Business issues

Sustaining the liberal arts requires organizational restructuring (essay)

Over the last few years, there has been no shortage of news coverage and commentary remarking on the seemingly real or perhaps only greatly exaggerated death of the liberal arts in American higher education.

We are not alone in thinking that the debate about the relevance of the liberal arts is tired and simplistic. To our minds, the liberal arts are as relevant as ever -- as a means of enriching lives, developing engaged citizens and nurturing foundational professional skills.

But if the public, rightly or wrongly, is becoming increasingly skeptical of the value of the liberal arts -- and enrollment trends at certain institutions would suggest that they may be, at least in some measure -- then schools of liberal arts will have to accept some share of the blame themselves.

Undoubtedly, public pronouncements arguing that we need “more welders and less philosophers,” as former presidential candidate Marco Rubio claimed late last year, irk many in the liberal arts -- and not solely because of Rubio’s poor use of grammar. This notion that liberal arts graduates are terminally unemployable is achieving a kind of -- to borrow Stephen Colbert’s famous neologism -- truthiness. And that kind of misinformation can be particularly frustrating to faculty members and students who have devoted their energy and enthusiasm to these fields of study, and enjoyed successful careers as a result of it.

The fact is, as researchers in the field of employability will tell you, a great many organizations have a real interest in hiring college graduates possessing communication and reasoning skills blended with technical expertise and strong character. In an Inside Higher Ed commentary from early 2016, Burning Glass CEO Matthew Sigelman argued that his firm’s research on labor demand has shown that many of the fastest-growing jobs are hybrid in character, requiring “people who can bridge domains and synthesize ideas.” Few would argue that the liberal arts don’t have a contribution to make in producing these sorts of graduates.

Still, frustrating though they may be, news headlines and political commentary aren’t the real obstacles to sustaining the future of the liberal arts. That challenge has less to do with media perceptions or careless politicizing than with the traditional organizational structures and curricular approaches of schools of liberal arts themselves. Here’s what we mean.

Departmental structures can be inflexible and inhibit creative responses to changing market expectations. At a number of liberal arts institutions we work with, faculty express great interest in interdisciplinary work and other forms of innovation. In some respects they find organizational structures -- the proliferation of schools, departments, divisions, units -- just as frustrating and inhibiting as administrators do. But when faculty become uneasy with the tenor of the public debate about the contribution of the liberal arts and feel threatened, they often rely on these structures as a bulwark against change. Others may resist on principle any movement that might be perceived as moving in the direction of vocationalism or focusing on work readiness associated with linking the liberal arts to professional programs.

In both cases, the result can be the same: faculty hunker down. They look at the growth of faculty lines in engineering or business and argue that their departments would grow, too -- if only similar investments were made in their faculty. Of course, increasing capacity doesn’t automatically increase enrollments. Yet for those individuals, the fight for resources is viewed as a zero-sum game, and some faculty members and department chairs would seek to preserve the structures that they know rather than risk reorganizing in ways that merge departments or explicitly require collaboration with the professional disciplines -- even if such changes might deliver more value to students. But of course, such mergers and collaborations are possible where adjacent disciplines complement one another -- such as writing and English programs or communications and performing arts. Restructurings of these sorts can not only avoid unnecessary redundancies in staff positions and other organizational overhead, but also foster the development of a more contemporary curriculum and enrich the student experience.

Departmental structures can constrain the evolution and effectiveness of general-education curricula. As the volume of majors in the liberal arts disciplines continues to fluctuate, general education programs may be seen as an increasingly powerful mechanism to promote traditional liberal arts values. But they can also offer students new forms of interdisciplinary intellectual exposure via minors or other ways of bundling sequences of courses.

For departments with declining majors, general-education course enrollments are frequently seen by faculty as crucial evidence of their value. As a result, there is often resistance by faculty members and department chairs to restructuring general-education programs in ways that might deviate from the more immediately measurable performance models based on numbers of department majors -- even if such restructurings may lead to more relevant and flexible curricula for students. For example, while the contemporary student may derive significant value from experiential learning components and interdisciplinary capstone courses, their inclusion in general-education programs is often met with resistance by faculty as they fall outside the traditional disciplinary or departmental structure.

Departmental structures can necessitate organizational workarounds, such as the creation of interdisciplinary liberal arts centers or institutes, to find a home for innovation. While interdisciplinary centers or institutes can serve as vital catalysts for innovation and collaboration across the disciplines, merely establishing them will not necessarily overcome the force of decades of departmentally focused priorities. As a result, these interdisciplinary centers can sometimes evolve into isolated interdisciplinary silos. Indeed, the lack or perceived lack of incentives for faculty involvement, a misalignment with departmental promotional criteria and the absence of clear expectations with respect to the roles that particular departments or disciplines are meant to play in these centers can all contribute to their eventual marginalization and failure -- which can make it even more challenging to recruit and retain high-potential faculty. Paying lip service to interdisciplinarity isn’t sufficient. In fact, it just exacerbates tensions between units and can make numerous departments less productive. What’s required is a commitment to interdisciplinarity and the centers that promote it as hubs of cross-discipline engagement, for faculty and students alike.

Our view is that the liberal arts matter. Why? Because they prepare students to reason and solve problems, because they develop critical communication skills, and because they teach students how to engage in a process of discovery -- whether it be intellectual discovery, self-discovery or professional discovery. If schools of liberal arts put these same skills to work in examining their own efforts and organizational structures, the liberal arts might well flourish.

Such schools would be more apt to bring together data analytics and the study of literature, or revolutionize the way they think about the role and contribution of general-education programs, or promote liberal arts minors for engineers and biologists in lieu of fighting for more majors within the liberal arts. They might, in other words, rethink the longstanding organizational structures that have housed -- and for many years nurtured -- the liberal arts, but which have now begun to constrain and limit their impact.

Peter Stokes is a managing director and Chris Slatter is a manager in the higher education practice at Huron Consulting Group.

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Moody's: Grad Student Unionization 'Credit Negative'

Graduate student workers' newly won right to unionize at private universities is a ding on those institutions' credit, Moody's Investors Service said Thursday.

Moody's called last week's National Labor Relations Board ruling, which awarded the unionization rights, a credit negative. That means it is one of many credit factors affecting institutions but is not a change in any credit rating or outlook.

The ruling comes at a time of increased financial stress for institutions. Research funding costs are increasing, tuition prices are under pressure and endowments face declines in value, Moody's said. Graduate students are also becoming more important to higher education's business model. However, the ratings agency went on to note that large, research-intensive universities will be most affected by the ruling -- and those institutions tend to be wealthier and are best situated to absorb higher costs and wages from unionization.

Since most graduate student assistants are enrolled at public universities governed by state labor law and not covered under the ruling, the NLRB's decision affects fewer than 78,000 graduate assistants, Moody's estimated. It said about 40 percent of graduate assistants in private higher education are at just 10 universities: Boston, Carnegie Mellon, Columbia, Cornell, Harvard, Johns Hopkins, Stanford and Yale Universities, the Massachusetts Institute of Technology, and the University of Southern California. Increasing the average wage for graduate teaching assistants at those universities would cost each one between $7 million and $11 million annually, Moody's estimated. The increase would be the equivalent of less than 1 percent of each institution's operating expenses.

However, Moody's also pointed out that institutions more moderate in size and means will be pushed to boost their graduate assistant compensation to keep up with larger competitors.

"Increased graduate assistant compensation or a material change in workload could cause modest pressure on operating performance," Moody's wrote. "Since universities with large graduate populations tend to compete nationally, if not internationally, the actions of their peers will outweigh regional standards in shaping the potential financial effects."

Study finds public master's institutions are efficient

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New research on public master's universities finds that they are generally efficient, but economies of scale favor undergraduate over graduate education.

Erskine to explore splitting off seminary

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Erskine, after years of debates over religious issues and academic freedom, may sever a liberal arts institution and a theological one.

Advice for senior administrators dealing with financial challenges (essay)

Barbara McFadden Allen, Robin Kaler and Ruth Watkins describe a hypothetical but very common situation for many administrators today -- and offer some suggestions for how to tackle it.

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How to fix a struggling, and hypothetical, small college (essay)

Just over two years ago, I wrote to the campus community to reveal the dire financial situation of our college. It is painful to recall the details, but revenues were falling, we were in serious debt and we had no viable plan for paying off what we owed in order to move forward as an institution.

After 24 months of difficult decisions and sometimes painful implementations, today I am both pleased and proud to tell you that St. Bridget’s is well on the way to reversing our indebtedness and putting the college on a solid financial footing. As part of this process, we are modernizing and streamlining the college to face the rest of the 21st century.

It has not been easy, and I thank all members of the community who took the time to understand our situation, contributed ideas and supported the sometimes painful, radical change that was necessary to save our college.

Part 1 of This Series
In an earlier essay, Aden Hayes
suggested that many small
colleges are kidding themselves
about their financial viability, and
imagined the conversation they
should be having. Read more.

In June 2015, the Board of Trustees met to discuss our very difficult situation and to make major decisions. It was decided -- correctly, I think -- that the college needed fundamental changes, and not simply a fund-raising effort to “Save St. Bridget’s.”

At its meeting two years ago the board recognized that we faced major challenges and felt that all of us -- including me -- needed advice, counsel and guidance in achieving the turnaround we all sought.

The board approved the retention of an experienced, nonprofit consultancy to help us strategize. But it was the board’s call to the entire college community to step forward with ideas, with energy and with inspiration that really set us on the right track.

With the help of faculty members, administration, students and our strategic consultancy partners, we have together achieved marvelous results:

Outreach. Our first goal was to reverse declining enrollments and a low yield rate. Of the five administrative positions that were eliminated as part of our restructuring plan, three professionals transitioned to the newly expanded and fortified office of St. Bridget’s Outreach.

The initiatives undertaken by this office are most impressive: presentations at more than 200 high schools in our state and in other parts of the Northeast; a highly successful online information campaign involving social media; the naming of five St. Bridget’s seniors as brand ambassadors with responsibility for outreach not just through local high schools but via clubs, sports teams, young enterprise projects and other affinity groupings; the establishment of a permanent representative of the college in the largest city in our state with responsibility for communication to high schools, interaction with media, assistance to college personnel and students when they visit the city, and serving as institutional ambassador.

Study abroad. Eighteen months ago we transferred our tiny study abroad program from London -- where it competed with nearly 80 other U.S. college and university programs -- to Sanya, on Hainan Island, China, a beautiful, small university city. We have partnered with Quingzhou University, and changed our model from exclusively classroom study to intensive Mandarin and Chinese culture classes combined with internships at local companies and organizations. This has proved to be a very popular option, and we have moved from barely breaking even with our own students in London to hosting young people from seven U.S. colleges in our new program, set to increase to 12 partner colleges in 2018.

In addition to being much more practically oriented than the London classroom and library experience, our Sanya program represents a significant source of income for St. Bridget’s and is on target to position us among the leaders in experiential education in China.

Teacher training. Working closely with our nonprofit consultancy and the St. Bridget’s Education Department, our education major has received a significant upgrade. Students now do a full major in an academic field, in addition to their education courses and teacher training. This has resulted in a significant strengthening of both the Education Department and the major. We have partnered with six local school districts to receive our students as practice teachers in their final year of study, and of the 41 St. Bridget’s seniors who did their practice teaching this year in our partner school districts, 35 have received job offers to start full time in August.

Part-time adult learners. We have established an office dedicated to adult learners from the surrounding community, including active-duty service personnel and spouses at nearby Fort George Patton. We have applied to be placed on the approved list of institutions under the Military Tuition Assistance Act, whereby the Department of Defense pays tuition and fees directly to the college, for approved courses.

Using the validation and accreditation criteria of Excelsior College, we have begun to accept credits for learning done outside the traditional, four-year residential college system. This will be especially important for our adult learners seeking a St. Bridget’s degree.

Online learning. St. Bridget’s has joined the Liberal Arts Consortium for Online Learning, and we have incorporated Coursera content into two of our highest-enrollment courses, American History and The American System of Justice. Plans are underway to use Coursera in at least five more popular courses, which will produce significant savings in instruction costs in those courses, and free up faculty to provide a wider range of courses in their specialties, or for other teaching and administrative duties on campus.

Equally important, Professors Smith and Higgenbottom of the St. Bridget’s Biology Department are at work with colleagues from two other regional liberal arts college to produce a complete, online Fundamentals of Biology course aimed at nontraditional learners. This initiative, and its spin-offs, may bring significant revenue to our college.

Centralized purchasing. We have partnered with an agency whose sole job is purchasing for more than 100 college campuses across the Northeast. With their economies of scale, they are able to receive price discounts that we could never achieve on our own. As a result, academic departments are no longer responsible for their own purchasing, and everything from paper to toner to ballpoint pens is now uniform across campus. As soon as stocks are exhausted and need to be replaced, this will run to whiteboards, laser pointers and other durable goods.

Generating nontraditional revenue. We have sold All Saints Hall to a Singapore investment fund and leased it back at a stable rent for a period of 10 years with an option for a further 25 years. And we plan to sell two more college buildings within the next year. This initiative alone is programmed to bring in $2.5 million in the period through June 2018.

Outsourcing. We have contracted for many campus services, including landscaping and snow removal, so that we pay for these services only as we need them. We have sold all landscaping and snow removal equipment to the contracted firm, generating revenue in the five figures.

Enrollment upgrade. Working with our consultant partners, we have upgraded our enrollment software and streamlined the application process. Prospective students now automatically get individualized follow-up communication tailored to their academic interests and are put into contact with faculty in the areas where they might study. All this has meant a much more personalized application and acceptance process, and I am pleased to say that this past spring we admitted approximately the same number of students as we did two years ago, but the yield rose from 35 to 68 percent -- a significant increase in the number of students who have committed to St. Bridget’s for the coming fall.

Our streamlining has necessitated some difficult decisions that affected our community:

We have closed two academic programs that had been underenrolled for years -- including the interdisciplinary program in Northeast Studies, which competed directly with a similar program at the nearby state university. Three departments had their majors eliminated -- German, anthropology and creative writing -- and were merged into one service department providing 100- and 200-level courses to fulfill the college’s general education requirements.

Nine faculty positions were eliminated, and some of these faculty members found other academic jobs outside St. Bridget’s. For six who did not, the college contracted a professional counseling and coaching service specializing in transitions from the academic to the private sector.

Those are some of the initiatives we have undertaken in the past two years. But we are not stopping there. By June of 2018 I hope to announce more major changes, at least in the following areas:

We will be merging all foreign languages into a single department. At least two foreign language majors will be eliminated, and these languages will become service departments. They will take the initiative to partner with stronger departments to add language skills to business, education, psychology, criminal justice and possibly other majors. I emphasize that this initiative must be led from the departments themselves, not directed from my office.

The provost, the Academic Affairs Committee and I will begin to look at the research interests and production of faculty members, particularly in the humanities, with a view to encouraging these interests to become more closely aligned with teaching duties. We want research to result in more effective teachers, and research at St. Bridget’s should be aimed, first and foremost, at improving instruction on our campus, and these priorities will be taken into consideration in tenure and promotion decisions.

Research and publication will benefit faculty members at other institutions only insofar as their aims, like ours, are laser focused on the highest-quality teaching performance.

Under the guidance of our consultants, we are looking into joining an online library consortium, using the collection of Johns Hopkins University, one of the top-ranked institutions in the nation. This will reduce the need for new book purchases and eliminate subscriptions to very expensive scientific journals. For the time being, the current library will continue to operate as a basic study resource with a skeletal staff.

As I said earlier, we plan to sell and then lease back two more buildings on campus and are in the process of determining which those will be.

We are also determined to move the few St. Bridget’s sports teams still competing in Division II to Division III. Athletic scholarships will be eliminated, and we plan to apply the savings achieved to strengthen intramural and club sports, with a view to participation by a maximum numbers of students, at a wide range of skill levels.

At the suggestion of Professor Kim of the Computer Science Department, we have decided to change the configuration of several college office buildings to free up space. Although this is still in the planning stages, it is our vision that only heads of administrative departments and chairs of academic departments will have private offices. All other staff will share open spaces for university-related duties, and they will be assigned desks based upon need. Conference rooms will be available for professors’ office hours as well as other meetings, and these will be assigned on a full-semester or one-time basis. Following a trend in the IT and other industries, the college is contemplating a one-time subvention for faculty to set up home offices.

There will be more initiatives for the improvement and streamlining of our college, and I look forward to working with you on these, in due course. Meanwhile, I again thank the entire St. Bridget’s College community for its help, support and enthusiasm in our turnaround.

Aden Hayes is executive director of the Foundation for Practical Education.

As institutions outsource they should keep their mission -- and the vendor -- close

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What factors should institutions weigh as they consider outsourcing services?

Moody's reports portray stabilizing higher ed finance picture

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Moody's reports find fiscal stress generally moderating for higher education institutions in 2014, but 1 in 5 colleges remain vulnerable. The have/have-not gap widens.

Small private colleges need to confront their financial viability (essay)

The announcement of the closing of Marian Court College, with faculty disclaimers (“didn’t realize it was as dire as it was,” and the president’s dreaming (“hopeful the college would remain open”), should pull us back to the realities that have been set out very clearly for years -- by the Bain Report, by Clayton Christensen, by Thomas Frey, by Nathan Harden, by dozens of others:

Many, many colleges are working with a business model that simply cannot sustain them, and tinkering around the edges with defective enrollment management software, combined majors, a part-time (as yet unaccredited) M.B.A., or Saturday classes is almost a distraction from the main challenges of shrinking demographics, low-cost online instruction and skills validation, and the imminent tightening of government money that has been pouring into the mix.

The problem is compounded because so many college leaders can barely discern the symptoms of the malaise and are blind to their underlying, rampant and immutable causes. It is only natural that those who have trained to manage the status quo first and foremost long for its return. In no other industry -- with the possible exception of organized religion -- is so much wealth entrusted to people so unequipped to manage it.

The shock is not that the college closed -- it is that no one saw it coming.

But Marian Court was not unique. It was among the country’s vulnerable institutions, and there are hundreds of them: tuition dependent, with enrollments under 1,000, small or shrinking endowments, significant tuition discounts, high admission rates with low yields, and low retention rates.

St. Bridget’s also fits these metrics. It is a private, coeducational, not-for-profit liberal arts college in the Northeastern U.S.: a fictional composite based on real institutions like Marian Court -- some now closed and some that will close, although they don’t know it yet.

What all have in common is the lack of a full grasp of their true financial situations.

As at St. Bridget’s, at many institutions the administration and even the Board of Trustees will claim they did not have all the necessary data and did not recognize the looming threat to the college until it was too late.

And faculty -- who work with research and analysis every day in their professional lives -- may not have asked the right questions, or did not insist on honest and complete answers.

How many could not bear to put aside that tenure-track research on Theosophy or the ring-tail lemur to learn about boring subjects like deferred maintenance, debt overhang and bond interest rates? Surely some were living on hope: “next year our enrollment numbers will be up,” or “we’re in line for that federal grant that will help us attract veterans.”

Others may simply have been in denial. (How many women’s colleges have stated categorically, “We are not like Sweet Briar”?) But questions of financial health are of vital concern not only to presidents and chief financial officers, but to all whose lives are tied to the college. And any lack of focus is doubly distressing because there exist rough but impartial guides and stress tests that are open to all and can indicate, in general terms, a college’s level of strength or weakness.

But until all constituents consider the future of the campus to be their future, we will see more cases -- certainly dozens, probably hundreds -- like Marian Court (and St. Bridget’s). And more academic professionals will be reading untimely and distressing letters like this one:

From the President of St. Bridget’s College to the College Community

Regrettably, I have bad news about the financial situation of our college.

You all know of our difficulties. Reflecting the numbers from earlier years, last year we accepted 75 percent of all applicants, but only 35 percent of those accepted actually matriculated. And we lost 23 percent of those after their first year. In order to attract qualified students to St. Bridget’s, we had to offer discounts averaging 51 percent of tuition and fees.

In spite of our best measures, our enrollment has dropped by 38 percent over the past five years. Nevertheless, the structure of the college remained the same, and we added some administrative positions to stay within best practice and the law mandated from Washington.

When I took office eight months ago I discovered that the college’s finances were not as they had been painted. On the surface, it looked like we were breaking even: just covering our expenses with tuition-derived income.

But we were misleading ourselves.

During our past fiscal year, while the U.S. stock market rose by nearly 14 percent and the average college endowment earned 15.5 percent, the St. Bridget’s endowment showed an increase of only 2 percent.

In fact, we were spending all tuition revenues and nearly all the income generated by the endowment to keep the college operating. For the past three years, as enrollment dropped, we depended on earnings from our endowment in a strong stock market just to stay alive.

We don’t know if the past president understood this, nor do we know if the question was ever raised in a board meeting.

But now the stock market is weakening. As I’d like to think you all know, following five years of nearly free funds, the Federal Reserve has decided to tighten money supply and raise interest rates. The stock market is losing momentum; our endowment is generating a fraction of last year’s income; student loans will become more costly; and even fewer parents are comfortable borrowing $25,000 to $30,000 per year for a St. Bridget’s education.

We now find ourselves with an operating shortfall of nearly $4 million for this fiscal year. We also have bonds coming due in the amount of $1.5 million, and deferred maintenance on our physical plant that will cost upwards of $750,000. If we pay all this out of our endowment, we deplete that fund by more than one-third and severely limit its ability to generate income in the future.

Moreover, within our current structural model it will be impossible to find savings of $4 million beginning in the next fiscal year, in order to urgently balance the books. To accomplish savings of this magnitude will, at very least, require radical and immediate surgery. This would mean:

  • Eliminating some departments
  • Eliminating some programs
  • Cutting administrative staff
  • Reducing remaining faculty and staff salaries by at least 20 percent
  • Eliminating all college contributions to retirement and tuition plans
  • Selling some of the college buildings
  • Reducing student services

Taken together, these measures might put our accreditation in jeopardy. Our bond rating by Moody’s might drop even lower, and we would be forced to pay higher interest rates to borrow or to roll over current bonds.

It is with this reality in mind that the Board of Trustees meets this weekend to make major decisions that will impact the future of the college. I ask for your support and understanding in these difficult times.

Aden Hayes is executive director of the Foundation for Practical Education.

Chief business officers must broaden their skills and roles (essay)

The role of the chief business officer is changing (and expanding) dramatically, and current and prospective CBOs must broaden their skills and approaches, write Thomas Ayers and Karen Goldstein.

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