Presidential Leadership and Crisis Management within Institutions at Risk

Steven JonesBy Dr. Stephen JonesPresident/CEO of Great Blue Heron in Madison, Alabama and a member of the Edu Alliance Advisory Council.

What gives me license to write about presidential leadership, crisis management, and universities at risk? First, an unorthodox entry to higher education administration – 12 years in the paper and allied products manufacturing industry right out of a bachelor’s degree. A mid-30s hard-drive to a PhD with a wife and two kids, at a level of personal and professional maturity far beyond most much-younger, still green graduate students. Nine years advancing through the faculty ranks and tenure at Penn State. Reporting directly to the president at three subsequent universities, and then serving as president at four universities. I have always thought of myself as an industrial forester who just happened to stumble into higher education administration. I have held tightly to the belief that universities are businesses, albeit not-for-profit. Neither the Fortune 500 company I served or any of the nine universities that issued me a paycheck could spend money it did not have.

My most recent CEO gig gave me a very special perspective. As a six-month, time-certain Interim President, I had to leap into the deep end, assess the context, evaluate the team, compare actual to potential, and make near-immediate adjustments (major and minor) to bridge the gap to permanent leadership. The Board asked me to pave the way for an exemplary president who could hit the ground at full speed, with most of the obstacles, potholes, and road debris already addressed. I repeated the refrain often that my preceding six positions had given me ample opportunity to make most of the mistakes available for learning. The definition of experience – that thing you get right after you needed it! I came to the Interim Presidency with a great deal of hard-won experience.

Assessing University Status, Risks, and Potential

I will speak from my aggregate experience, both as a CEO and on senior administrative teams. I’ve cloaked the identity of individual universities. We’ve all seen the criteria signaling financial risk. The more boxes checked, the greater the vulnerability:

  • Rural location
  • Poorly endowed
  • Non- or weakly-selective admissions
  • Excessive deferred maintenance
  • Significant debt
  • High discount rate
  • Declining enrollment/revenue
  • Weak alumni base and tepid annual giving

Closer inspection might reveal other serious problems that reach beyond risk to imminent peril:

  • High Accounts Receivable
  • Composite Financial Index already in the Zone or below
  • Successive years of budget cutting and mid-year expenditure reductions
  • Insistence upon saving as the way to prosperity
  • Satisfaction with adequate
  • Poor retention and low graduation rate
  • Uninspired leadership – both Board and administration
  • Absence of passion and purpose
  • No clear brand, identity, distinction, or reputation

My Ecosystem Approach — As a forester and doctoral-trained applied ecologist, I view universities the same way I might any organism in a natural ecosystem. My doctoral research evaluated soil-site productivity. That is, the potential for a given set of conditions to produce biomass and forest products and services. Often, the actual forest in place may express past treatments and poor management, and not be truly reflective of the potential. I used independent measures of soil, slope, fertility, topography, and other objective metrics to assess potential. If a great site is supporting a poorly performing stand, then investments in rehabilitation could return dividends. If the site is poor, no investment will return dividends. The same is true for universities.

Is a particular university worth attempting salvage and rehabilitation? Is the site (the collective factors constituting potential) such that a new approach, refreshed leadership, and rededicated efforts can right it? Is it time to cut losses and abandon the institution? Not every university at risk can be saved. Not every Board can rise above itself. Some CEOs cannot lead even a healthy institution. Some leaders cannot ask the right questions, much less answer them.

A university with which I am familiar brought on a new president two months after it had added a million dollars in long term debt just to meet operating expenses on a $15 million annual budget. It had just opened a new residence hall, named after a Board member who donated a sum equal to just four percent of the total project cost. Its endowment was a mere $2 million. Deferred maintenance costs were excessive. For example, brick spalled from the south side of the gymnasium. Enrollment sagged. The discount rate exceeded 55 percent. The Board held the unenviable reputation as the most inept of all institutions in the state. The Board repeatedly refused to approve entrepreneurial ventures… efforts that might have lifted the university to a recovery ramp. This institution stood at the abyss. Salvageable? Not with that Board. With a new Board and outlook? Perhaps.

I know of another university, well maintained with solid potential, exciting programs (existing and envisioned), competent faculty, and manageable debt. Yet, the administration had a fatalistic attitude. That is, believing that decreasing state funding and weak high school graduation demographics led to an inevitable spiral of lessening enrollment, revenue, staffing, etc. Satisfaction with adequate, suppression of ambition, and acceptance of mediocrity destined the institution to a slow, inexorable decline. Instead, new leadership ascertained what stood within reach, awakened the institution to its potential… stirred the Board, administration, faculty, staff, alumni, and its broad community to rise far above what had been accepted as inevitable.

The university (in my metaphor, the forest) flourished under innovative, challenging, and inspired leadership. Rich soil on a wonderful site nourished recovery and response. All the ingredients were in place. A systematic assessment, innovative ventures, strategic programmatic investments, organizational realignment, critical senior-level adjustments, and an infusion of passion, power, and purpose into a decent Board set the university afire.

Failing, or even falling short of potential performance, constitutes a crisis. Better to anticipate and address the situation proactively. In the first example, the hole had already grown too deep. The second, far too close for comfort, yet still in time for decisive, firm, and strategic action.

Look, See, Feel, and Act

I have embraced four essential verbs as critical to dealing with any enterprise, whether a multi-million-dollar university or a family. First, I implore those involved in leadership roles to Look – to focus with eyes open, and attentive to the world around us. I’ve seen many people open their eyes, however, without actually seeing. We are too often blinded by the distractions of life and our digital environs. I implore folks to See… to pay attention with senses alert to multiple dimensions. To see deeply, through layers of the visual… beyond and beneath the surficial. Looking and seeing alone do not suffice. We must see deeply enough to evoke Feeling. Feeling, emoting, and striking empathy for the organization and the cause sufficient to spur Action. Without action, looking, seeing, and feeling accomplish nothing. The first institution operated blindly for far too long. Fresh eyes, sharpened with deep experience, brought insight, offered remedies, and urged action in time to lift the second university to new heights.

University leadership must be fully attuned to the environment… the ecosystem within which the institution operates. Look, see, and feel to a level sufficient to assess whether action investments can be fruitful. Effectively operating any enterprise demands a business-like approach. Again, a university is a business, albeit not-for-profit. Operating requires revenue. Over some timeframe, revenue must exceed or equal expenditures. Although a noble cause, higher education still must abide by the rules that dictate business – you cannot spend money you don’t have. And like a forest, an education enterprise cannot grow to be The Mighty Oak on shallow, impoverished soil on an exposed upper slope. Site resources are too limiting. Nature, nor business, allows the impossible and even the best of sites will not produce The Mighty Oak with inadequate management practices.

Because I still operate with my industry orientation to action, I have observed with frustration that universities approach decisions with tendency to “ready, aim, aim, aim, aim….” The opportunity window too often closes without decisive action. I prefer “ready, fire, aim,” then, if necessary, tune the aim. Act before inaction assures failure. A dear fisheries biologist friend once said to me, “Steve, there is only one way to guarantee you will catch no fish. Don’t throw a line in the water.” The first example university avoided fishing. The second, with counsel, fresh looking and seeing, and urging, decided to throw a fish fry!

Dr. Jones article “Presidential Leadership and Crisis Management within Institutions at Risk” is a part of a series called: Things That Keep Higher Education Leaders Awake at Night. Edu Alliance thanks Steve as well as our Partners, Advisors and Friends for their valuable contributions and insights.

cropped-edu-alliance-logo-square.jpgEdu Alliance is a higher education consultancy firm with offices in the United States and the United Arab Emirates. The founders and its advisory members have assisted higher education institutions on a variety of projects, and many have held senior positions in higher education in the United States and internationally.

Our specific mission is to assist universities, colleges and educational institutions to develop capacity and enhance their effectiveness.

Navigating the Maelstrom: 8 Tips for Enrollment Managers

Kent Barnds for web 1 copyBy W. Kent Barnds Executive Vice President for External Relations – Advancement -Communication – Enrollment – Planning Augustana College

In Sebastian Junger’s novel, The Perfect Storm, later made into a movie by the same name, three phenomenal storms collide in the North Atlantic into a massive disturbance. The perfect storm was unlike anything that meteorologists and others had seen; there was no way to predict what would ultimately occur, even with the finest technology and equipment. However, as the storms started to converge, the magnitude became clearer and clearer. Everyone watching knew that the storm would have catastrophic power and disastrous effects.

Something similar to the perfect storm is on the horizon within this world of higher education, and no one will feel the effects more directly than those who serve in enrollment management. While the gathering storm is unlikely to play out in the pages of a novel or on the big screen, it will have a significant impact on the higher education landscape for years to come.

Six major threats seem as though they may hit simultaneously. So, what are these threats?

Ratings agency downgrade of the whole sector—In early December of 2017, Moody’s downgraded the outlook for higher education from stable to negative. In large part Moody’s downgrade is directly related to a perception that expenses within the higher education sector will grow much faster than revenue. Moody’s also cites the uncertainty in federal and state financial aid policy, which is discussed later on. The significance of a ratings downgrade, while not relevant to all colleges and universities, is a sober assessment of the challenges ahead for higher education.

Demographic shifts—Much has been written about the significant demographic shifts in the United States. They are here and will have long-term impact. Not only does the number of 18-year-olds decline, but when they begin to stabilize the students in the pipeline are very different than those traditionally served by higher education. These demographic shifts will require colleges to make dramatic changes to be more accessible, inclusive and supportive.

Federal and state financial aid policy uncertainty—Not a single public policy watcher can predict what will happen in Washington D.C. or in state houses across the country. The Republican tax bill certainly signaled a new day for higher education with several measures that directly target higher ed. Danielle Douglas-Gabriel of The Washington Post does an excellent job highlighting several things to watch in the coming year, including the Senate’s higher education bill, borrower defense and gainful employment, Pell Grant funding, state investment in higher education, and Public Service loan forgiveness. The federal and state financial aid uncertainty will continue to disrupt things for higher education for some time to come. Sadly, students and families suffer from the uncertainty.

The loss of confidence of the public—A recent article, “University Presidents: We’ve been blindsided,” in Politico interviewed several college presidents about the public’s loss of confidence in higher education. This is a must-read for anyone interested in the state of higher ed. There is no question that higher ed’s reputation has taken a hit in recent years. High cost, perceived liberal bias, lazy rivers, alleged elitism, climbing walls and, even big-time athletics have all contributed. In the article from Politico, author Benjamin Wermund includes the following passage: Rice University president David Leebron put it this way:

“If you go back 15 years, I think universities were held — not where the military is, but pretty much just below that. Now, we’ve fallen a lot. I think it’s a very challenging time where we can’t just go out in the world and say, ‘We’re an esteemed institution’ and people will credit what we’re saying.”

This change in public perception about the value and role of college and universities is not something that can be turned around overnight.

Competing priorities—Ratings agencies, who want 3%+ revenue growth, and public policy makers, who want greater access to higher education at a lower cost, are in direct conflict; many in higher ed are paralyzed by the competing priorities. The conflict comes into focus as colleges with a large number of Pell students tend to be those institutions that are unable to grow revenue at the rate that ratings agencies and boards want, but are nonetheless important players in creating new opportunities for traditionally underserved populations across our country. At the same time, the wealthiest institutions, which can easily achieve the desired revenue targets, seem to lag behind many institutions in serving Pell Grant recipients and first-generation students. Again, Politico has one of the best reviews of this phenomenon in its feature about the University of Michigan’s prestige and its current difficulty attracting students who fulfill their traditional mission. I recall that when I interviewed for the job I currently hold at Augustana, the president who hired me told me he wanted to “raise the ACT average by 3 points, increase student of color representation from 9% to 15% and increase enrollment from 2,200 to 2,500.” I told him that if he wanted to do that simultaneously, I was not his guy. I told him that these were competing priorities and that we needed to make choices. Today, though, the choice of revenue growth versus access at a lower cost is not as easy and there seem to be more interested parties that ever before.

Pressure on ability and willingness to pay for higher education—Public policy makers, political candidates, and many others using the rhetoric about “free college” or alternative methods of paying for college have impacted willingness to pay in an unprecedented way. In addition, higher ed continues to see a trend in which the most affluent families are sending their children to public colleges because of cost. Willingness to pay what colleges ask is precarious. Further complicating this is the fact that for many college-bound students there simply are not sufficient resources to pay what colleges ask. The social contract of more affluent families paying what was expected to help underwrite the cost for those who truly can’t simply doesn’t exist in what Robert Reich might refer to as “The Age of the Terrific Deal.” When everyone wants a bargain, it’s mighty difficult to get people to pay what’s needed to cover what it costs to maintain excellence.

Each of these conditions in higher ed’s perfect storm impact everyone associated with higher education, but perhaps no one will feel the effects as much as those in enrollment management, given their responsibility to get and keep butts in seats and dollars in coffers. Inside Higher Ed’s annual survey of admissions professionals, which include enrollment management types, highlights the many contemporary pressures faced by enrollment leaders.

We can’t make a bunch of new 18-year-olds over night. We can’t just wait for the mid-term elections hoping that a change of political parties in charge of the House or Senate might change everything. We can’t just ignore all of these conditions, either. But, seriously, what’s an enrollment professional supposed to do, given the environment within higher education today?

In my view, successful enrollment professionals will do the following:

Mind your institution’s mission—In difficult times it’s too easy to stray from your institution’s mission by adding academic or extra-curricular programs that don’t really fit. As an enrollment professional, you must resist the temptation of those programs that don’t fit or won’t fill. Recently, I spoke with a colleague whose institution was exploring the addition of some graduate programs, which for this institution makes sense. But the programs under discussion don’t make sense to me—they won’t fill and they won’t attract new students. New programs need to be directly related to institutional mission. As an enrollment professional, guard that mission; it will pay off over the long haul. Are you minding the mission in your daily efforts to combat the challenges?

Look internationally—The press and the trends suggest that international students are no longer coming to the United States. There is still room to grow, but we might have to think about it in a different way. Perhaps we won’t be able to rely exclusively on full-paying international students. Maybe we need to offer some financial aid to attract the right mix of available students. Maybe we will need to offer the same level of financial aid we’d have offered to those students who are disappearing because of demographic shifts. At my institution, we’ve looked to international students to replace a portion of students we believe we won’t enroll any longer because of demographic trends. Are you open to new models of international student recruitment?

Focus on retention—Persistence and graduation rates are more important than ever before. However, we are going to need to take a much more sophisticated look at retention and go well beyond the traditional indicators, like test scores and high school performance. We will need to look at what the data reveals critically and with an open mind. When my institution took a dip in retention, we discovered that we were losing all of the wrong students, according to traditional trends. We were losing qualified, high-achieving students. We sliced and diced the data and in the end discovered that the most likely reason was related to levels of unmet financial need. Be prepared to make hard decisions when you focus on retention. Where can you make the greatest difference? It’s often in places that are not popular to speak of out loud. Are you focusing on the right things in your focus on retention?

Expand your sphere of influence—To be effective as an enrollment professional, one has to be involved beyond admissions and financial aid policy and practice. An expansion of influence results in more opportunities to educate members of your community about the challenge faced by your institution. There is no perfect model for enrollment management, but a model that includes only admissions and financial aid is probably not perfect. How far does your sphere of influence extend?

Try lots of little stuff (and fail fast)—Enrollment professionals will need to be serial entrepreneurs to be successful. It’s time to throw everything at these challenges. Too frequently, enrollment professionals, and higher ed folks in general, allow perfect to be the enemy of good. There is no time for a silver bullet. We need to test, try, and evaluate every potential idea. We also need to be open to killing what doesn’t work. Are you trying little stuff to test what works and what doesn’t, or are you seeking the big solution?

Invest in staff, training and professional development—There is no greater risk to an institution’s recruitment program than constant turnover and leadership transition. Now that the recruitment cycle is 18–24 months, turnover kills. Recruitment and enrollment work is still a relationship business. Institutions need to do more to retain enrollment professionals. More needs to be invested in professional development and compensation. And, by all means, if you have an effective and imaginative enrollment leader, do everything possible to get him or her to stay. Are you investing enough, or are you relying on the old (and failing) model, paying admissions officers nothing until they burn out, and blaming the enrollment professional for institutional shortcomings?

Make it manageable—The challenges are daunting, but it’s critical to resist becoming overwhelmed. My current boss, President Steve Bahls, has challenged us in difficult times to make things manageable. I recall, following the Great Recession, his challenge to the community to come up with “five buckets” that would replace 100 students who might be lost because of the economic downturn. The five buckets divided the problem and made it manageable. We added men’s and women’s lacrosse, majors in graphic design and multi-media journalism, increased our focus on transfer recruitment, and completed the renovation of a student center, which enabled us to build community in a new and different way. In the end, the five buckets produced students and we were able to maintain enrollment. Are you making the challenges you face manageable?

Keep asking the big (and difficult) questions—Enrollment professionals are not always great at pushing the big questions in an effort to both educate and clarify expectations. For me, it’s been the question of revenue and student count. I’ve been asking what’s most important for years: Student count? Student mix? Net revenue per student? Discount rate? Overall net revenue? My experience reveals that all of these matter, some more on some days, but what is most important? And will institutional leadership provide the flexibility to an enrollment professional to get there? The answer to the question for me right now is total net revenue. It’s helpful to know that and I do have to remind people from time to time. Are you asking the big question for your institution?

The years ahead will be challenging. But they also have the potential to be very exciting for those enrollment professionals who are seeing the big picture: making a difference in the lives of young people and sustaining the college or university where they work.

Note: Kent Barnds article “Navigating the Maelstrom: 8 Tips for Enrollment Managers” is a part of a series called: Things That Keep Higher Education Leaders Awake at Night. Edu Alliance thanks to Kent as well as our Partners, Advisors and Friends for their valuable contributions and insights.

cropped-edu-alliance-logo-square.jpgEdu Alliance is a higher education consultancy firm with offices in the United States and the United Arab Emirates. The founders and its advisory members have assisted higher education institutions on a variety of projects, and many have held senior positions in higher education in the United States and internationally.

Our specific mission is to assist universities, colleges and educational institutions to develop capacity and enhance their effectiveness.