Navigating a Program Closure

Recent headlines have pointed to widespread elimination of majors at rural colleges and liberal arts institutions, but the reality is, program closures occur at all types of institutions. This includes business schools, which are typically revenue generators for universities and often considered “safe” from big cuts. Today, all of higher education is seeing the full effects of the pandemic, while the demographic cliff looms on the horizon. Cuts to majors, minors and departments will persist.

For students, administrators, faculty and staff, the process of closing a program is incredibly complex and emotional, with the practical concerns of some stakeholders occasionally at odds with those of the administration. These realities can make cutting any program particularly challenging to manage. And the stakes are as high for students, faculty and staff as they are for the leaders charged with making these decisions. Administrators who have recommended programmatic cuts have on occasion been forced to resign themselves.

In 2017, we closed our full-time master of business administration program at the University of Iowa’s Tippie College of Business. The market had been declining for more than 10 years, and data showed that keeping the program was not financially wise or sustainable.

Oftentimes such a decision results in furloughs and layoffs, triggering distrust and impacting morale in remaining programs. But we sought a different way to approach it. The market research that informed our decision to let go of the full-time M.B.A. also revealed capacity and expertise to introduce new, in-demand programs, like master’s degrees in finance and business analytics and an online M.B.A. This reality allowed opportunities for our existing talent to serve in new roles (at equal or higher pay) that would serve a greater number of students in growing areas of study. In the first year after closing our full-time M.B.A., faculty and staff retention was 100 percent. There were no layoffs, and no employees of the program left the college on their own during that time. In many ways, we were lucky that other opportunities existed, but our approach to closing the program also made a difference in achieving these positive outcomes. Although no two situations are the same—and while as a college we were fortunate to have options others may not have—much of what worked well for us during the process can be employed elsewhere. We utilized four transferable principles that guided our decision-making and work.

Use Time and Data Strategically

Closing a program should not be a quick decision. Not only is it poor practice generally, it also complicates the ability to be transparent with stakeholders. Truly informed decision-making should consider multiple data sets covering a long period of time. At Tippie, we made numerous changes to the full-time M.B.A. program for a decade in an effort to improve its viability, but it still struggled. We also considered 10 years of institutional and market data on enrollment, alongside extensive benchmarking and forecasting.

Employing a market research firm to gather these kinds of data early in your analysis can be helpful. And it’s important to remember that bringing in a third party should be used to enhance transparency. They can partner with you to provide faculty governance groups and advisory boards with information critical to the decision-making process, not to obscure it. There’s a fine line here that must be balanced to achieve buy-in and support.

Set the Bar for Closure as High as Possible, but Prepare to Pivot

When considering a program closure, the threshold for eliminating a major or department should be very high and should consider a number of factors. There’s too much at risk if reasonable efforts to avoid a closure are not exhausted. That’s why it’s not uncommon to see institutions reinvest in a program before eventually having to close it. Is your marketing for the program robust? Are there curricular or administrative policies that function as barriers to student enrollment? Are you soliciting feedback from focus groups, advisory boards and market research and then implementing those findings? Consider ways to be creative in the short term and, if necessary, pivot in the longer term.

In our case, the M.B.A. wasn’t dead. Our part-time M.B.A. program for working professionals was and is growing and thriving. Students still need and want to learn advanced business principles of financial accounting, analytics, marketing and management in order to advance in their careers. But many prospective full-time M.B.A. student candidates didn’t want to quit their jobs, move to Iowa and take on debt. They wanted the degree, but they wanted an evolved delivery model.

In higher education there is a tendency to only add programs and delivery models and never subtract (unless in a full-blown financial crisis). With careful and creative strategic planning over many years, it can be possible to sunset a program while opening new avenues to better serve students.

Take the Long View

Just like the decision to close a program shouldn’t be a quick one, the outlook shouldn’t be shortsighted. Transitions and the benefits realized from them take time. In deciding to redeploy our current staff at the same or higher salaries, we knew we wouldn’t see an immediate cost savings. Instead, we built credibility and good faith with our faculty and staff that yielded return on investment over time. Great people stayed and ensured our new programs were strong. Having people in place who knew the institution, our culture and our programmatic quality smoothed the transition and ultimately helped to make the shift successful.

Communicate With Compassion

In addition to demonstrating the business case for program closures, it’s critical to honor the range of emotional responses from faculty, staff, students, employers, regents and alumni. This means having a comprehensive communication plan in place for all audiences that lays out logical and data-driven reasons for the decision while also acknowledging the range of emotions people may feel. Keep in mind that what feels good on paper—like being able to offer staff members a new job assignment—may still trigger strong emotions from the people being impacted. Taking time to put yourself in the shoes of your audience will aid communicating with compassion. This doesn’t mean that the decisions will be different, but extra time and care may be necessary to help stakeholders work through the emotions of the transition. Anticipate and pre-emptively address as many of these concerns as possible and preserve time during the process for responding to concerns by email and phone. If necessary, set up a triage system so that every message is heard and receives a response.

As higher education curricula continue to shift in response to market realities, more leaders will be faced with tough decisions about how to serve students and meet the needs of the workforce. It’s never going to be an easy task because change isn’t easy. But curricular innovation and a strategic, thoughtful approach can help smooth the transition for everyone.