

Students and families are seeking a college education that is affordable, efficiently delivered and directed toward careers of the future. National and state leaders are setting targets for increased U.S. competitiveness as measured by level of education and workforce capabilities. Yet investment in U.S. education is decreasing as states – severely constrained by lower tax revenues and other economic pressures – have cut back support for public higher education to 25-year lows and private universities rely more heavily on endowment, tuition and investment income. As new reports substantiate unsustainable financial models for many institutions, Moody’s recently noted that financial pressures are “making it difficult for colleges and universities to grow revenue and are intensifying the focus on governance, operating efficiency and revenue diversity.” Bain and Company in its recent article, “The Financially Sustainable University,” says that one-third of colleges and universities have financial statements that are significantly weaker than they were several years ago due to higher education inflation and soaring administrative costs and as debt and interest rates outpace their instruction- related expenses.3

Multiple forces with substantial consequences for university planning are reshaping the relationships between governing boards and university leadership teams. Chief among them:

  • Changing demographics and the cost of higher education versus the perceived value. It’s no longer good enough to suggest that an institution is “mission driven, yet influenced by the ” It will be important to make a definitive stand.
  • Increasing tuition dependency, with net tuition revenue unlikely to return given economic Boards will be looking for thoughtful, but aggressive multi-year enrollment plans that provide contingency plans to ensure predictable, multi-year revenue streams.
  • Growing competition for students – applications rise, yields fall; for-profits win on flexibility, not Developing a differentiated position and brand in an increasingly competitive market is essential to sustainability and success.
  • Scrutiny of program subsidies and decisions about internal resource allocations. Such discussions often focus on academic quality and faculty productivity and performance.
  • Continued concerns about administrative efficiency. Chief budget officers control 20 percent of the costs while the academy controls 80 percent, which also fuels the growing drumbeat on faculty
  • The unfunded mandate of hybrid education. What are the real costs and benefits of increased technology and online programs

THE MODEL: SHARED GOVERNANCE

Higher education’s long tradition of shared governance among boards, administrators and faculty in university decision making was comprehensively articulated in the “Statement on Government of Colleges and Universities” by the American Association of University Professors (AAUP), American Council on Education (ACE) and the Association of Governing Boards of Universities and Colleges in the mid-1960s. This position paper stands on the principle that the welfare of the institution must be at the forefront, and interdependence through constant communication and shared responsibilities results in an “increased capacity to solve educational problems.”4

Yet most trustees and faculty learn about shared governance “on the job,” according to an AGB survey of more than 335 independent and 80 public colleges and universities.5 As tensions among boards, faculty and presidents mount, solutions recommended by the AGB include improved faculty and trustee orientation to each other’s responsibilities for governance, familiarity by all groups with the institution’s practices and policies for governance, more higher education expertise on boards and the president as the “nexus of communication.”

The “governance as leadership” model posited by Richard P. Chait, William P. Ryan And Barbara E. Taylor underscores the new style of “generative thinking” in which boards, along with executives, frame problems and make sense of ambiguous situations to shape strategies, plans and decisions. Such an approach governs at the boundary, requires new types of talent on the board, demands that trustees explore multiple and sometimes conflicting views and focuses on the values of the past and the demands of the future.6 Not at anytime during their discussions and writings about this model do they suggest sustained public battles between the board and their institutions as the means to accelerating the development of new solutions.

Our experience is that value-centric and mission-centric comprehensive planning that also responds to market forces is not only possible but increasingly proven in the “disruptive” thinking now pervasive in higher education today. Governing boards will be crucial to guiding these changed futures. For example, in June, in response to legislative and administrative mandates focusing on the quality of the state’s workforce, the University of Tennessee System Administration, led by its new president, Dr. Joe  DiPietro, completed a strategic planning process in which the board was involved at strategic points throughout the process. Joining hundreds of the university’s stakeholders, from faculty and students to alumni and local communities, the plan defined how the university system will leverage its comprehensive portfolio to enhance Tennessee’s economy through the quality of its educated workforce and citizens.

NEW APPROACHES FOR NEW TIMES

The unilateral action of the UVA board leadership in the President Sullivan case was a case study on the damage that occurs when this balance gets off track. The cracks in the UVA community’s trust likely will be evident much longer than the explosion itself. At a two-day retreat in August, the Board of Visitors began to reframe the narrative by engaging in forward-looking discussions about its structure, governance and strategic leadership. While President Sullivan did shape the new member orientation about the university’s core values, academic organization and current challenges, the spotlight will remain on Virginia as the board and university leadership address the critical issues ahead.

Higher education in the U.S. is in trouble and requires boldness and imagination, not sidestepping tough decisions nor a reaction of duck-and-cover. The faltering economy and the challenges around the globe demand comprehensive solutions from our colleges and universities, not distracting pot shots. Now that tough issues are publicly on the table, navigating through the governance tensions in an environment of healthy creative conflict could transform our institutions positively in ways still unimagined because boards – bringing crisp business thinking – and university leadership teams – schooled around the mission – have much to learn from each other.

To do so, however, the desired governance model should engage university boards and leadership in determining the accelerated process and timing for their own institutions and how best to cultivate and bring along their many constituencies on this path forward. Successfully partnering in shared governance will drive the development and implementation of actionable, bold innovations and address head-on the issues of cost while positioning institutions for their targets for student success.

This approach honors the engagement of faculty leadership and the faculty community in informed dialogue around the curriculum, program integration and the realities of the “business.” It paves the way for the critical decisions cited by Bain – developing a clear strategy focused on the core, reducing administrative costs, freeing up capital in non-core assets and investing strategically in innovative models.7 And, importantly, it facilitates difficult conversations about diversified revenue generation and cost management, especially in a tuition-driven model.

Despite the rocky terrain of recent years, the potential for the new story for postsecondary education revolves around a balanced partnership of the core business owners – the university leadership and the board – not one commanding the other. Although some tension is inevitable, and desired, the ongoing benefits of the endgame are alignment and support in the best interests of the institution – and a return to the tough discussions required to develop a sustainable, compelling case for higher education.

By RJ Valentino

September 2012

 

 

 

 

 

  1. Alumni association advocacy programs harness alumni support for the university’s federal and state legislative Alumni lend value to these efforts by making the university more visible to elected officials in their districts and by informed communication with elected officials about issues that impact the university and its budget. It is a common practice for alumni association staff to collaborate with their university government relations offices, which typically report to the university president or senior leadership in external relations. In the most active programs, the alumni associations build upon the email and letter activity from the government relations office, participate in state capital visits and educate public officials through annual forums to increase the “octane” of their efforts.
  2. Alumni associations are partnering with university government relations offices to ensure that the messages and activities of volunteer advocates are consistent with their institution’s overall policy Links on both government relations and alumni association websites cross-reference each other so that advocates can navigate effectively to get the information they need.
  3. High-profile annual presentations for alumni advocates feature university presidents, governors and other leaders within the university and federal or state These events often take place in prestigious buildings on campus, in the state capital and in Washington, D.C. Engaging well- known individuals and using venues with symbolic value help make the events more publicity friendly and create a sense of momentum and shared purpose. Alumni advocates are also encouraged to host legislators in their own communities and to spread the word locally among friends, families and service organizations about the university’s benefits to their state.
  4. Other annual forums featuring university faculty in academic buildings or research centers allow the university to mine its own resources and demonstrate them to alumni and public Showcasing faculty expertise and the utility of a new building or research center simultaneously justify the state’s expenditures and educate alumni advocates to strengthen their case on behalf of the university.
  5. In the most energetic programs, alumni association and government relations websites are information-rich. Providing data about the number and quality of contacts by alumni advocates also builds a sense of momentum and success. Reports, e-newsletter archives, photos, volunteer sign-up forms and archives of photos featuring key administrators with legislators indicate an energetic advocacy program. In election years links to candidates’ campaign websites and details of their positions on key education issues provide volunteers with helpful shortcuts to use in their advocacy role. For example, in one program, the association’s board of directors interviewed two gubernatorial candidates and posted the Q&A results on the association’s website, representing a special level of engagement.