From Rachel Toor, Sandboxer-in-Chief
As institutions risk financial ruin, there will be winners and losers. This week I share a conversation I had with a president about the toll of being asked (and asked and asked) to merge.
And later in the issue, co-Sandboxer Doug Lederman steps up to bat. He's been catching news pitches for many seasons and knows all the signs. Now's he's going to call 'em as he sees 'em. Including crying foul on sports metaphors that go afield.
The title of his section (which I wanted to call "Doug Spouts Off") is a nod to the name he gave the sports column he wrote in college. He brought it up as a joke, but I loved it.
As for me, my understanding of MLB is limited to one season watching the Mets (1986) and dating a Cy Young award winner (when we met, I asked what position he'd played). My own college president went on to fire Pete Rose and wrote my favorite piece on the game.
But on to some inside higher ed baseball.
While, yes, leaders have bad news fatigue, The Sandbox can't be all Golden Bachelor (tarnished!), arch literary references, and pet photos. We also want to bring you expert advice from a highly selective bunch of smarty-pants analysts we know well enough to ask for favors and trust to tell it to you straight.
Current IHE members were treated to a webcast conversation with Doug and Rick Staisloff of rpkGROUP about the realities of the higher ed financial landscape. Insiders can watch this at their leisure.
Here are some big takeaways from Rick:
- In setting budgets, institutions need to operate with complete acceptance of both the historic trends and reasonable projections, and adopt an approach of full transparency. Perpetuating unrealistic projections on enrollment, tuition discounting, and inflationary costs is irresponsible, and can cause an institution to lose time in accepting and planning toward a necessary transition in their operations.
- Institutions need to act as early as possible when they see a long-term deterioration in their financial health (as opposed to a "speed bump"). This allows them to act from the greatest position of strength, maximize the time for a smooth transition for students, and preserve their remaining assets so that they are available to support the transition.
- We have to move to away from the idea of “rescuing” institutions that no longer have, nor are able to create, a sustainable business model. As an industry and a society, we will be better off if we accept the hard truth that the decade(s) ahead will result in a decline in the number of institutions through closures and mergers.
- The worst result for students will be to experience a sudden closure of an institution—unfortunately, the most common outcome currently. Far better to recognize that the best way to bring the mission forward and to serve students is to place that mission and those students in the hands of another, stronger institution. This acceptance does not ignore the pain and the loss associated with institutional closures. That said, a hallmark of good leadership is the ability to recognize hard truths and act from those truths.
Rick and Doug weren't able to get to all the (anonymous) questions from the audience, so we may do this again. If there are things you want to contribute or questions you want to ask, write to me.
And, if you see a fork in the road, friends, take it. Or at least, enjoy all the feels watching the documentary about Yogi Berra on Netflix. (Was Jackie Robinson safe?)