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Staying Ahead of the Educational Curve

Four ways mission-driven institutions can succeed
University Business, October 2012

Earlier this year in March, college and university presidents convened in Washington for an annual meeting to discuss the state of education. I was a panelist for a session entitled “Staying Ahead of the Curve: Rethinking the Higher Education Model.” While I don’t believe that the days of the traditional educational model are over, that model is on life support for most of us.

The only exceptions are institutions that have billion-dollar endowments and only accept 10 percent of applicants. That is where the traditional business model will sustain itself. But there are fewer than 100 such institutions, meaning that the rest of us—the other 3,900 or so colleges and universities—have outdated business models.

It’s not hard to see, just by looking at recent numbers on traditional students issued by Moody’s. Discount rates increased last year, yet roughly half of all institutions reported either flat or declining enrollments.

There are big challenges in higher education and none of them can be solved easily. College presidents and senior administrators constantly wrestle with issues related to access, affordability, achievement, accountability with diminishing government support, and, of course, the necessity of doing more with less.

Institutions of higher learning need to adapt to a changing marketplace and a much more diverse student population. They, however, should not abandon their core mission or eschew their institutional values to fill the seats. Below are four ways mission-driven institutions can succeed in these turbulent times.

1. Understand the demographics.

The Western Interstate Commission for Higher Education (WICHE) has published data showing a 15 percent decline in Caucasian high school graduates in the next decade, a 9.5 percent decline in African American high school graduates, a 62.5 percent increase in Hispanics and a 51.5 percent increase in Asian Americans. Hispanic public high school grads will be double the number of African Americans and will be half the number of Caucasians. What are you doing about it? These students are not ethnically homogeneous and are not, in some ways, like their white or black counterparts.

Back in 2007, St. Leo University (Fla.) commissioned a strategic initiative to prepare our institution for the explosive growth of Hispanic high school graduates. This included everything from having bilingual financial aid and admissions officers to hiring a more diverse staff and offering more diverse activities. This strategic action committee did a great deal of research that led to improvements that now contribute to our vision of growth. With this research, Saint Leo has grown its Hispanic and Latino population to twice the size it was before we commissioned the initial plan.

2. Make sure strategic plans have strategy.

Most strategic plans don’t live up to their name. Instead, they are wish lists of what an institution hopes to accomplish. In today’s economic times, this will no longer do. As someone who spent 16 years teaching strategic planning to college and university executives at the Snowmass Institute in Colorado, I’ve read hundreds of strategic plans and almost all of them lacked strategy or priorities.

Strategic plans are really about strategic priorities and execution. Most private colleges and universities and, increasingly, many public universities, must pursue a growth strategy to generate more income. Schools want to increase enrollments to grow revenue from additional students with only modest tuition increases. For many smaller colleges without large budgets, growth is an imperative. How do you grow? What steps must you take as an institution to achieve this growth?

3. Accelerate a strategy with technology.

This can be done through lead scoring, a system that allows an institution to rank prospective students in terms of probability of enrolling. A 2011 EDU survey showed that 8.3 percent of respondents considered lead scoring for admissions “extremely valuable,” and 22.5 percent of respondents found it “valuable.” That means nearly 70 percent of respondents don’t believe lead scoring is valuable or important. I would argue that lead scoring is essential and even vital to the mission. It allows institutions to put data they already have to work to be more cost effective and productive.

Without the use of lead scoring, our cost of recruiting and enrolling students would be substantially higher. Also, it is very likely that our growth would have been constrained because we would be spending more time on the wrong prospects resulting in lower yields.

Through lead scoring, about a year ago, we were able to statistically identify roughly 100,000 traditional undergraduate student inquiries with very low probability of enrolling—less than one percent. At $2.50 per contact, it costs us $250,000 to reach them. With lead scoring, we were able to make the decision to save that $250,000 and use that elsewhere. Now our admissions counselors can spend their time working with far better prospects. As such, over the past three years, the freshman class size increased 26.2 percent and GPAs and SAT test scores have gone up as well.

4. Develop the organization’s sophistication and accountability.

It is crucial for top administration to develop as strategic leaders and managers, master the technological tools required for success, and develop superior accountability for execution in their organizations.

Colleges and universities, like any businesses, will get themselves into trouble when decisions are made based on intuition instead of research. Banks don’t open new branches based on intuition. McDonald’s doesn’t select where it should sell Big Macs based on a gut feeling. There is extensive research that is done and these firms do this with incredible market sophistication.

These days, there’s no excuse not to do market research. Years ago, data was much harder to gather, but today, much of it is available in the public domain. Too few colleges are taking advantage of this, and thus they frequently make poor and expensive decisions.

Developing sophistication requires some investment. And an investment means that colleges and universities need to make X a higher priority than Y. Leadership fails when it acquiesces to passionate lobbying or the most adamant voices. It fails when decisions buy short-term peace in the academy and neglect long-term return on investment.

An example from my campus is that we found room scheduling was almost a nightmare. Office assistants were spending hours of their day trying to track down the availability of rooms on campus. We purchased a program and automated the process, saving us thousands of man-hours each year subsequently reducing our staff’s consumption of acetaminophen. We have hired another programmer just to do these “value added” projects.

The programming hire wasn’t sexy, but it made it possible for faculty, staff, and administrators to be more productive and handle the many administrative details more efficiently. It saves us time and money. And that money eventually goes into improving the education of our students through better technology and more full-time faculty. Since 2008, we’ve increased our full-time faculty by 49 percent. 

With the right strategy, accountability, and sophistication, any college or university can weather any storm.

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