American colleges and universities have reached a tipping point in their evolution. The old business, financial and program models are insufficient. Consumers now balk at the advertised sticker prices charged. Local government, trapped by a spiral of declining revenues in a long and deep recession, challenges the nonprofit status of these institutions. Endowments – at least for a few colleges that have endowments that actually impact their bottom line – are only now approaching 2007-2008 levels. Donations are flat or at best increasing modestly except at that those institutions that have long-established pipelines in place.
Within higher education, technology has introduced an entirely new level of competition whose outcomes are not yet fully understood. Cash-strapped families find the strategy behind Coursera, Udacity and edX enormously appealing. Operating together, large well branded universities present courses in real time that are increasingly interactive. Further, they are developing more sophisticated ways of grading assignments and evaluating metrics. Significantly, many of the first courses out of the box are popular ones with name professors creating at least the impression of uniform overall quality.
Most colleges and universities lack the financial capacity and program depth to compete in this environment. They fall back on good arguments about the value of a liberal arts degree, the quality of a residential learning experience, and the opportunity the college provides for reflection and personal growth. These are good and truthful arguments but they do not account for what is coming. Translated into other terms colleges and universities must continue to differentiate themselves but they cannot fall back upon the arguments of the last century. They must build upon them using whatever resources they have available.
In the global marketplace, American colleges and universities – at least those who plan long-term strategy effectively – can no longer afford to live in a world regretfully that they wish existed.
If the challenges are real, the imagination and courage of higher education leadership and their boards of trustees must keep options open. In doing so, each party contributing to shared governance must play a responsible role. Can boards of trustees, administrators, and faculty imagine a strategy to strengthen their institution by restating the rules of competition? Is it possible that the key to a robust institution on an extraordinarily competitive playing field is to compete through collaboration?
In their recently released 2013 survey of college and university presidents, Inside Higher Education’s editors found a high number of those presidents surveyed favored program and administrative collaboration that might have been unthinkable before the recession. While there are examples already well established across America, the nature, type and prioritization of these collaborations must be addressed. How can American higher education create basic efficiencies and economies of scale in operations and programs that lower costs, address consumer concerns, answer political pundits and strengthen institutions?
A partial answer is to rethink a college’s strategic plan. If the institutional strategy looks inward to deal with very real faculty, student and staff needs and advance the status quo, institutions lacking resources put themselves at risk. In the 21st century, a good strategic plan must look both at the foundation upon which the institution is built and the environment in which it operates. In short, on which fields does the institution compete? Where in this competition can they compete better by differentiating programs, expanding options through collaboration, and combining duplicative program and administrative costs by sharing these costs with competitors? Put in other terms, can smaller colleges and universities join together to differentiate and create an economy of scale large enough to offset the financial advantages enjoyed by Research I institutions, for-profit and online ventures?
There will be critics. The arguments are obvious. Presidents, who must lead the charge, come and go too frequently. Boards of trustees lack the vision to imagine cooperating with institutions against whom they compete on the gridiron. Faculties will never buy into the concept. Colleges are unwilling to cede market as they and their competitors look for ways to differentiate and collaborate within it. Market differentiation diminishes the value of a liberal arts education by turning a college degree into workforce preparation. And finally, institutions must trust but verify or risk losing their own autonomy.
These are valid arguments. They are also unacceptable given the sweeping changes facing American higher education. For all but Research 1 institutions, the move to a global marketplace mandates a rapidly expanding number of collaborative ventures to produce new pricing structures that make sense. For the moment, it’s more typical to see a university strategic plan out of sync with its financial underpinnings. In the future, those institutions that prosper will see the intersection of recession, technology, and consumer concern for what it is – an unprecedented moment of opportunity for them.
Higher education has evolved steadily and dramatically since the founding of Harvard College in 1636 and William and Mary in 1693. It’s at a tipping point. Let’s give it a chance to grow to the next stage of evolution by using tools already in hand before we declare an unnecessary death. Indeed, may the debate be less robust than the outcome of what could be pulled off by working more closely together.