Why Transformational Change is So Rare

I have had significant visibility into hundreds of organizations over my career, both as a leader and as an external partner. In just the last year, I’ve had access to dozens of entities as they work their way through what, for many of them, is the greatest set of challenges they have ever faced. Even when it appears fairly obvious that traditional solutions will be inadequate for what, in many situations, are existential challenges, very few organizations have committed to transformative solutions. Why is that?

First of all, very few executive leaders or even leadership teams have the bandwidth or ability to run the daily operation, manage through disruption, and build for the future all at the same time, let alone build for a transformed future. It just demands more than most leaders have ever done or experienced. On the other hand, there are many recent examples of leaders who have managed to implement very effective, short-term responses to crisis, while keeping some form of the legacy business operating. Unfortunately, many of those solutions, as effective as they are, have a very short shelf-life and are primarily transactions to solve an immediate problem. They are rarely transformative in nature.

Moreover, in many cases, particularly in higher education, institutions misunderstand what their challenges actually are. Because they are structurally built and have been refined over centuries to preserve the status quo, rather than to engage in transformative change, they perceive their challenges—and solutions—to be within the framework of what’s always been. For example, many institutions see their declining enrollment as a problem with marketing or admissions or pricing, rather than the fact that the value proposition for a growing number of students is not compelling enough and/or the ROI is so dubious, that many potential customers are choosing other providers—including those outside of higher education. Even if a school figures that out, they are highly unlikely to question the role that credit bearing courses and degrees play in the disconnect between what they do and what the market needs. Some things are just off limits–either overtly or covertly.

Similarly, because the supply and demand ratio has fundamentally shifted in higher education the same way of doing things simply won’t work. In order to grow or even preserve enrollment, most traditional colleges and universities must behave as retailers, taking market share from other institutions in the short term and generating greater demand in the longer term. For now, there is simply not enough demand for the current supply. And the COVID pandemic has exacerbated an already exacerbated an existing ten-year decline in enrollment and revenue.

In short, a majority of colleges and universities must re-evaluate even the most basic and long standing elements of what they do such as delivering content over academic terms, credit-bearing courses, grades, degrees, faculty control of curriculum, tuition as the primary revenue model, credit transfer policies, accreditation as an imprimatur of “quality,” the “one and done” relationship with graduates, and a host of other examples. In this context, it becomes clear that most institutions cannot solve their problems with status quo solutions. It’s also clear that doing the kinds of things enumerated above is miles outside of the typical college or university comfort zone!

To be fair, there are also many elements of the transformational change process that are just really, really difficult. Because it’s so rare, most organizations have little or no core competency in what is a really complex process and they likely have a culture that mitigates against change as well! That’s a tough leadership challenge!

Some additional reasons that reinvention is so uncommon include:

  • It requires people to go against their natural tendencies.
  • It requires a level of transparency, honesty, and compromise foreign to most organizations.
  • It requires a level of leadership commitment that most leaders have not experienced.
  • It takes a longer-term commitment than most of organizations are used to.
  • It’s high risk (although no higher than continuing to operate under the status quo!)

Fortunately, at Idea Pathway and the Transformation Collaborative™ we have led multiple organizations through transformative change. We are able to support institutions who are up to the very hard work of reinvention using a proven process. For a select few who have the resources and exclusivity, transformation is a choice. For most, it is required in order to survive through the current challenges and thrive into the next normal. If you’d like to learn more about the state of your own institution, please fill out the form here and we’ll get back to you soon! Alternatively, you can email us at wkp@wallacekpond.com or call 719-344-8195.

The Future of Career Education

The Future of Career Education is the “Editor’s Choice” article in the February issue of the Career Education Review. Thanks to CER for publishing this article!

Exerpt:

Unfortunately, there is no way around some critical, structural challenges currently affecting higher education in general and career education in particular.

For example, as an industry, higher ed has been in decline for a decade – and that was before the COVID pandemic – which has caused the single worst year-over-year enrollment decline of the last ten years.

Career colleges were hit hardest, early in the decline, with private nonprofits and community colleges now suffering substantial contraction. Between the late 2000s and 2018, for-profit institutions lost over one million students. Between that time and fall, 2020, traditional, nonprofit institutions have seen declines in excess of two million enrollments. Fortunately, however, 2020 saw 4% enrollment increases for four-year proprietary institutions, primarily in online programs.

In short, institutions that find a way to offer shorter, cheaper, high quality programs and credentials that lead directly to good employment opportunities, will be in high demand over the next several years as we work our way out of an economic depression and transition to the next normal in post-secondary education. The fortunate reality is that the need for post-secondary skills based and professional training is growing; it just isn’t going to be through credit-bearing degree programs, which means that in order for career colleges to survive and thrive, they will have to reinvent much of what they do.

Click here to see the full article.

4 Effective Self-Care Strategies That Entrepreneurs Can Use To Relieve Stress ASAP

(Photo credit: Pexels)

By Amy Collett from Bizwell.org

As an entrepreneur, it can feel as though there are no hours left in the day for proper self-care. Between managing your workload, fielding client inquiries, attracting new clients, and everything else, work can quickly become all-consuming. However, to be the best in your field, something has to give. Giving yourself the permission to take adequate breaks to care for your well-being and mental health is essential. In fact, feeling less stressed on a daily basis can boost your mood and creativity, which can help take your business to new heights.

Delegate and outsource as much as possible

Perhaps one of the most powerful self-care strategies that any entrepreneur can use is to delegate and outsource as much as possible. This move can directly and indirectly eliminate stress. By taking tasks off of your plate (especially those you do not find enjoyable), you’ll not only feel the relief of not having to perform them, but you’ll have more time to practice self-care.

If you are someone who feels like you need to do it all, you don’t. No entrepreneur can take on everything and realistically expect to succeed. There just aren’t enough hours in the day. Wise leaders are empowered with the ability to admit when they need help, and then ask for it.

Start by examining the day-to-day activities of your business to see where you can begin delegating/outsourcing. Common services to outsource include virtual assistant tasks, graphic design, bookkeeping, and social media management. You can also consider outsourcing tasks in your personal life. From cleaning to grocery delivery, you can literally add hours back into your weekly schedule.

Start practicing mindfulness

Research has shown that mindfulness is extraordinarily beneficial in a number of ways. By focusing on being present in each moment — without judgement of the experience — you can relieve stress, lower your blood pressure, enhance the quality of your sleep, and boost your resilience. 

To get started, take anywhere from 5 to 10 minutes per day to complete a mindfulness meditation. These can be found on popular mindfulness apps. Whether at home or in the office, you can immediately reduce your stress levels, and improve your health over the long-term.

Make changes to the structure of your business

Although it sounds a bit unusual, making changes to the structure of your business can ultimately help you relieve stress.

If you’ve been worried about how much liability you personally have with your company, there is a quick and easy way to solve this concern: form an LLC. Not only can forming an LLC be good for business, but it can also relieve stress as well, as you’ll have limited liability, tax advantages, less paperwork, and increased flexibility. This one move could save you countless hours of worrying, and significantly improve your overall well-being.

If you do choose to pursue the formation of an LLC, you can avoid hefty lawyer fees by filing yourself — or by using a formation service. Because each state has different regulations around forming an LLC, check the rules in your state before moving ahead.

Support your mental health

Above and beyond anything else, be an advocate for your mental health. Whether you face anxiety, depression, or any other mental health condition, your business cannot grow if you do not take care of yourself first. Making therapy appointments, going to the doctor to get medication, and taking time for yourself are never signs of weakness. Instead, exceptional leaders aren’t afraid to admit that they are human, and that they need care to thrive.

Although it can be a challenge, scheduling regular self-care into your day is of the utmost importance for your health — and for the health of your business. It is only when you feel your best that you’ll be able to perform at your peak.

Why a Trillion Dollar Post-Secondary Education Ecosystem Often Fails to Deliver

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If you’ve been alive for at least a couple of decades, you’ve very likely participated in some element of education and training that typically comes after high school or a GED.

Post-Secondary education is a very large, very complex ecosystem, of which “higher education” is only one part. In fact, based on “enrollments” industry trains far more people each year than go to college. They do this with internal programs as well as programs contracted through external providers. There is also a growing B2student market based on non-credit, non-degree programs that typically result in some sort of industry recognized credential. Although it is impossible to quantify the entirety of the industry delivered, B2B, government, and B2student post-secondary education, combined with higher education, in the U.S. it exceeds a trillion dollars and growing. As a point of reference, companies like Walmart, Amazon, and Google each easily spend a billion dollars a year on education and training programs, both internal and contracted. You can see more here, but the short version is that even though higher education (credit bearing, degree granting institutions) was a $670B business before COVID, it has been in decline for a decade, while other elements of the ecosystem are growing.

Despite a trillion dollars in spending, the results of formal education and training are very uneven and often present a negative ROI. How is this possible?

First, higher education, broadly speaking, is not built, structurally or functionally, to deliver what students, employers, and society actually need now. While this has been the case for decades, in the face of accelerating change, volatile employment markets, and diminishing shelf-life of educational content, the traditional, degree-based higher education model is simply incapable of delivering the learning experience (or often the ROI) that the current reality demands. For example, even if a first-year student is lucky enough to enroll in a “new” program, the development and approval process for that program likely took one to three years in a traditional college. Even if our freshman completes the program in four years, by the time he or she graduates, the content they learned in their first year is at least 5 to 7 years old. In most cases, such a student would also have experienced curricular and pedagogical models that are centuries old. Of course, there are exceptions, and in some institutions, students engage in field and industry-based learning, are content creators themselves, learn in highly collaborative settings, and are assessed in authentic ways. However, that is very rare. But even in those cases, considering the fact that the average employment tenure in the U.S. was only 4.1 years (before COVID!), a college degree would have to support about 15 different professional roles over a typical career.

Relatedly, industry, when it does invest in training, almost always does so from a transactional, “I want this employee to do that thing,” perspective, rather than thinking about education and training from a human capital development perspective. Even soft skills training tends to be focused on solving discreet employee “deficits” as identified by the employer. Workforce development in general is also primarily transactional, with typically narrow, skills-based training, which is often effective for supporting low-end, entry level employment, but it usually does little for personal and professional growth that transfers across multiple contexts.

As a result, the entire post-secondary ecosystem mostly reflects incomplete, fragmented, and disconnected islands, each with its own generally short term, transactional goals. There are certainly examples of educational programs that develop highly fungible skills such as coding boot camps or certain clinical health programs, etc., as well as a few very unique degree-based higher education programs that genuinely transform students, but in general, the post-secondary education ecosystem as a whole either delivers stale (and expensive) degree programs via an ancient and inflexible pedagogical model or highly discreet skills training with limited transferability. A trillion dollars should buy a lot more!

So, what’s the answer?

What we really need is an ecosystem in which there is a unifying theme such as “human growth” or “human development” that empowers learners to effectively engage things such as change, ambiguity, complexity, other people, and life-long learning, with highly transferable skills development in areas such as change and crisis management, communications, adaptability, auto-didactic learning, teamwork, conflict resolution, creative problem solving, etc. And these objectives can exist across the entire ecosystem despite very different learning environments, providers, outcomes, etc. They can be embedded in everything from degree programs to boot camps as appropriate for the specific learning context, and they would support essentially all hard skills training as well. Imagine a cloud computing or blockchain or sales expert who is also skilled in change management and conflict resolution! A business analyst skilled in teamwork would produce far more accurate and valuable analytics as a result of working closely and effectively with business partners and other stakeholders. And maybe most important of all, a shared commitment to human development across the ecosystem would produce holistic, balanced people who are enthusiastic about and capable of solving big problems, while making the world a better place.

This new way of looking at post-secondary education is of particular importance now since the recession of 2008 and the pandemic have conspired to fundamentally change how people work. The 2008 recession pushed over fifty million people into the gig economy and the pandemic will permanently erase millions more jobs that survived the earlier recession, mostly in office support, hospitality, travel, and even manufacturing as companies shift to automation rather than rehiring workers. In November, Bill Gates predicted that half of business travel and 30% of office work will never come back. Moreover, recent research by Pew, found that two thirds of those currently unemployed by the pandemic are considering changing jobs and careers. So, not only will almost all of us have to continually learn new skills for the rest of our lives, we will also have to learn to manage constant changes in how, where, and with whom we work as well. There are many examples, but just think about the shift in office visits to telehealth caused by the pandemic. Depending on the type of practice, many clinics and hospitals will go from nearly zero telehealth visits before the pandemic to potentially 50% or more even after the pandemic is over. That will devastate businesses and employees dependent on people physically showing up such as orderlies, cafeterias, coffee shops, gift shops, parking concessions, etc.

In short, while the role of post-secondary education has always been predominantly about employment, even in traditional colleges and universities, the volatility of the workplace has never been greater, the average tenure never shorter, and the need to prepare people to navigate change more critical than it is now. Building unifying themes into the post-secondary ecosystem that actually support human growth rather than just isolated skills, are not only necessary for the continued viability of employees, but of society itself.

The COVID Pandemic Has Accelerated a Lot of Trends—One is the Mid-Life Professional Crisis

Image credit: Entrepreneur

In the work I do now, I engage with a lot of people and organizations in transition—many of whom frankly did not expect to be in transition a year ago. In some cases, people have found themselves out of work, often after decades of steady employment. In other cases, they are still employed, but find themselves in organizations in the middle of existential crisis and upheaval. A commonality in both situations is that a lot of folks suddenly find themselves face to face with some very complicated feelings about where they’ve been, where they are, and where they’re going.

For people who’ve lost jobs, the first reaction is usually, “I need to get another job.” But in most cases, that is followed by, something along the lines of, “I’ve made a lot of compromises and sacrifices over the years that, in retrospect, didn’t work out that great for me, and I’m tired of working myself silly for other peoples’ agendas, equity, goals (fill in the blank).” What’s also quite common is the extent to which people, decades into their careers, realize that they’ve also spent a lot of time in environments and with people whose values don’t align with their own. It can be very painful to realize that a lot of our hard work, although well-intentioned, was ultimately for things that don’t matter that much in the long run and that certainly didn’t nurture us along the way.

And the long-term psychic price for that can be really, really high, even devastating. Many of us have dedicated entire careers to a traditional definition of professionalism which is based on utterly unsustainable and even irrational things like working to exhaustion, never saying no, being “busy” at all costs, and focusing more on performance metrics or status than on human relationships.

As I work with both people and organizations in transition, one of the shifts I’ve made in my own approach is to ask some very probing questions about the extent to which they just want to get back in the saddle with what they’ve always done vs. the extent to which, as individuals, they see the current situation as an opportunity to change how they actually live their lives and contribute to something bigger than themselves, and as organizations, the extent to which they are willing to think transformationally rather than just getting through the current crisis. The number of people and organizations that are suddenly thinking about purpose, making a positive difference, wellbeing, transformation, etc. is dramatically different than it was even a year ago. As it relates to individuals in transition, and often distress, the psychic and spiritual dissonance runs pretty deep.

I’m a recovering executive and educator myself who gratefully came face to face with a life-changing crisis that forced me to reevaluate and reprioritize what really matters—not what we’re socialized to believe matters—but what, at the end of the very last day, we would like to be the basis of our own legacy. As hard as it is to lose a job or wake up one day and realize that you’ve given the best of yourself to something that didn’t fulfill you or make a meaningful difference in the world, crisis can clarify the thinking and provide a sense of liberation that frees us to make choices and revisit priorities that we generally don’t do while chugging along in the status quo.

So, what important takeaways am I seeing?

First, as brutal as 2020 and the pandemic have been, there are some silver linings. I see many people who’ve found empathy and compassion, for themselves and others. I’ve seen people and organizations forced to a place in which significant, even transformative change is possible in ways it wasn’t before. And I’ve been personally inspired by people who’ve made profound choices (and sacrifices) to rearrange their lives, prioritizing time and relationships over money and status; trusting their gut, embracing risk, and becoming entrepreneurs, doing what they want to do, for themselves and others. Some folks are changing careers and taking “lower” positions than previously held, even for less, and sometimes much less money, in return for sane work schedules, time, a sense of purpose, doing what they enjoy, and other reasons that free them from the dissonance of their previous jobs.

Second, there are a lot of people out there for whom 2020 has caused deep challenges, financially, emotionally, professionally, etc. Many find themselves in the most vulnerable and fragile place in their lives, often, tragically not understanding how common their plight is and how many other people are in the same place. As with the absurd traditional definition of professionalism that has hurt many people (and the organizations they work in), many of us have also bought into the equally absurd and dangerous notion that vulnerability is weakness, that regardless of what challenges we’re facing, we’re just supposed to “buck up” and push through it. I think the breadth and depth of the overwhelming challenges of the last year has lessened the stigma around mental health and asking for help, which may be another silver lining.

The good news is that for folks who find themselves questioning some of their previous professional choices, whether or not they’re currently in transition, the many years and often decades of previous work still provide tremendous experience and insights. Regardless of whether or not we were dedicated to “things that matter” or benefitted from an alignment in values, that prior experience provides judgment and skills and perspective that can support whatever we do going forward as employees, leaders, entrepreneurs, etc. As for organizations, many are still stuck in old, transactional, short term ways of thinking, but there is an analogue with individuals which is that crisis has provided permission to do things that were believed to be impossible even a year ago. And in unique cases, there are organizations that have the required leadership to support running daily operations, managing through disruption, and building the future, all simultaneously. It is those kinds of organizations that I strive to work with!

What I’m Learning from the Work I’m Doing Now

After more than 30 years working in traditional organizational roles from classroom teacher to university and corporate CEO in the U.S. and internationally, I have gratefully come to understand that it is, in fact, possible to make values-based work and career decisions that nurture ourselves while making a positive difference for others.

In my own case, helped along by a fairly significant life crisis, my primary motivation is for people who associate with me to be better off because of that association and that the world be a better place as a result of my efforts.

Over my career, there are many examples in which my work created meaningful benefit for others, particularly as it related to underserved students, but it is only recently that I have consciously and purposely based my career choices on the extent to which those choices nurture me and make a positive difference for others. I am also working with many people in the same transitional place. Such a change requires compromises and even some courage, not only because leaving what we know involves risk, but because we’ve all been powerfully socialized to accept traditional definitions of professionalism and success that keep us from following our hearts.

If you are one of the many, many people who suddenly find themselves face to face with some very complicated feelings about where you’ve been, where you are, and where you’re going, reach out and let’s chat. If you’re ready to let go of the false bargains that have held you back so far, it really is possible for your work to support your values, your health and what matters to you personally.

Higher Education on the Brink: How the Fear of Change Threatens the Future and What Colleges Can Do about It

By Michael Bills, Ph.D. and Wallace K. Pond, Ph.D. Copyright, 2020

An abridged version of this article is available at the Chronicle of Higher Education.

The Pre-Pandemic State of Higher Education

A great deal has been written the past several years predicting the demise of large numbers of US colleges and universities. Most notably, the late Harvard Business School professor and management guru, Clayton Christensen, predicted that half of American colleges and universities would shut down by 2030. While subsequent predictions have been less dire, to put the situation in perspective, Moody’s determined that roughly one third of all colleges were operating at a deficit before the pandemic. The current reality has created what is likely the greatest liquidity crisis for higher education in modern times.

At particular risk are small, private, tuition dependent colleges where, “having ten fewer students than expected is a serious financial problem. Having thirty fewer is a disaster,” according to Alice Brown, former president of the Appalachian College Association. In the case of private institutions, there is no “faith and credit” of a state government serving as a financial backstop. While many publics are also facing crisis, it is unclear how they “fail” in the sense that insolvency and bankruptcy do not apply in the same way to public entities as they do to nonprofit and for profit corporations. Some may continue to operate as what Scott Galloway at NYU has termed “zombie institutions,” technically open, but unable to fulfill their missions.

The headwinds facing most of higher education, including unfavorable demographics, declining public attitudes about higher education, cost, debt and declining ROI for students, macro-economics, and competition from “mass market” alternatives (both within higher education and externally from industry) tend to pose even greater challenges for small, private institutions, whose value proposition has historically been founded on a very expensive and highly traditional campus-based experience. This presents a double whammy because not only is the student market for that higher education model declining, but the fixed costs of predominantly residential, campus-based operations create structural challenges for those institutions’ financial viability even if they have enrollments close to historical levels.

Our Perspective on the Depth and Breadth of the Challenge

Based on our many combined years in the roles of trustee, college president, and private sector CEO, we feel that the situation may actually be worse than typically understood for three reasons. First, as an “industry,” higher education was in a dramatically weakened state before the COVID crisis. Secondly, despite nine consecutive years of enrollment decline and large numbers of mergers and closures, leadership in the majority of colleges failed to engage in the kind of foundational change that was necessary in the face of dramatically evolving operating environments. And third, institutional boards, which were built to politely oversee status quo realities are ill-equipped structurally, behaviorally, culturally, and from a perspective of expertise to effectively exercise their governance responsibilities during the current volatile, complex, and hyper-change reality.

A business facing environmental changes of this magnitude would be expected to pivot rapidly by entering new markets, developing new products and services, jettisoning legacy systems, engaging customers with new value propositions, and rapidly innovating. Higher education, however, due to both structural and cultural impediments, did not respond even to the severe decline before COVID. Because the shared governance typically found in colleges and universities distributes decision making, it is time-consuming, lacks a sense of urgency, and requires constituencies with competing agendas to come to consensus. It is not an overstatement to say that, in many cases within higher education prior to the pandemic, institutions and the folks within them (administration, faculty, boards, alumni), actually accepted failure rather than choosing to change.

A potential saving grace of the current pandemic for the institutions that survive is that it may finally be what Robert Zemsky has termed a “dislodging event”—something that is so jarring that it forces change that was not possible before. A recent example is faculty who said they would retire before teaching online who nonetheless found themselves teaching through some version of technology mediated distance education because they had no choice! There is also modest evidence that, faced with existential crisis, some institutions are at least entertaining new ways of operating that were off-limits before the pandemic. So far however, those changes are more likely to be related to short term crisis management than genuine transformation.

Why Boards and Governance Have to Change

Based on recent research conducted by one of the authors, it is fairly clear that the failures of the last ten years are broadly leadership failures, both at the executive level and, significantly, on the part of boards of trustees. Although the external pressures on higher education have been serious, most institutions of higher education and their boards, have been remarkably complacent in the face of long-term declines in enrollment and revenues, increasing competition, shifts in post-secondary education from traditional colleges and universities to commercial and industry providers, and increasingly negative public attitudes about the value of higher education. Despite repeated, visible warnings, executive teams and boards broadly clung to the status quo hoping things would just get better.

Why would boards be part of the problem?

First, boards operate in the context of a shared governance model, which itself is rarely amendable to nimble decision making, risk-taking, speed, innovation, or transformational change. Secondly, they operate within a cultural framework in which there is more inertia to protect the status quo than to support transformative ways of being and operating. Although shared governance is broadly understood to have certain guidelines about who has authority over different spheres of activity—thefaculty taking charge of the curriculum, the president conducting day-to-day management of the college, and the boardhaving responsibility for fiduciary oversight, stewardship of the institutional mission, and hiring/firing of the president— in practice, however, this ostensibly clear-cut delineation is not well understood and is often a significant impediment to making decisions and taking action. Instead, it becomes a political process dedicated to balancing competing interests rather than to supporting the best decision making.

Another challenge is related to accountability. According to Jay Schalin, the director of policy at the James G. Martin Center for Academic Renewal, most private college and university boards are effectively the “owners” of the institution and legally have the final say, yet they commonly relinquish that authority to the president and the faculty (again, typically for cultural and political reasons). To be blunt, as noted by Brian Mitchell and Joseph King, if an institution is in decline over a period of time, it is the board of trustees that is ultimately to blame, because the board has final accountability for an institution’s finances and its ultimate viability. The research previously cited in this article found that critical issues such as declining enrollments and revenue, liquidity problems, deficit spending, deferred maintenance, etc. were repeatedly discussed in board meetings without the boards asserting their governance obligations, often until it was too late and the colleges were no longer viable concerns.

The very nature of college boards also creates substantial obstacles for the institutions they oversee, some of which are discussed below.

Board Structure and Membership

Private college trustees are nearly universally selected due to their wealth (as possible donors), career success/status, alumni affiliation, former institutional affiliation, and perceived influence. And they are all volunteers. As a result, trustees are generally supportive, if not passionate about the institution, but unlike corporate directors, do not have a direct stake in its success. Because they are not broadly selected for their expertise as it relates to the institution’s operational and strategic needs, the CEO and executive teams do not benefit from needed input nor are they actively challenged relative to planning, decision making, performance, prioritization, strategy, etc. Lastly, the typical college board is overwhelming large with dozens of trustees, a majority of whom are usually alumni. Although such huge numbers of trustees support the goal of broader inclusion, it is highly problematic relative to the board’s functionality and efficacy. And the disproportionate number of alumni, while creating passion for the institution, tend to also create nostalgia and inertia for how things “used to be.”

Culture

Typical board cultures support politeness, friendly relationships, political correctness, and respect for the status quo and legacy issues over transparency, healthy conflict, bold thinking, and transformative change. Such culture has been nurtured over many decades of status quo operations, but it is detrimental in today’s operating environment.

Information Asymmetry

Information asymmetry between the administration and the board is common. Because their work is volunteer and part-time, many board members’ awareness of what is going on at their campus and in the broader landscape of higher education comes exclusively through reports and updates provided at quarterly (or less frequent) board meetings. In some cases, the asymmetry of information between the administration and the board is more intentional. Information may be withheld or kept at a superficial level so that presentations and/or decision making is quick, avoiding time-consuming due diligence (and the related accountability that would come with such a process). We have both observed boards receiving information about material, serious, or even existential issues (and even making decisions), with an almost autonomic response.

Problem Blindness

Related to information asymmetry, independent college turnaround consultant, Ruth Cowan, referred to boards either unaware of, or ignoring their problems as “problem blind.”  Decline at a college/university can be more difficult to see than a business.  A college is mission oriented whereas a business is profit focused. Colleges and universities with broken business models can operate years after a similarly beleaguered business would have been sold or dissolved. In fact, when an institution announces a merger or closure, that reality was years in the making, until, despite a range of financial “tricks,” there is simply no more liquidity to operate.

Deference to the President

Compounding the problem blindness of boards is being overly deferential to the president, which has contributed in some cases to presidents engaging in wasteful, misguided, and risky pursuits. Moreover, Boards’ awareness of what is going on at their campus and in the broader landscape of higher education comes almost exclusively from episodic board presentations. Administrators, on the other hand, are usually long-term academics who are intimately acquainted with almost everything that occurs on their campus and highly informed about higher education in general. It is therefore only natural for board members to defer to the president.

While the interdependence of the board and the president can be a strength of the presidency, it can also lead to what long time college trustee and US Appeals Court Judge, Jose Cabranes, described as “back him or sack him” whereby trustees believe they should unequivocally support the president until he or she becomes objectively and obviously unfit for the position.

Optimism Bias

Optimism bias, fueled by an internally focused view, can lead to a systematic fallacy in strategy and decision-making that Nobel Prize winner Daniel Kahneman calls  “the planning fallacy”. In this dynamic, decision makers tend to underestimate costs, completion times and risks, while overestimating the benefits. The planning fallacy can be mitigated by “reference class forecasting” whereby decision makers find a reference class of similar projects, allowing them to form an “outside view” that is almost certain to be less optimistic than the inside view. The very nature of college/university governance is a breeding ground for optimism bias, due to the aforementioned deference, problem bias, and information asymmetry.

The Pandemic as Existential Crisis

The predictions of vulnerability and mass closings preceded the pandemic and so did the conditions that made it difficult for institutions to make substantive changes in response to environmental threats. As with Robert Zemsky and his notion of a dislodging event, perhaps the pandemic will be the “disorienting dilemma” that Jack Mesirow, the father of transformational learning, said was necessary for critical reflection followed by transformation.  The boards of the institutions in Dr. Bills’ research that successfully reversed their declines and began to thrive, all responded to a disorienting dilemma, usually a threat of foreclosure or loss of accreditation, by engaging in soul searching followed by transformative actions to change the institution. Interestingly, even for those institutions, the threat had to be literally existential in order for the boards to “wake up.” Although the institutions in question faced their moment of truth pre-COVID, it may be that the current crisis will provide a similarly motivating scenario to shake other boards out of their complacency—to prefer change, even change that alters the nature of the institution—rather than riding the status quo to a painful demise.

Whether one agrees with Robert Zemsky or Clayton Christensen about the number of institutions at risk of failing, one-fifth to one-half of American colleges and universities is a big number.  Some institutions’ fates are already sealed, but the good news is that we know what is working in institutions that have found success. Many, even those who are struggling significantly, have the potential to survive and then thrive – and it starts with the board of trustees.

Surviving and Thriving

While there is no sure-fire formula, according to Terrence MacTaggart, “turnaround sagas are remarkable in that they are at once unique and yet much alike. Each change story exhibits strikingly particular features of locale, culture, mission, history, leadership, temperament, resources, and programs. At the same time, each story displays marked similarities.” 

At the highest level, boards have to:

  • Accept that problems are structural, not episodic
  • Hire the right leadership with the right profile
  • Quickly align expense with revenue*

*Generating and operating under solvent budgets are normally the purview of the CEO and her or his executive team. However, in crisis, board intervention to ensure solvency is critical to support the mid and long-term objectives of surviving and ultimately thriving.

Seven Critical Board-Related Success Factors

The characteristics of a change adept board that is prepared to lead a turnaround and/or address an existential crisis are clear. The research identified seven critical success factors that the board must demonstrate in order to successfully transform an at-risk college or university

  1. The board recognizes that a crisis is imminent or looming.
  2. The board accepts that survival will require a departure from tradition.
  3. The board ensures that they have a president suitable for leading a turnaround.
  4. The board partners with the president to support change initiatives and actively works with the president to overcome resistance to change.
  5. The board intentionally recruits and develops board members who will understand and support the turnaround.
  6. The board works with and learns from outside advisors skilled and experienced in college and university turnarounds.
  7. The board uses its authority to take action.

Even in the absence of crisis, institutions who have realized significant success, particularly those that have experienced substantial growth, such as Arizona State, Southern New Hampshire, Western Governors’, Grand Canyon, etc., all had dynamic leaders AND boards that were willing to support transformative change.

Institutional Characteristics that Support Success

In addition to board traits, we know what the characteristics are of the institutions that are managing to thrive in the current environment. Although every IHE has its own particular challenges and opportunities, there are common threads across the schools that are finding success, one of which is simply that they understand the reality and have a plan to address it. Several common factors are:

  • Dynamic Leadership
  • Capacity to Innovate
  • Deep Industry Collaboration
  • Aggressive Partnerships
  • Alternative and High Margin Revenue Streams
  • Retention of Existing Students
  • Differentiation in the Market (Programs, Services, Delivery, etc.)
  • Customer Value
  • Licensure Programs/Programs Required for Employment
  • Alternatives to Traditional Degrees
  • Focus on Sustainability
  • Finance as a Core Competency
  • Really, Really Good at Basics
  • A Culture that Promotes Success (entrepreneurialism, risk taking, collaboration, etc.)

Conclusion

While any change related to any crisis presents significant challenges, higher education has historically been much better at preserving the status quo than embracing transformation, which creates an added cultural barrier to the kind of thinking and action that is necessary today. However, for boards that recognize the sacred charge of their trusteeship and are therefore willing to have difficult, sometimes painful discussions, pursue accountability for executives and themselves, take action that will challenge tradition (and some constituencies), and maybe most importantly, are willing to embrace the risk that might be necessary to trade status quo for relevancy, there is not only a path to survival, but to a sustainable, audacious future.

Resources

In our trustee, president, and consulting roles, we have come to understand that even boards that want to fully maximize the impact of their trusteeship, are often not capable of doing so due to a variety of issues enumerated earlier in this article. Whether the challenges are structural, cultural, behavioral, relational or some combination, those problems can be overcome if boards genuinely want to improve their efficacy. If boards are ready to do the hard work, starting with deep self-reflection, openness to objective evaluation, transparency about what is working and what must be different, honest evaluation of their institution’s risk, and acceptance of true accountability for their responsibility, boards can not only be more effective, they can be transformational.

Unfortunately, traditional models of third-party board support are typically inadequate for the complexity of today’s challenges. However, there is a partnership model for guiding boards through the kind of comprehensive work described above. If you would like to learn more, please reach out to Dr. Mike Bills at mike@wasatcheducationpartners.com or Dr. Wallace Pond at wallace@wasatcheducationpartners.com. Either of us would be pleased to discuss what options might make sense for your board and institutions.

Author Bios

Mike Bills, a successful entrepreneur and long-standing college trustee, co-founded Wasatch Education Partners with the goal of ensuring that college boards are part of the solution rather than the problem for institutions that are struggling through very complex and difficult times.

Wallace Pond, a thirty plus year educator, executive, and entrepreneur, co-founded Wasatch Education Partners to ensure that college boards are getting the critical support they need to succeed in today’s volatile, hyper change reality.

The End of Higher Education as We Know It

Image Credit: Money Magazine

I wrote an article before the corona virus pandemic three years ago about the decline in higher education caused by massive disruption to a four-centuries old model, that, unlike almost every other industry had managed to avoid market forces for essentially it’s entire existence. In that article I asked whether or not there was a future for higher education as we know it. It has become clear that for a large chunk of traditional higher education, the answer is simply, “no.”

Over the last ten years a combination of factors including demographics (declining birth rates), increasingly negative views of higher education, unsustainable revenue and financial models, cost and debt, structural changes in the economy, a diminishing return on investment for students, and a growing number of alternatives has decreased college enrollments by well over 2,500,000 students compared to 2010. You can see a comprehensive explanation of each factor here. And that’s just the first wave. 2020 has seen the greatest year over year enrollment declines in the entire 10-year cycle and the disruption from competitors and technology is just getting started.

We are entering a phase in which the effects of an imploding business model that began years ago are being exacerbated by additional disruptive forces such as the de-monetization of post-secondary education caused by shorter, cheaper, industry driven, non-credit, non-degree educational programs. This has been in the pipeline for years, but the blockbuster changes of 2020 are the entry of companies like Amazon, Google, and Netflix into the post-secondary education space, which is simultaneously blowing up the last vestiges of the two, core elements of the traditional higher education model: tuition and degree programs. At the same time, these companies, and many others, are no longer requiring traditional college degrees for employment. While there will continue to be some jobs that require degrees and/or licensure that at this point can only be earned through college programs (think: health care, engineering, high-end accounting, etc.), that will become a shrinking part of the overall employment credential market and eventually even those jobs will be accessible without traditional college programs. In fact, the transition has already begun with computer science and engineering, project management, human resources, business management, numerous vocational jobs, and even lower end allied health positions—all jobs for which the training used to come from college degree programs. A survey conducted during the pandemic found that 63% of adults said that if they pursued an educational program, they would prefer non-degree skills training or certificates rather than a degree program at any level, so it’s clear that given a choice, the student market is moving away from degrees as well.

And unlike other industries that have gone through and survived powerful disruption by reinventing themselves, higher education writ large is simply unprepared and incapable of making similar transitions. Of course, there are exceptions, and the best of those will thrive, but broadly speaking colleges and universities are structurally impaired when it comes to transformational change. Examples include the shared governance model, high fixed overhead, a regulatory regime that stifles innovation, organizational and academic culture, inadequate executive and board leadership, and constituencies that are more vested in the status quo than in survival. The good news is that we know what the necessary leadership profile looks like for institutions and boards that are ready to hire those kinds of leaders. Unfortunately, large numbers of colleges and universities were dramatically weakened even before COVID and before the entry of additional disruptive forces. As noted by Moody’s, roughly a third of all institutions were operating in the red before the pandemic. That number is likely to be approaching 50% at this point, as both tuition revenue and state support continue to decline at the same time pandemic expense is increasing.

Relatedly, with few exceptions, traditional higher education simply does not support, and is not capable of supporting, industry in any meaningful way. Before COVID, most industries were abandoning higher ed as an employee pipeline and building their own infrastructure for both entry level and on-the-job training. While the pandemic put the brakes on that in some parts of the economy such as hospitality and aviation, it has dramatically increased in other areas such as logistics, online retail, healthcare, and technology. In short, higher education is quickly losing its long-held monopoly as the path to professional education to companies and organizations that deliver affordable, relevant, “fresh,” just-in-time job skills via programs designed by the employers for whom the students will work!

But it gets worse.

One of the key reasons that there is no future for a large swath of traditional higher education as we know it is because for many students, post-secondary education has become a retail transaction, similar to any other in their lives. This is an existential problem for colleges and universities (regardless of the sector they’re in) because they charge high prices for what is typically one of the highest-friction, poorest customer experiences a student can have, which, by the way, also requires a huge investment of time and effort, for an outcome with a declining (and in some cases, negative) ROI! Moreover, traditional higher education is one of the last, worst adopters of technology as a tool for creating a positive, efficient customer experience. Disruption requires an alternative to the status quo that works better for a large number of consumers and the trend we are at the front end of now will soon be a tidal wave led by disruptors for whom the bar of an easier, better experience and value proposition is already low.

The primary cause, then, that the market for traditional higher education will be so much smaller in the fairly near future than it was even a decade ago, and relatedly why so many more institutions will merge or close, is because colleges and universities are fundamentally unprepared to reinvent themselves at the same time that new providers that understand the retail and service model are aggressively entering the post-secondary market with options that are faster, cheaper, easier and often provide an immediate, high value return on investment.

Moreover, some key factors will continue to present growing challenges for traditional colleges and universities such as worsening demographics, decreased public funding, and further disconnects from industry which has needs that higher ed has broadly failed miserably to meet. The top echelon of the most elite institutions will be able to operate for the foreseeable future much as they have for the last century, but that represents about 10% or less of all of the colleges and universities in the country. Declining birth rates alone will decrease the pool of available college freshman by a fifth or more between 2025 and at least 2040! As the traditional market continues to shrink, the one third or so of institutions that are “exclusive” (they accept fewer students than apply and still fill all their seats) will each become less exclusive by poaching from the layer below them, until there is no layer from which to poach—at least the remaining two thirds of higher education. For post-secondary education, however, which includes every conceivable education program after high school, the market includes everyone from 18 to post-retirement age, who, by the way, will have to continue going back to “school” over and over again for their entire working lives. Declining birthrates are inconsequential for organizations operating in that market.

Because higher education is shrinking while post-secondary education is growing, whether programs are ultimately offered by colleges, industry, or other providers, those who are able to deliver education that customers need and want, when they need it, with a positive customer experience, will be part of the market that is growing. Those who can’t either have to be in the top tier of exclusive traditional colleges, or they will eventually go away.

A Note on the Effect of the Pandemic

I have had direct visibility into dozens of institutions of higher education over 2020 and while they have achieved herculean results managing the crisis, in fact doing things they would have thought simply impossible before the crisis, almost none of them are meaningfully thinking about the future. In part, they have used every inch of organizational bandwidth and in part they are simply exhausted, but I am aware of exactly two institutions out of probably 30 or 40 that are actually thinking in a strategic and entrepreneurial way about what comes next. Most have confused solving really hard crisis-driven operational problems with innovation or planning for the future, and it is neither. And the vast majority of the folks I’m in communication with have no idea of the true disruption that is on the horizon—they think it was COVID. They naively believe that having temporarily solved the problem of delivering education and services remotely has prepared them for the future!

So, when I wrote my first article on disruption in higher education about three years ago, I was aware of all of the factors (other than a global pandemic) which are conspiring today to profoundly disrupt one of the oldest “industries” in America. What I didn’t fully understand at the time was the underlying weakness and lack of resiliency in much of higher education overall and the extent to which many colleges and universities would actually choose to fail rather than change. What makes most other industries different in the face of disruption is their willingness to fight and to reinvent themselves to survive. Because that is broadly not the case in higher education, my sense is that the growing disruption will leave more wreckage in its wake.

On the other hand, disruption always brings opportunity for those who are fully aware of and accept the reality and have the courage to embrace even foundational change. As it relates to higher education, those institutions will have the added advantage of being in the minority and thus more likely to benefit from the courage to reinvent themselves.

To explore what options exist to increase the likelihood that your institution is on the side of the ledger of surviving and thriving this tsunami of disruption, reach out to Dr. Wallace Pond at wkp@wallacekpond.com or https://www.linkedin.com/in/wallace-pond-47b05512/

Surviving and Thriving Through the Current Higher Education Crisis: We Know What Works

Image Credit: VantageCircle

The Current Reality

Higher education was in a nine-year enrollment decline before the corona virus pandemic. As a result, there are over 2,000,000 fewer students enrolled today compared to 2010 and over 1,300 institutions have merged or closed in the same period. While the early years of the decline disproportionately hit for-profit colleges, the last few years, and particularly 2020, have had a greater negative impact on nonprofit institutions. Even before COVID, Moody’s noted that nearly a third of all colleges and universities were operating at a deficit and they now predict five to 10% additional revenue declines for the 2021 academic year.

If the ten-year market decline in higher ed was death by a thousand paper cuts, the pandemic is the grim reaper. What most people don’t realize is how severely weakened most of higher education was before the crisis. And fall 2020 represented the greatest year-over-year enrollment decline of the entire 10-year trend. Ironically, community colleges have suffered the steepest decrease from 2019 at 10%, but the reality is actually worse because first time CC enrollments are down a whopping 23%. Freshman enrollment across all of higher education is down nearly 16% in 2020, with even larger declines among Black, Hispanic, and Native American students. New international enrollments are down an astonishing 43% compared to 2019. Possibly most concerning, this fall, 22% fewer high school seniors enrolled in college than in 2019, with low-income high school graduates failing to enroll at a rate nearly 33% lower than last year. This is one more data point showing how the pandemic has disproportionately hurt the most vulnerable in our society.

So, the situation is bleak and some substantial number of institutions will not survive the next few years. And not just because of the current pandemic, but because students were already moving en masse away from traditional higher education as the return on investment has become simply unworkable for a growing number of students. In fact, the entire credit bearing, degree granting model is at-risk as untenable debt, worsening demographics, and industry players, including really big actors like Google and Amazon take market share in the post-secondary education market. The demographic problem alone will compromise freshman enrollment for at least the next two decades, so this is not a temporary issue.

Despite this fairly gloomy picture, there are institutions that will survive and even thrive going forward. It is true that the overall higher education market will continue to shrink and could be 40% smaller in 2030 than it was in 2010. However, the post-secondary market is growing, and some institutions are actually thriving. The good news is that we know what they’re doing and it can be replicated for colleges that are up to the task.

What is Working

There are some high-level commonalities within institutions that were doing well before the pandemic, despite the industry-wide declines, and those same characteristics are proving valuable in the current crisis. In fact, many of these approaches apply outside of higher education as well. As simple as this sounds, it starts with fully acknowledging the reality and being transparent about the implications for the institution. Denial is a big problem in academe and institutions that have been brutally frank and open about their challenges have a head start. Relatedly, colleges and universities that are prepared to make foundational changes in order to meet the challenges head on have demonstrated that they fear change less than failure. Remarkably, many institutions are so wedded to the status quo that they have actually closed rather than reinvent themselves.

What Market Are You In?

The most successful institutions over the last ten years are those that clearly understand what their market opportunities are even if that means doing things they’ve never done before. That may mean shifting delivery methods or moving from credit bearing to certificate programs for from traditional curricula to competency-based education, etc. And to be clear, it is not just about adding new programs. That often creates more fixed cost. The gold standard is a market driven product strategy that supports itself with things like shared curricula, program verticals, and at least some high margin elements. As noted earlier in this article, the reality is that post-secondary education, everything after high school, is growing even as traditional higher education shrinks.

Institutional Characteristics and Culture

Not surprisingly, the most successful schools don’t look or behave much like traditional institutions. They support innovation and an entrepreneurial spirit. They embrace risk and invite change. They are comprised of staff, faculty, and management that are empowered to experiment, collaborate, and meet customer needs. They are less bureaucratic and more nimble, acting quickly to take advantage of new opportunities as they arise. They tend to partner aggressively in the interest of efficiency or revenue generation or growing market share. And possibly most importantly, successful institutions have, above all else, created a compelling value proposition for their student-customers and a financial model that includes alternative and high margin revenue streams. With very few exceptions, it is nearly impossible to run any institution of higher education today with only a traditional tuition-based revenue stream. And all of this happens because they have enlightened, game-changing executive leadership and trustees. Colleges and universities with status quo leadership, particularly if they are experiencing material enrollment declines, are frankly in dire straights. You can see a likely view of higher education’s future here.

In short, there is no secret or mysterious formula for surviving and thriving through the decline and current crisis. Although higher education has the structural problem of more supply than demand, the good news for institutions that have the courage to engage in the practices noted above is that very few of their competitors will actually choose to do what’s necessary or be capable of it even if they would like to, so those that do will have minimal competition for growing market share. Moreover, as additional institutions downsize and close, the supply-demand gap will also decrease, at least for institutions that have affordable options beyond traditional degree programs. If you would like to discuss how we can help with building your organization’s capacity to survive and thrive, including ensuring that you have adequate leadership, please click here or contact us at wkp@wallacekpond.com or 719-247-0486.

2020’s Silver Lining: We’re Finding Our Humanity

One of the legacies of 2020 will be how governments, organizations, and individuals responded when the stakes were high and decisions were hard. Did we “circle the wagons” and act selfishly or did we work for the greater good? Did we act out of fear or out of compassion? Did we follow our professed values or did we make short-term decisions that benefitted a few at the expense of others?

One of the reasons that 2020 has been so emotionally devastating for so many people, apart from the pandemic itself, is because it has highlighted just how ugly human behavior can be. However, we have also proven that we are capable of grace and nobility. Some governments, organizations, and individuals chose the right path, even when it was harder. In the workplace, for those of us fortunate enough to be employed, we’ve seen the human beings behind what used to be a workplace façade. We’ve seen into their dining rooms and kitchens on Zoom calls. We’ve heard the noises of their everyday lives. We’ve shared the vulnerability that human beings always experienced, but that traditionally was unfortunately left at the office door. We’ve had to completely redefine concepts such as “professionalism,” whose historical definition actually devalued us as human beings and often put us in untenable situations. We’ve been pushed to the breaking point, and amazingly, kept putting one foot in front of the other. “Frontline” workers—the ones who keep our grocery stores stocked and deliver goods and provide care to the sick—have continued to report to work in the face of significant risk to their own health and wellbeing.

2020 has given us permission to think very differently about what matters to us and how we live our lives. Crisis can be devastating, but, not so ironically, it can also be liberating, because it takes us to places where the very calculus of our decisions has changed. What we thought had to be true in terms of how we make a living or where we live or what we can live without, or even what makes us happy, necessarily evolves when the very foundation of our lives shifts. When we’ve been pushed beyond normal boundaries, we become emboldened, whether that relates to our own life choices or lending our voices to advocate for others.

We know that the multilayered crises of 2020 have resulted in greater mental health challenges, for more people (adults and children), than at any other time in modern history. The economic devastation wrought by the SARS-CoV-2 pandemic has put tens of millions of Americans and hundreds of millions of people world-wide in a precarious situation related to employment, food, housing, and health care. On the contrary, we also know that this same crisis has done more to mitigate the stigma against mental illness than any previous period in modern history. Literally millions more people in the U.S. alone have sought professional care for mental health challenges in 2020 than did so in 2019. And maybe most encouraging of all, the devastating challenges of 2020 have validated the approach to life that many millennials and GenXers were presciently advocating even before the multiple existential crises of 2020. Once criticized for valuing time and purpose and relationships over soul crushing work, money and status, it turns out these young people were far wiser than their elders, who now, in their older years, wonder where the hell their lives went and what they were thinking dedicating decades of 50 and 60 hour weeks to material pursuits, that, in the end, will be of little value to a life well-lived.

Another key lesson of 2020 is: How we treat one another is a choice. We have seen people at their ugliest and their most noble over the course of the year. Stress pushed some people to be their worst selves and others to a place of grace, but in the end, we humans are capable of acts of kindness, generosity, and agency. We are also capable of shifting our focus to things that support better, more sustainable lives for ourselves and others. It is unfortunately true that we crossed many lines of previously unacceptable behavior in 2020 and it will take a long time to recover from that, but we also achieved new levels of enlightenment. In the darkness, we are finding our humanity.