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.

Two Examples of Emerging Challenges to Traditional Institutions of Higher Education

Today (February 4, 2013), there are several stories in Inside Higher Education that illustrate the point of my last post, and I want to use two of them to express a relatively strong statement of concern.  I simply do not believe that many leaders in higher education understand the train that is bearing down on them.

The first piece is titled, “Free Course, Inexpensive Exam” (http://www.insidehighered.com/news/2013/02/04/free-online-course-providers-pair-credit-bearing-exams).  The story describes the decision of a student to take a free online course, and then receive three credits at his home institution by taking a CLEP exam, for just $99.   The piece then discusses some of the many options that more and more students undoubtedly will choose over paying much higher tuition at a university, or even at a community college. 

The course was a general education course in psychology, and the student makes a perfectly understandable point that it made no sense to him to pay tuition to attend a large lecture class, in which personal attention or interaction would be limited.  However, my own observation is that general psychology is an enormously profitable course at most institutions, as are many other general education courses.  Indeed, a full cost accounting view of most upper level courses at universities would reveal that nearly all are offered at a deficit.  Take away the lucrative general education courses, and it may become impossible to balance a traditional residential institution’s budget.

The second piece is titled, “If a School Adds an Amenity and No One Knows, Does it Really Exist?  ( http://www.insidehighered.com/blogs/stratedgy/if-school-adds-amenity-and-no-one-knows-does-it-really-exist#ixzz2JwPL6XBs).  It caught my attention, because it is a blog post, commenting on a recent study that argues it may make economic sense for institutions to spend more on amenities than on improving academic quality.  (A story on the original research can be found at http://www.insidehighered.com/news/2013/01/29/many-students-opt-colleges-spend-more-nonacademic-functions-study-finds) 

Leaving aside all sorts of things one might say about the implications of this study, my take is that it illustrates another reason that most institutions are in trouble:  They have bought into a war of competition, to fill first-year classes by building the “next new thing” that will draw students.  Regardless of whether the strategy works to attract students, it certainly increases the cost of operations and contributes to escalating tuition.

These pieces illustrate the dilemma faced at most institutions.  In effect, people are working harder and harder to fill their first-year class, with what may well be negative financial implications in the long run.  Some will succeed; some will fail.

The potentially good news is that many presidents and boards now understand the need to create new sources of revenue, and that could be helpful to branch campuses and providers of online courses.  Unfortunately, however, most leaders are trapped by their frame of reference, and outside of those of us with a branch campus or continuing education background, most leaders at traditional institutions do not understand how to build innovation teams and release the power of entrepreneurship.

Next time:  The leadership dilemma

Staying on Top of Developments in Higher Education

I start most days by checking email and reading/scanning various newsletters.  I work from what I like to think is a holistic, almost intuitive sense of direction, and that seems to require immersion in information.  I wish I did a better job of retaining specific sources and details, but at this point in my life I’m going to roll with my strengths and not worry too much about my deficits.  (That’s a shout-out to all my strengths-based leadership friends!)

I realize that most people lack the time to invest that I do in exploring ideas, whether through reading online newsletters, networking, or otherwise pursuing new developments.  I hope to provide a brief series of posts, here, to capture a few key elements, as I think they might relate to administrators at branch campuses or other small public and private institutions.

I recommend that anyone interested in emerging change subscribe to at least two online resources that I check out every day.  The first is Inside Higher Ed, which I find more valuable to administrators than The Chronicle of Higher Education, although I do subscribe to it, as well. 

You can check out Inside Higher Ed at www.insidehighered.com, and subscriptions to the Daily Update are free.  Inside Higher Ed also supports some useful groups on LinkedIn, and the Update includes a number of interesting bloggers.  My favorite blog is called “Confessions of a Community College Dean.”

Just today, the Update had an interesting story on MOOCs and one that covers a recent study suggesting that there is very little connection between what an institution spends on students and the quality of the education they receive.  There also is an interview with Randy Best, CEO of Academic Partnerships, which just announced a new initiative, called MOOC2Degree.  It is an interesting new idea for awarding credit and attracting students to enroll in online degree programs.

Academic Partnerships is a company that works with public universities to create and market relatively large online programs.  I worked with them, when I was at Ohio University, and, although the partnership was challenging to manage, it also was instructive and successful in attractive several thousand students to our online RN to BSN program.  Randy is innovative, entertaining, and frequently controversial.  The Q and A definitely helps explain the MOOC2Degree initiative.

The second resource is the “Professional, Continuing and Online Education Update by UPCEA,” which is at http://continuingedupdate.blogspot.com/.  It typically provides links to three articles, usually related to online learning.  Some of them can be quite thought-provoking, such as one today, titled, “The End of the University as We Know It,” by Nathan Harden, for the American Interest.  It is long, but makes an interesting argument.  (The particular piece is at http://the-american-interest.com/article.cfm?piece=1352.)

Anyone who hopes to understand and compete effectively in the emerging new world of higher education needs to invest at least a little time in studying trends.  I hope this blog is of help to those in the branch campus world, which can be part of a thoughtful institutional strategy, but also will be challenged to adapt to the educational and potential financial advantages of online options.

Revisiting "Characteristics of Branch Campuses"

By far the most read post on this blog is titled Characteristics of Branch Campuses, and it was posted July 11, 2007.  If you want to read it, you can find it at http://branchcampus.blogspot.com/2007/07/characteristics-of-branch-campus.html.  Be warned:  When I first started posting, I wrote some relatively long entries.

One of the challenges in writing about branch campuses, never mind building a base of research on branches, is the lack of clear definitions or a shared understanding of what makes something a branch.  My piece on “characteristics” was an attempt to describe what I called an “idealized” branch, but there are many, many variations across the country.

A few days ago, I saw a list of “10 Satellite Campuses With Impressive Reputations All Their Own” on a site called thebestcolleges.org.  (http://www.thebestcolleges.org/?s=satellite)  I’m familiar with nearly all of these campuses, and there are interesting stories all around.  But calling some of them “branches” seems a stretch.

For example, Indiana University-Purdue University Indianapolis is on the list, and I would insist that it is not a branch campus, by any reasonable definition.  It enrolls 30,000 students, in more than 200 programs, through 21 schools and academic units, according to its web site.  Similarly, they list the University of Michigan-Flint as a branch; they list another “campus” that is fully digital (hardly distinctive today), and still another that is a summer abroad study center, located in Europe.

I also have a complaint about all the attention recently to elite universities opening overseas branches.  Well, it isn’t the attention so much as the impression some articles leave that “international branch” and “branch” are synonyms.  I’m definitely interested in the trend, as well as the challenges and opportunities they create, but I’ve found many of the stories misleading about the branch world.

My bottom line on this is that the need for good research and shared vocabulary about branch campuses grows stronger all the time.  Fortunately, NABCA has been encouraging more research, and that work has progressed well from year to year.  Once we can agree on the defining characteristics of branches and begin to get a handle on best practices, maybe the critical contributions they make to higher education can be better appreciated. 

I maintain that branches are a unique delivery form of higher education, with some specific advantages for important populations.  Yet, the lack of connection and awareness of just how pervasive “satellite” operations really are is not helpful to encouraging branch development and growth.  I’m not worried about thebestcolleges.org, but I am concerned about helping branch campuses do well.

Competitive Advantages for Branch Campuses

No matter how much disruption and change I see coming, I want branch campuses to thrive.  Long before I explored the concept of disruptive change, I argued that university branch campuses, at least in Ohio, had many advantages over main campuses, especially for first generation students, adult learners, and others for whom we were a good fit.  Moreover, branches offer opportunity and support that are important to many people, and they tend to engage with their communities in meaningful ways.

Today, I believe branches continue to have an important role, although exactly how it is expressed may change in significant ways.  The catch is that branches face so much more competition and risk than ever before.  As a result, I expect to see some branches go under, even as new branches are created. 

Successful branches will do a great job of market research and position themselves to serve specific audiences.  Although they will excel at service (see my earlier post), they will maintain focus on those services that clearly impact recruitment and retention.

Successful branches will be careful about space and overhead costs.  Today, branches compete with online programs and other options.  As financial models emerge that drive down tuition, spending with no demonstrable impact on student success could be fatal.  In addition, as online options become more attractive, branches will move toward emphasizing hybrid courses, in order to compete.  In fact, if all of your classes were hybrid, you could effectively double your current classroom inventory.

Led thoughtfully, branch campuses have specific advantages in relation to competitors.  Their physical presence demonstrates commitment, and many people will value the ability to stop in for any number of reasons.  Your presence won’t offset significantly higher prices or the absence of a highly desired program, but locating key staff and at least some faculty members in a community should be a plus.

No one knows exactly where higher education is headed, but I don’t believe everything will be online.  Many courses and programs will have labs or occasional residencies, and support for research, tutoring, and evaluation will continue to involve facilities, at least for most students.  I also believe that people will sometimes want to speak directly with a staff member about some issue, and we know that students benefit from personal time with faculty members. 

You may, over time, find changes in exactly how you staff for services, not to mention how you appoint resident faculty, but creative people should be able to make the case for their physical presence.  Note also that, if you are teaching online, you can just as well be located at a branch campus as the main campus or somewhere out in the ether.  Just because you can be anywhere doesn’t mean you must be at a distance.  I suggest you consider the possibility of branch campus faculty members dividing their teaching loads between local needs and online programs.  That will support maintaining a local presence while dividing the cost more widely.

Competition for Established Branch Campuses

I love competition and the challenge of growing enrollment and budgets.  I enjoy all the elements, at least as I’ve experienced them.  Marketing releases lots of creative energy, and the challenge of continuously improving institutional processes appeals to the puzzle solver in me.  I also believe that branches tend to do best when they develop strong internal and external partnerships, and partnership development has been one of my most enjoyable experiences.

In this context, I’ve been thinking about the competitive pressures faced by those branch campuses that have been around for a while.  For several generations, institutions created branch campuses as a vehicle to expand access and draw additional enrollment.  I’ve often said it is a holy mission, providing opportunity to people who otherwise would not be able to realize their educational dreams.

These branches tended to be in small cities or either in the suburbs or the downtown area of cities, depending on where the main campus was located.  For decades, the practical limits of commuting distance meant that a branch, or any other commuter campus, could recruit effectively over about a 30-mile radius.  Sometimes, branches and other institutions have overlapping circumferences, but until recently, most campuses had relatively clear service areas.

It’s not that way anymore.  At this point, I hear people talking about two challenging trends.  One is the emergence of fully online or very limited residency programs that blow away any concern about a 30-mile commuting distance.  As I’ve written before, I think branches can compete against fully online programs, but it requires adjusting some of their traditional practices.

The other challenge is more complicated to describe.  The trend seems to be that many institutions are developing outreach centers or sites that are relatively low cost, but intended to draw new enrollments to specific programs.  One example involves small private non-profits that are fighting enrollment and endowment declines and recognize the need to attract more adult learners to their institutions.  There is nothing wrong with these moves, but they definitely have gotten the attention of leaders at some more established branch campuses with whom I speak.

For all that, the greatest threat to many branch campuses will not come from other providers.  It will come from their own main campus, as the powers-that-be are attracted to the cost and efficiency of their own online programs and consider branch campuses to be an unwelcome competitor.  (In fact, branches and fully online programs can enhance each other, attracting somewhat different student markets.)  Watch your back and develop strong internal partnerships that demonstrate how you can help generate institutional revenue!

A Workshop Opportunity to Explore the Encore Stage

Please forgive me for this “brief commercial message,” which I’m posting on both of my blogs.

For the past couple of years, I have engaged in one of the most satisfying professional experiences of my life:  The exploration and pursuit of my encore career.  After “retiring” from university administration, I became a consultant and certified professional coach, while rebalancing the elements of my life to bring the renewed sense of purpose that may be the hallmark of the Baby Boomer generation.

Now, in collaboration with my fellow coaching colleague, Yvonne Ulmer, I am pleased to announce a workshop for people who seek fresh opportunities in the second half of life.  From December 6-8, in St. Petersburg, Florida, Yvonne and I invite you to share in a three-day retreat, in which you can reflect, explore and begin designing your own encore experience.

The retreat will be held at the Postcard Inn, on beautiful St. Petersburg Beach, beginning on Thursday evening, and finishing at noon, on Saturday.  You might want to come early or extend your stay, as a great pre-holiday getaway.  The fee for the workshop is only $500 and that includes two assessments that you will complete online, before you come to the retreat.

During our three days together, you will develop a personal vision of your ideal life, both professionally and personally.  You will receive feedback on your assessments and learn how your personality and individual strengths are critical elements in finding that purpose and passion that can launch you toward the future.  By the end of the three days, you will have designed that future life and created an action plan to get your started.

The intended audience is anyone who may be approaching a planned on unplanned retirement, but wants more than a life of leisure, as well as individuals who may be more nearly mid-career, but seek a change in direction.  Check out our workshop flier, at http://www.yvonneulmer.com/docs/CenterStageAct2Encore.pdf.  From there, you can find links to register, reserve a room at the hotel, and see more about the backgrounds of your presenters.  Of course, if you think the workshop might be of interest to friends or co-workers, please feel free to pass along the information.  If you have questions, you can contact either Yvonne or me, and our email addresses are on the flier, as well as on our individual web sites.

If it turns out that you are more interested in a one-on-one coaching relationship, both Yvonne and I welcome new clients.  Get in touch with either of us to discuss how we work with clients to support their encore careers, professional development, or leadership challenges.