Five Concerns That Can Interfere With Branch Campus Growth

If it isn’t apparent, my recent posts reflect growing concern and frustration with the way institutions administer their branch campuses.  Having spent some years working with online programs, as well as studying the implications of disruptive environments on organizations, I also see important strategic connections between branches and online delivery.

Moreover, virtually every consulting role I’ve filled was at least in part tied to a president who wanted to see enrollment growth at their branches and in their online programs.  Although I’m pleased and impressed that these presidents recognize the potential significance of branch growth, the press of day-to-day crises at the main campus makes it nearly impossible for presidents to personally lead specific initiatives.

I should add that, again in my own experience, provosts or academic vice presidents seem less consistently concerned than presidents about enrollment growth through new audiences.  Deans have been mixed in their engagement, as well, but typically seem most focused on their main campus mission.  (This is not meant as a sweeping generalization, but simply my own too-common observation.  I’ve known and worked with some terrific deans and vice presidents.)

Although this is understandable, given their background and priorities, it means that presidents and branch campus leaders may be on one page, whereas the administrators between them are, at best, less committed to branch growth.  That is just one reason for my belief that presidents and boards should create relatively autonomous units to attract and serve adult learners and others who prioritize cost and flexibility over a residential experience.

With that overview, in this post and the one to follow, I will raise five concerns I have about the way branch campuses are administered that will reduce the likelihood of enrollment and revenue growth.  Similar points can be made about online programs, as well.

The first concern is that branches typically are buried in an institutional structure that is designed for predictability, not entrepreneurship.  The branch structure should allow nimble, quick response to opportunities, assure that branches can offer the courses and programs for which they have local demand, and encourage deep, engaged partnerships with the community served.  Moreover, both branches and online program executives should understand entrepreneurship and be aggressive in pursuit of enrollment growth.

The second concern arises if the budget covering faculty salaries and the delivery of courses on branch campuses resides in the main campus academic units.  Truthfully, this seems so obviously wrong to me that I’m stunned by how often I see it happen. Deans and department chairs need to see clear financial benefit from supporting branch courses, or else they will see branch courses as a drain on their resources.  

Put the academic budget on the branches, and then let units receive a share of the revenue generated, outside of their normal operating budget.  If you choose to pursue responsibility-centered budgets, which I endorse, treat branch campuses and online programs as revenue centers, not as service units.  The dollars still can eventually wind up in the academic units, but it is those units that are serving the branch audience, not the branches that are serving academic units.

Next time, three more concerns!

The How of Disruption in Higher Education

I have not written about innovation or disruption in higher education, on Creating the Future, for a while, although I do write about it on my branch campus blog.  This post will be published on both.  (The blog addresses are www.branchcampus.blogspot.com and www.drcharlesbird.com/creatingthefuture.)

I’m intrigued by the rapid progress of MOOCs (massive open online courses) and other online options, but the trigger for this post is the pushback we see, especially from some faculty members.  The defense of traditional classroom education seems disingenuous, appearing to suggest that all faculty members create vibrant learning environments and transform students into sophisticated critical thinkers, even as students also acquire undefined benefits from the residential experience.

Actually, there are remarkable professors out there, and I know full well that important growth can come through the traditional experience.  The issue is how consistently this happens, whether we might find less expensive ways of creating these experiences, and whether the level of debt students are taking on is worth the gain (still undefined and unmeasured).

That said, I also think many defenders of the status quo fail to understand how new developments will disrupt traditional higher education.  Remember, disruptive improvements begin by serving current nonconsumers.  In this case, they attract audiences that are unserved or poorly served by traditional options.

In the case of higher education’s future, like it or not, the issue is money.  Residential education, specifically, has become so expensive that nearly all non-elite institutions fail to cover their cost of operation, especially given declining state support for public education, without extraordinary increases in tuition.  What some have called an “arms race” to compete for students has gone too far. 

The result, as I’ve written many times, is that many institutions require the revenue from branch campuses, online programs and other sources, to survive.  If the “primary” activity is going to lose money, then something else has to offset that loss.

To cause disruption, it isn’t necessary that most students turn to MOOCs or other low-cost options.  All that has to happen is for main campus financial losses to grow larger, and for enough nontraditional students to choose lower cost routes to their goals, to cause many institutions to begin a slide into oblivion.  Add in the developing trend of some employers to value the credentialing of skills over degrees, and we have the opportunity for disruption.

Once institutions pass the tipping point, change will seem to come quickly, but the reality is that it is happening across a much longer period of time, as a result of traditional campuses over-reaching.  This is why second- or third-tier institutions will suffer the most.  Elite public and private institutions will be fine, although they will need to make some adjustments.

Finally, when critics attack new delivery options, especially with regard to quality, they essentially are attacking a straw man.  Disruption moves upstream, from serving nonconsumers to serving traditional consumers, by improving quality through experience.  I believe our culture values education, and few are addressing how the “psychology of going to school” will impact choice.  Nevertheless, even if many people prefer a traditional, residential education, institutions have an unworkable financial model that seems ready to collapse.

As always, leaders who understand how to empower branch campuses and online programs for entrepreneurial outreach have the advantage.  Some institutions will thrive, but to do so, they must understand the challenge.

Revisiting Revenue Sharing and Entrepreneurship as Tools for Branch Campus Growth

The second most viewed post on this blog is titled, “Revenue Sharing and Support for Branch Campus Growth.”  (http://branchcampus.blogspot.com/2010/02/revenue-sharing-and-support-for-branch.html).  I tend to write shorter, more focused posts, these days, but so it goes.  Among other things, I described the approach to funding in Ohio, which worked well for a very long time.  Unfortunately, recent changes may make things harder for university branches; I am concerned about the long-term implications for enrollment.

In the same month, I also wrote a post titled, “On Being an Entrepreneur in Higher Education.” (http://branchcampus.blogspot.com/2010/02/on-being-entrepreneur-in-higher.html)  That post stemmed from my frustration with institutional leaders who claim to be entrepreneurs, but do not appear to understand what it means to empower innovation, especially in a disruptive environment.

Good information is available on how to develop and empower strengths-based teams that can release energy and creativity in organizations.  There are people who really “get it,” and they are more likely to be found on branch campuses and in those units that have experience in continuing education or lifelong learning than in the offices of those whose career focus has been within traditional academic units.

I do not question the good intentions of presidents, vice presidents, and deans, but in typical academic fashion, too many try to be “innovative” or “entrepreneurial,” without ever talking seriously with people who have been there and done that.  It’s frustrating, in part because I believe there is a lot at stake for most institutions.

Entrepreneurial efforts are intended to develop products and services that will attract new audiences to the institution or that will significantly change its competitive position with existing audiences.  Therefore, units charged with innovation require autonomy to allow flexible, quick engagement with audiences and partners, as well as the ability to make investments consistent with their rate of growth.  When universities bury these efforts in their colleges or hinder their progress with policies and practices that are inconsistent with speed and responsiveness, innovation will proceed slowly, if at all.

I think most institutional leaders would be well served if they think of their institution as a kind of holding company, with a variety of businesses, each of which can and should be managed on its own terms.  (I know some people don’t like business-related metaphors, but I’ve long since stopped worrying about that.)  Each “product line” requires structure, policies and practices that enable success within its own market.  Each requires leadership that understands the specific mission, the competitive environment, and the elements of a successful strategy.

That’s not to say that leaders shouldn’t insist on appropriate internal partnerships or that some activities and services shouldn’t be centralized, but the effort should emphasize the word “partnership,” and should serve the legitimate interests of each partner.  (With respect to academic programs, I’m suggesting that faculty still should lead and oversee program development and quality, but decisions about offering programs at branch campuses or online should be market driven, and processes for program development and approval should be streamlined.)

Give branch campus leaders an opportunity, and many will understand how to engage with their audiences in a high quality, high touch way that can succeed.  Keep them under the control of mid-level main campus administrators, and they will not be able to compete effectively with newer options.  Force innovative initiatives to fit within your academic, financial, human resource, and political traditions, and you will be on a very dark road.

The Accelerating Rate of Change in Higher Education

A few years ago, I wrote a piece for this blog titled, “Rate of Change and Predicting Which Institutions Will Thrive in the Future.”  You can find it at http://branchcampus.blogspot.com/2010/05/rate-of-change-and-predicting-which.html.

The post was based on a quote from Jack Welch:  “I’ve always believed that when the rate of change inside an institution becomes slower than the rate of change outside, the end is in sight.”  Sobering words, but the logic is compelling.  Over and over again, we have seen that established organizations in a wide range of industries lose out to more innovative, nimble organizations with an idea that disrupted the status quo.

I am revisiting this topic, because the rate of change in higher education clearly accelerated in recent months.  The stories are stunning, as the availability of MOOCs and other online options are expanding.  The emergence of “free” courses has rapidly spawned remarkably low-cost options to turn those non-credit experiences into credit-bearing courses; we see more interest than ever in credit for prior learning; and we see a move toward awarding credit and degrees that are based on competencies, rather than on completed coursework.

I could go on, but I no longer have any doubt that higher education will forever be changed.  As I’ve written before, the problem for most institutions is that their traditional, residential programs inevitably lose money, in large part because of the nearly insane competition to expand amenities.  However, if you want to see real confusion about the challenge of serving traditional audiences, while encouraging innovation and attracting new audiences, look at state-level policy makers and boards of trustees.

Here’s the rub:  The institutional financial engine requires increased income from non-residential audiences.  I believe those audiences will be drawn to online or branch campus-based hybrid programs.  Unfortunately for the institution, those students will have excellent options to meet their needs that will be very low cost.  Established institutions will find it difficult to charge enough tuition to meet their broader financial needs, unless they have a very special brand.

We don’t know yet just which of the emerging options will be most attractive to students.  For myself, I wonder exactly how the psychology of going to school will interact with the efficiency and cost advantages of technology-driven choices.  How will students combine various modes of delivery and learning to create what may well become customized lifelong learning portfolios?

I anticipate that students will chose different delivery modes for different purposes and topics, depending on their strengths, interests, and life circumstances.  Degrees may actually become less important than building a portfolio of competencies, although adult learners may aggregate such competencies, add some missing pieces, and eventually claim their diploma.

More Attention From Institutional Leaders May Not Benefit Branch Campuses

Through most of my career, I both enjoyed and benefited from the fact that people at the main campus paid little attention to their branches.  For all the frustration and difficulty of getting programs or courses approved, the circumstances worked to our advantage.  In addition, because we were financially separate from the main campus, we developed a deeper understanding of higher education finance than most of the chairs, deans and vice presidents with whom we worked. 

(Not bragging; just sharing the facts.  My experience with finance or budget administrators really was no different, because they tend to focus so strongly on cost control and risk avoidance that we found negotiations usually worked to our advantage.  Keep in mind that I am a devotee of mutual gains bargaining, so our success was mostly a matter of careful listening and addressing the interests of others, but with a strong understanding of our own interests.  Thus, it was the lack of others’ understanding of our interests that gave us an advantage.)

I’m saying this, because I am concerned that “flying under the radar,” or being “out of sight and out of mind” have become liabilities.  Branch campuses, along with online learning programs and main campus programs for adult learners, can best serve their institutions if they aggressively pursue an entrepreneurial tack.  Being entrepreneurial and highly service oriented tend to be natural for people who have served for a long time on branch campuses.  Bluntly, however, although I meet a lot of institutional leaders who talk about entrepreneurship, I meet very few who really get it.

Given the growing importance of outreach types of initiatives, we can expect institutional leaders to take more interest in branch campuses.  However, to the extent that they do not understand the mission, the student populations, and other elements that make branch campuses a unique form of delivery, branch leaders can expect some unfortunate choices to be made at the main campus.  Put another way, if main campus administrators do not understand the interests of branch students and communities (i.e., do not understand what they value or how they make decisions), those administrators will make assumptions that are off the mark, leaving the branch all that more vulnerable to competitors.

All of this makes me believe that the need for good research and literature on branch campuses will only increase.  It also suggests to me that the main campus individuals with oversight responsibility of branch campuses need to have a legitimate background in the area, or at least to have strong support people who can deliver good advice on important decisions.  Institutions need their branches and online programs to thrive, but thriving can only occur when there is deep understanding of those adult or non-traditional audiences we hope to attract and retain.

Organizing Thoughts on Delivery and Assessment

There is no question that lots of things are happening in higher education.  New programs and new strategies show up at a rapid clip.  As you think about the future, you will necessarily make choices about course and program delivery, and those choices will have a major impact on how attractive you are to prospective students.

Consider this range of possibilities for delivery:

·      Face-to-face in a traditional classroom

·      Synchronous delivery with some students in the same classroom as the instructor and others participating through interactive video

·      Hybrid delivery, which may include asynchronous streaming videos, online elements, and occasional classroom meetings, which themselves can occur in a variety of forms; this might include use of the “flipped classroom,” which offers significant creative opportunities

·       What I’ll call “traditional” online, with an instructor teaching 15-25 students

·      Scalable online, enrolling, say, 75-300 students in each course, with one instructor and facilitators supporting smaller “sections” of students

·      What I used to call “massively scalable” courses, with a thousand or more students per section, but still supported by a team of facilitators, working under the supervision of a faculty member

·      Massive open online courses (MOOCs), sometimes with more than 100,000 students enrolled, usually for free, but typically not offered for credit

Now, consider how students might be credentialed for their work:

·      Traditional grades, leading to a degree

·      Traditional grades, leading to certificates that document specific skills and experiences

·      No grades, but the awarding of a badge (similar to a certificate) or a certificate of completion; students might receive traditional course credit through some additional process, probably for a fee

·      Recognition of prior learning and the awarding of academic credit for that work

And how might we assess student learning?  How about:

·      Traditional exams, projects and papers, perhaps with exams taken at a testing center

·      Portfolio assessment

·      Demonstrated competencies

Then, how will institutions generate revenue or otherwise cover their costs?

·      Through tuition, fees, state support, and endowments

·      Employers pay a fee to access resumes of top course/program completers

·      Content producers, such as Coursera and Udacity, license high quality course content to institutions, which then provide support and flipped classroom experiences to students; colleges and universities can create niche opportunities to do the same, including internationally

·      Industries/employers “sponsor” courses and programs, covering the cost of development and delivery

·      Students pay a fee to have competencies assessed and “certified”

Each of these lists can be expanded, and some of my bullet points may need further description to be clear.  My advice is to read newsletters, surf the Internet, and network with creative people.  I don’t think it is all that overwhelming, explored in a thoughtful way, but it does take time and energy.  Hence the concerns I expressed awhile back about making sure that you focus on the so-called “important but not urgent” items that will create your future. 

As you consider audience, cost, price, content, delivery and support services, you can work your way through the options.  You may well make different choices for different programs and audiences, and your competition will affect what makes sense.  It’s important to be nimble and engaged!

A Leadership Dilemma for Branch Campuses and Online Programs

When I suggest that most institutions of higher education are in trouble, I am in good company.  Many people say the same thing, and most point to the remarkably rapid emergence of very low cost alternatives for earning credits, especially in the lucrative area of general education, as well as alternative ways of certifying learning that tie to the needs of employers.

For example, at StraighterLine, one can earn a full year of general education credits for about $1000, and those credits will transfer to many institutions.  Companies, community colleges and a few universities are breaking new ground by providing free non-credit options that can be turned into transferable credits, through exams that may cost less than $100.  In short, the higher education financial model is breaking down.

Moreover, because leaders are convinced that spending on “amenities,” (athletics, additional buildings, etc.) is necessary in order to compete for residential students, they are increasing the cost of operation, at the same time their traditional revenue sources are under pressure.  With the eighteen-year-old demographic declining in many parts of the country, we are bound to see winners and losers, whether we look at the public or private sphere.

Just at the time that leaders need to reframe their thinking, they are, instead, trapped by the need to save their “brand.”  (And this trap is real.  I do believe that the main campus residential program creates the institutional brand for most universities.  Leaving aside political issues, alumni, donors, and everyone else, it would be foolish in almost all situations to close the main campus.  Thus, presidents and boards are locked into a “loss leader” as the activity on which they concentrate their time.  That’s a classic example of why established institutions struggle in a disruptive environment.)

I hear presidents say they want growth at their branch campuses and in their online learning programs.  Unfortunately, for the most part, they invest very little of their personal time or their political capital to get the point across to vice presidents, deans, chairs, alumni, or others.  Revenue sharing models either do not exist or are ineffectively designed, and few traditional educators understand the audience that chooses to enroll online or at branches.

Bottom line:  We have the perfect context for the emergence of new providers.  If institutions lose general education students, just as one example, it will be tough to replace that revenue, without pricing in a way that makes the competitive situation just that much worse.

Given the rapid engagement of elite institutions in the online market, it makes sense to aggressively identify niche opportunities and to empower innovation teams.  Unfortunately, I don’t see much evidence that is happening.  On the contrary, most efforts at “innovation” are kept on a very short leash, for political reasons, as much as from a lack of understanding.  What we see are linear improvements and incremental change, slowed by complex governance processes, when we need something much more creative.