Over the last 12 months, I have noticed a subtle shift in the willingness of boards and senior leaders at colleges and universities to take a realistic look at core issues of cost, mission, and economic sustainability.

Interestingly, while these conversations began some years ago with examinations of extracurricular, co-curricular, and administrative issues, they are now slowing, perhaps grudgingly, turning to issues of what is taught and how. This holy grail—or third rail, depending on your point of view of higher education—has avoided careful scrutiny and thoughtful conversation for too long. 

This increasing awareness of the need to thoughtfully and realistically address these core issues in a measured yet urgent manner represents, I believe, a sea change in leadership.

Of course, discussions about what is taught and how must begin with issues of mission and vision. But even these discussions have an edge to them that has not been there in the past. We have long heard the old saw “no mission without margin,” but serious conversations about what this means for the long-term financial health of our colleges and universities is finally beginning to occur.

It is not surprising that most people are change-averse. What is compounding the problem on many campuses, however, is that a surprising number of faculty and staff do not have any real understanding of higher education finance.

Sadly, many campus leaders allowed, encouraged, and even took advantage of this financial naiveté (there is some sense, too, that many faculty and staff took refuge in it). These administrators shirked their fiduciary and ethical responsibility to keep the campus community informed. In doing so, they imperiled the very institutions they are trying to lead. Many members of the leadership team were, I believe, simply hoping to retire or move on before the day of reckoning arrived. It is no surprise that new presidents cite “I had no idea our finances were this bad” as the primary surprise of their first year in office.

Fortunately, we are finally seeing a greater commitment to numerical fluency and administrative transparency (they are two parts of the same conversation) across vast numbers of campuses. However, we have a ways to go. In December, I attended a meeting in which a senior faculty member said, “Why should I care how much it costs to educate a student?” While we may be on the path, it is clear that the road is long.

Believe it or not, I actually try to make a cogent point or two with my columns. This column, unfortunately, does not have that lofty goal. Rather, it is a compilation of “stuff” that I have seen, read, or witnessed over the past year. Perhaps there is an insight or two for you herein (or at least a smile).

• From an academic dean: “We try to avoid faculty upsetment here. We don’t want faculty to feel threatened by any idea we might have.” What? C’mon? Really?

• “Place of refuge” sign in a library at a public in Georgia. I really liked that sign. I think we all need places of refuge. Especially now. I’m an Ohio State fan. What can I say?

• From the brand book at a Pac-10 School: Turfismo. The all-too human trait of placing one’s own agenda ahead of the needs of the brand—having the temerity to consider one’s own likes and dislikes to be of greater importance than the requirements of the brand.

• D+: The highly successful creative concept for Drake University’s 2010–2011 recruiting publications.  A+: The courage of Drake’s leadership to support the concept and leverage the international visibility it earned the University. A++: The record-breaking number of campus visits, applications, increased selectivity, academic quality, and net tuition revenue Drake realized in this year’s freshman class.

• “Recombobulation area” sign in the Milwaukee airport after you pass through security. I think we all need a recombobulation area as well. Perhaps next to our places of refuge.

• “To a degree we can help.” Tentative tagline for a school in the Midwest. Not our client.

• Six books that I read, reread, or just enjoyed having on my desk:

• The Innovative University (Christensen)
• A Sense of Urgency (Kotter)
• Higher Ed, Inc. (Ruch)
• Prioritizing Academic Programs and Services (Dickeson)
• Crisis on Campus (Taylor)
• Generation Debt (Kamentz)

Interestingly, three of the books are on some aspect of educational reform. One is on creating a sense of urgency. Another is on the impact of cost and student debt. The final is on the growing impact of for-profits. The six are a real Gordian knot of concerns, options, issues, and even hope.

• Three quotes/insights/realities that will guide our future:
  • Most colleges cannot be what they have become (Dickenson)
  • No mission without margin (unknown, but widely repeated)
  • The biggest challenge of all will be to reconcile what we want to be with what we can afford

Thanks all, Bob

Those of you who have read my articles know I am a big believer in integration. During a recent project, however, a client said something that really set me thinking. “It seems to me,” she said, “that there is easy integration and hard integration.”

She went on, “It is relatively easy to integrate all the messages in the admissions office. The people there generally understand the need for good messaging and they all report to one VP. But what about integrating the messages between admissions, advancement, and student affairs? They have different temperaments, different motivations, different reporting structures, different budgets. That’s hard integration,” she said.

And then she went on. “But even that kind of integration is easy compared to integrating around a certain set of behaviors like, for example, the decision to be truly student-centric or to commit, as an institution, to adult learners. That’s hard integration.”

And then she dropped the bomb, “We like easy integration because it’s a no-brainer. At one level everyone gets it. But when you think about it, easy integration really doesn’t have that much impact. The change is hardly ever lasting. Hard integration, on the other hand, has the power to change an institution.”

Wow. The more I thought about her observation, the more convinced I was that she was dead-bang on.

Easy integration fixates on graphic identity and PMS colors.

Hard integration is less concerned with how messages look and much more concerned with what messages mean.

Easy integration focuses on integrating messages in both traditional and non-traditional channels.

Hard integration, on the other hand, is concerned not only with channels, but with what audiences are thinking, saying, and doing in response to our messages.

Easy integration recognizes the importance of what organizations say.

Hard integration recognizes the importance of what organizations do.

Hard integration is not for everyone.

It demands a worthy vision or it’s just not worth the hassle.

It requires a leader and senior team who are publicly and consistently committed to integration.

It demands courage.

But if you make that commitment as an individual and an organziation, you are unstoppable.

Photo by Dom Walton

I am routinely asked about when is the best time to conduct research. When dollars are tight but the need for insights is high, it is easy to see why this question might be on the minds of many. Here is my response.

First, conduct research when you are making million-dollar decisions. A few years ago I was asked to complete a study for a school in the East that had four regional campuses but, following a budget crisis, could afford to operate only three. Sound research provided the information needed about which campus should be closed and how to consolidate the others.

Second, conduct research when you want to test a new idea or concept. Spending a little time and money early can prevent you from making very costly and very public advertising or publication mistakes.

Third, conduct research when you sense that your marketplace or target audiences are changing. You might want to undertake research if you sense you are facing more competition for each donated dollar, struggling to recruit students, or finding that fewer and fewer people have a good idea of what you are all about.

Fourth, conduct research if you are new, are working in a new area, or have lost your perspective. Research can quickly clarify and prioritize the issues and options before you. Early in my career, a college president hired me to complete a study because he had lost faith in a senior administrator. He felt he was not being adequately informed about a specific issue and wanted to conduct research to find out what was happening.

Finally, conduct research when you cannot afford to be wrong. Research can keep you from making costly, and often very public, mistakes.

In 2005, Honda launched a hybrid version of its popular Accord. While sales of the Toyota Prius skyrocketed, sales of the Accord hybrid failed to meet expectations.

From a marketing perspective a big question is “why?”

Here’s the answer.

While the Accord hybrid technology was comparable to the Prius in many ways—and superior to the Prius in some, Honda made a fatal mistake: They wrapped all this new and innovative technology in the old, conservative skin of a Honda Accord. The only person who knew the Honda was a hybrid was the driver and the person close enough behind them at the traffic light to read the tiny hybrid decal. In other words, Honda hybrid drivers didn’t garner a lot of social cachet for their choice to go green.

Toyota took a different approach: They wrapped their new technology in a new skin—the never before seen Prius.

The uniquely-shaped Prius, designed in July 1996 by Irwin Lui of Toyota’s Design Studio in Newport Beach, California telegraphed to everyone, “Hey, I’m hip. I’m new. I’m green…and so is my owner.”

My younger brother bought an early Prius. He said the design was an important factor, “I want my neighbors to know I am green,” he said.

So what’s the moral for us? I think it is this. If you are doing something truly innovative on your campus, make sure the “package” says, “Hey, I’m new and different and better. Look at me!”

The last thing you want is to invest in something new and wrap it in something old.

The other day I was eating dinner with a client and we wandered onto the topic of how organizational culture impacts change. Based on his long experience with planning and implementation, he made a profound statement: “Culture eats change for breakfast.”

In other words, no matter how good the idea, how important the need, or how clear the crisis, if you don’t acknowledge and deal with the organizational culture, there is little likelihood that the change effort will ever gain traction.

That evening I decided to take a look at the phrase “organizational culture” on Google. Here is some of what I found: “Culture is the sum of the beliefs and values that shape norms of behavior and dictate the ways things get done.”

At first blush, this seemed pretty straightforward.

It was tempting at this point to launch into a discussion on how to change organizational culture. With this in mind, I did a search on Amazon and Google. As I surveyed the literature, however, I realized that another article on organizational change is not what is needed. Rather, I wanted to take a different direction and make three observations about my quick search.

First, I was amazed at how often this topic has been addressed over the decades. There are thousands of books, articles, blogs, video, podcasts, and discussion groups on the impact of culture on organizational change. This suggests that the issue/challenge is both pervasive and enduring. It has been around as long as people have.

Second, leaders consistently underestimate the impact organizational culture will have on change initiatives. Almost every article I read had a “if I knew then, what I know now” theme. It appears that, in our rush to affect change, we consistently do not give culture the attention it deserves.

Finally, while there are dozens of different approaches on how to impact culture, almost all authors indicated that the specific process you choose depends on the larger organization context. This makes sense. But what was really striking is that all the processes shared one common admonition: It will take much longer than you think. The need to address culture is not a one and done; it is ongoing and continual and will require much more time than you imagined.

One writer summed up everything I read when he said, “Ignoring organizational culture is like turning your back on the ocean. Sooner or later a big wave will hit you.”

Thoughts? Reactions? Let me know. Bob

I have this fantasy. I am a member of a flying squad, a group of highly trained people who travel to emergencies and quickly resolve the situation. If you are a fan of English murder mysteries (which I am), you know that most flying squads involve highly trained police: The best forensics people, the best interviewers, the crime scene investigators. Each person is highly trained, highly motivated, and given wide latitude to solve the crime and bring the malefactor to justice.

 In my fantasy, I don’t investigate crimes. Instead, I work with colleges in trouble. I lead a flying squad that includes the best CFO, the best fundraiser, the best academic dean, the best recruiter, the best student services person, and the best marketer. I serve as the president (I did say it’s a fantasy, didn’t  I?).

Our flying squad is hired by boards to swoop in and save colleges that are deep in trouble. We make the decisions. We streamline. We make the hires. We release people that need to go. We help identify new talent. We right the ship. And then we leave.

 I think academic flying squads have merit for several reasons.

 First, many of the major challenges are far too political and non-survivable for presidents, senior staff, and even board members that are interested in a long-term relationship with that school . I have often written of third-rail issues and how many senior teams avoid them because they are career killers. Flying squads are insulated from the effects of third rails. Their focus is decidedly near-term.

 Second, the flying squad is a well-honed team comprised of people who have worked together in a variety of circumstances over a number of years. They trust one another and enjoy working together.  And while they bring individual skill sets to the campus, they think and act like a team with one overarching goal: Save the school.

 Third, flying squads are loaded with talent, but it is a particular blend of talent that is one part theoretical and at least two parts experiential.  They know how to get things done and they take great pride in doing so.

 Finally, flying squads move quickly. Their goal is to identify the truly critical issues and opportunities, and then address those issues as expeditiously as possible.

 While this may be my fantasy, like most fantasies it contains at least a modicum of reality: Too many colleges are in trouble, and the standard fixes just don’t seem up to task.

The recent Moody report reminded everyone (as if they needed reminding) that much of higher education is in a financial free-fall. The report (see link http://www.nhhefa.com/documents/moodys2011OutlookforU.S.HigherEducation.pdf), which came out in January 2011, cited three primary reasons for the financial difficulty: 

• Weakened prospect for net tuition revenue growth causing market shifts favoring both lowest cost and highest reputation competitors
• Differing degrees of pressure on non-tuition revenues, placing a premium on business line diversity
• Need for strong management of operating costs, balance sheet risk, and capital plans

 In many respects, these three “bullets” seem to revolve around the same issue: Too many colleges largely deliver the same product the same way.

 The lack of compelling differentiation among colleges is staggering. Until meaningful differentiation within a competitor set is established, we can expect these pressures to increase and continue to undermine the financial integrity of higher education.

In a post to a Chronicle article on the financial condition of colleges, someone wrote, “Many years ago, before the MBA era, the perceived truth was: ‘Build a better mousetrap and the world will beat a path to your door.’”

It seems to me that colleges have three options:

1. Build a better mousetrap.
2. Lower the cost of their mousetrap.
3. Find someone, besides students, who will pay for the mousetrap.

Thoughts anyone?

Last week I was called by a headhunter who was helping a client find a new president. I get these calls a lot and they usually begin like this, “What are the four or five most important qualities we should look for?”

 I invariably tell them to look for someone who is:

• A visionary
• A leader
• A team builder
• A fundraiser

I’ve addressed most of these qualities in past, so let me be brief.

 First, a visionary. There’s been lots of stuff written about the importance of vision. Most of it really isn’t that helpful. Here’s how I define a great vision: It attracts talented faculty, staff, students, and donated dollars. While visionaries might do a lot of other things, they must attract the resources you need.

 Second, a leader. Higher education is aching for leaders who envision, inspire, and enable.

 Third, a team builder. Let me say it again: The job of the president is to build the team; the job of the team is to run the school. Great leaders with true teams are virtually unstoppable.

 Finally, a fundraiser. Some 25 years ago I took a higher ed finance class as part of my Ph.D. The professor said that tuition revenue keeps the doors open, but donated dollars are what makes a school special. She was right then; she is more right now. Great visions attract great students and great donors. And great presidents understand that they must be the chief fundraiser.

 The paragraphs above outlined four qualities you should look for. Now let’s flip the coin. Here are four characteristics you want to avoid:

• Someone who dithers
• Someone who ducks the tough decisions
• Someone who denies marketplace realities 
• Someone who spends more time worrying about the budget than the vision

That’s it in a nutshell.

 Bob

Photo By: Jim Bowen

The issue is, of course, alignment. In other words, how do today’s colleges align their vision with a declining and competitive resource base? Historically, this has not been a challenge. Colleges have either received sufficient tuition dollars, state dollars, or donated dollars to cover their expansive visions. For the foreseeable future, however, there are not enough dollars for the 3,600 colleges in America who need them.

There are two ways to look at the issue of alignment. First, reduce the vision so that it more correctly aligns with available resources. By any measure, this is a difficult task. Reducing vision is both political and painful. When clear marketplace data is available it will be less political and painful, but it will never be pain- or politics-free.

The other option is to increase your resource base. Ultimately, there are six sources of revenue:

• Tuition dollars
• Retained student dollars (retention)
• Donated dollars
• Earmarks
• Auxiliary services
• Sponsored research

Most schools are focusing just on tuition and retention dollars. A few are putting greater emphasis on fundraising. However, while these schools are interested in generating dollars from these sources, they are not always interested in making the investment they need to maintain a healthy return from these sources. There is lots of talk, but not lots of real funding.

Chances are, the path to financial viability will involve both reducing vision and expanding the resource base.

Some schools simply will not have the will that is required to make the tough decisions. Some simply hope that they can slide into retirement without having to pay the piper.

Other schools, however, will use the economic crisis to make the tough decisions. They will use market research to reduce and focus their vision, and they will conscientiously enlarge their resource base beyond traditional students and beyond traditional donors.

They will face painful decisions, but they will stay the course. They will do what is required. They will lead.