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.

Things that Keep Higher Education Leaders Awake at Night

By Dean E. Hoke Co-Founder Edu Alliance:  2017 has been a very difficult year if you are a higher education leader. With enrollment declines, changes in tax laws, and numerous articles by pundits and politicians stating higher education is out of touch with its community, no wonder you stay awake at night.  However, if you were surprised, you haven’t been paying attention.

There have been many warning signs that a change in attitude toward higher education was coming. For example, Michael McDonald of Bloomberg in early 2014 wrote an article with the headline “Small U.S. Colleges Battle Death Spiral as Enrollment Drops” in which he reviewed the Moody’s Investor Service ratings of higher education and warned of an increase of small U.S. colleges and universities who would close or merge.  Others expressed concerns, and some political candidates  (local and national) started questioning if higher education was worth the time and money. Was there a positive Return on Investment if you went for your bachelor’s degree?

iNSIDE HIGHER eD GRAPHDoug Lederman, the editor of Inside Higher Education wrote in July 2017 an article called “The Culling of Higher Ed Begins” in which he said,  “It has become trendy to predict that higher education is on the verge of a major collapse, what with enrollments falling as loan debt and rising tuition cause students and families to ask harder questions about the value of a college credential.”

In December 2017 Moody’s Investors Service revised the 2018 outlook for US higher education from stable to negative. The revised outlook is due to indicators of adverse fundamental business conditions over the next 12-18 months. “The annual change in aggregate operating revenue for four-year colleges and universities will soften to about 3.5% increase and not keep pace with expense growth, which we expect to be almost 4%,” according to Moody’s Vice President Susan E Shaffer. “Excluding academic medical centers, sector-wide revenue growth is projected to be under 3% for the outlook period.”  At least 15% of universities will be forced to cut costs in response to stagnant or weak revenue growth.

Higher education institutions depend on a number of resources to generate funds, and it is clear the new federal tax laws, will negatively affect philanthropy and some endowments. In enrollment, we are seeing a slow decline in first time full time freshmen and foreign students. On the legislative front, Congress is moving forward to reauthorize the Higher Education Act, which governs all financial aid programs. Potential changes to Pell Grants and the direct student loan program could impact higher education affordability and access, and cuts would further suppress net tuition revenue growth.

In the August 2017 public opinion poll by the Gallup organization,  people are increasingly questioning the confidence of higher education. If you have lost sleep thinking about the future of higher education, I can’t really blame you.

Gallup Poll US adults

Yet, when I talk to people in the US who do not work in the higher education field and have children in secondary school or attending college, most if not all believe higher education is worth the investment. They may complain about the tuition and future debt or worry their child may not get the job they want but they all still believe in higher education is worth the money and sacrifice for their children.  As a person who worked for years outside the US, I can guarantee you parents everywhere believe that their child earning a higher education degree is vital to their future and knows the path for a good paying job and lifestyle.

Our firm Edu Alliance, which is a boutique consultancy focusing on higher education believes everyone deserves the opportunity to get a post secondary degree.  The facts are the higher the level of education; the more likely a person will economically succeed, be a productive citizen, and make their country better.  Those in the corporate world will tell you a primary consideration in expansion is the availability of educated workers.

We believe higher education institutions need to become more aggressive in showing its importance to its community, region, and country.  We believe their needs to be a mix of institutions, big, small, private, public and even for-profit.  We also believe schools need fresh thinking in how they operate and present themselves to the public and government leaders.

In 2018 we will present our views on meeting theses challenges and path forward in the following areas:

  1. Student Recruitment
  2. Retention
  3. Finances
  4. Marketing – Branding
  5. Fund Raising
  6. Community Engagement
  7. Corporation-Community Partnerships
  8. Accreditation
  9. Staff Recruitment
  10. Legislation
  11. Governance
  12. Student Services
  13. Distance Education
  14. Educational Technology
  15. Optimization of Institutional Research
  16. Rankings and Ratings

We have asked our advisors and close colleagues to write on these areas and what they see as the challenges and possible solutions.  We hope you will join the conversation by giving us your views to each article.

Edu Alliance will become much more active in speaking at conferences, presenting workshops at higher education institutions, and writing opinion pieces for the media both in the United States and internationally.  Our co-founder partner Dr. Senthil Nathan will be at the UAE Policy Forum in Dubai, the United Arab Emirates on January 15th serving as Moderator for a Round table discussion titled “PPPs, a catalyst for reform or commercialization of a public service?” Our US partner Dr. Chet Haskell will be moderating the closing session for the Council for Higher Education Accreditation on February 1st in Washington DC, and I will be presenting at the American Association of University Administrators annual Leadership seminar in Philadelphia in early June.

If you have suggestions for subjects, we should address, or if we can be of service to your institution, please feel free to write to Edu Alliance with your thoughts.


Edu 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.

Client services

  • Developing market intelligence for the university / college in focus, studying past enrollment trends of major demographic groups of students typically enrolling in that institution to project enrollment scenarios for the next 2 to 3 years.
  • Improve student retention
  • Provide business intelligence and strategies to enhance marketability, branding, and communications
  • Improve your image and message with your local community, alumni, and government
  • Improve revenue generation including fundraising
  • Executive Recruitment of senior academic and administrative members
  • The US and international accreditation assistance
  • Workshops with key and leading staff to brainstorm and develop strategies to assist internal team in specific subject
  • Institutional Task Force audit team to determine state of institution, strengths, and weakness and next steps
  • Specific issues as identified by the institution and design a go forward plan with implementation steps
  • Improve your institution’s Internationalization plans

Contact: Dean E. Hoke 502-257-1063