Springboards And Boomerangs: How Likely Are We To See A New Era Of Disruption In US Higher Ed?

Yet another “5 trends” article showing us all the way higher ed is going or should be going, this one from Deloitte and the Wall Street Journal (WSJ). The backdrop is the same: the pandemic has reshaped how colleges and universities operate and position themselves for the future of higher education, the post-pandemic era, and the new normal now that the shock of the pandemic has worn off leaving exposed the vulnerability of outmoded and outdated strategies, operational and financial models, organizational structure, administrative and governance models, and institutional priorities.

In their article 5 Trends Defining a New Era of Disruption in Higher Ed (published July 5, 2023), the Deloitte/WSJ team identify five trends that have emerged since the start if the pandemic they believe will “play an outsized role” in how university leaders navigate challenges, capitalize on opportunities, and move their institutions into a more sustainable future. These are neither surprising to most in and around US higher ed nor are they very different from other such lists that have appeared in the last few years.

1. Enrollment. The US is no longer the dominant provider of higher education. Both demographics and enrollment trends domestically also challenge our systems that for decades have been built on unbounded growth and unlimited supply. Colleges and universities must evolve quickly to accommodate new audiences, new needs, and new learning and credentialing paradigms to accommodate both.

2. The value of a four-year college degree is being questioned. Employers, families, and even legislators are challenging the traditional college model, the four-year degree, and even the ROI of higher education in its current form. Colleges and universities will have to respond by demonstrating value through direct employability, lifetime earnings, ensuring graduates are meeting the needs of employers upon graduation, and that they are prepared and able to bring their education and training to bear on future jobs and future industry sectors/careers, including those that have not yet even been invented.

3. Business models require complete transformation. Beyond the inputs (tuition from traditional students as the primary driver of revenue), the business models of colleges and universities themselves must be reimagined. This includes: (1) the business model/ case statement for the institution and its operation, (2) business processes, and (3) the underlying budget model. The pandemic laid bare the truths for many institutions, that their operations were not sustainable, neither during a crisis like COVID (without significant assistance from the federal government) nor under normal circumstances (without dipping deeper into reserves, making massive cuts, accumulating debt and deferred maintenance obligations, or all of the above). It also made clear that business process improvements were needed at many institutions, a reality made more challenging by staffing shortages and turnover.

4. Retaining talented faculty and staff. Higher ed, like nearly every other industry sector, must come to terms with the post-pandemic, new-normal expectations of employees. Schedule flexibility, hybrid and remote work are here to stay. Employees have new expectations and intentions around work-life balance. The nature of remote or hybrid work, coupled with the newly experienced and widely accepted flexibility (and even comfort) of hybrid teaching and learning, are special challenges for campus-based higher ed institutions that are more used to (and built for) 24/7 operations that create both a culture and a vibe that have come to define US college and university campuses. It is not surprising, given staffing reductions, increased workloads, and fierce competition for talent, that staff turnover at higher ed institutions as been (and continues to be) very high. This is also true for faculty in some areas as well as for administrators and senior leaders. Universities will need to become much more sophisticated, intentional, strategic, and competitive to retain top talent.

5. Risk-management strategies must evolve, expand, and elevate. The pandemic exposed a weakness in risk management plans at many colleges and universities. The focus of crisis management plans had been on what to do in the event of a mass shooting, a natural disaster, or a cyberattack. Colleges and universities also had been developing more robust plans to respond to campus protests, whether internally or externally led. A global pandemic (or any emergency, health or other, on this scale) was not something most institutions had contemplated. More robust risk management and emergency management plans are needed that can be applied to, adapted for, and activated in any crisis. Colleges and universities must incorporate risk management into their cultures, not just their policies. This starts with the institution’s board and executive leadership team but must be understood and embraced by everyone.

What all these lists – whether trends, observations, or challenges – have in common is that they place into context the pandemic-related impacts and responses of the past few years and (hopefully) inspire introspection and reflection by those working within and around higher ed.

The revenue-expense balance at most colleges and universities is, to many, a black box, opaque and mysterious. Real costs are difficult to determine (starting with the “sticker-price vs. actual cost of attendance” morass), expenditures can be difficult to defend (and are often misunderstood, fueling accusations such as “administrative bloat”), and decisions about what to fund are often driven by demands or expectations that fall outside of any clear strategic plan or sensible ranking of institutional priorities. There are many pressures (and even more eyes, it seems today) on an institution, its leadership, and its budget.

New thinking is needed to reframe the entire financial model so that it enables change, innovation, and sustainability. And budget models are needed that strike the right balance between transparency and empowered leadership, that inspire trust and confidence, allowing faculty and staff to remain focused on their respective roles and responsibilities. Faculty taking time away from their primary duties to insert themselves into the intricacies and myriad details of an operating budget for something as complex as a major university makes as little sense (and can be as disruptive and detrimental) as governing boards inserting themselves into staff hiring or legislators dictating curriculum.

We stipulate the pandemic shined a bright light on the many challenges that had been building in the sector for decades, acted as an accelerant that both exposed vulnerabilities and instabilities, and made more urgent the need for major changes. We also stipulate to the success most colleges and universities had in navigating the crisis, sustaining operations (albeit with significant federal assistance), and coming through the other side more or less intact. However, while we acknowledge that some changes have been made, we must also recognize the (largely internal) pressures that have resulted in more of a “return to pre-pandemic operating models, strategies, and priorities” rather than major, systemic, transformational change.

This “boomerang effect” was perhaps predictable, given the realities of shared governance that characterizes and distinguishes US higher education, the conservative (risk-averse) nature of most colleges and universities, extremely limited resources (or at least those that are not irrevocably committed), and strained governance-administration-board relationships.

This boomerang effect also resulted in a missed opportunity. Many institutions failed, in any substantial way, to leverage the urgency of the pandemic and use it as a springboard to leapfrog over decades of reticence if not stagnation (whether unable or refusing to change, adapt, or evolve) into a future more aligned with the rest of the changed world. Instead, they chose, demanded, or simply allowed themselves to slide backward into pre-pandemic operations. This will be viewed through the lens of history as a missed opportunity for needed change. It remains to be seen whether colleges and universities are better prepared for the next pandemic or any other crisis, whether they are less vulnerable to major shocks such as those we saw in 2020 and 2021, and whether they are more resilient and more financially sustainable.

At a time where existential threats seem to be everywhere – whether it’s the changing climate, a water shortage, a crisis of democracy, geopolitical instability, or a global pandemic – US higher education is facing its own existential threat. And it’s not simply a financial crisis. Theirs is a crisis of identity, purpose, leadership, governance, relevance, and mission. But colleges and universities have both agency and urgency. How they use these to justify and secure their existence is an unfolding story. And trends are just that, direction indicators. They neither point to the answer nor maintain constant direction.

The article closes urges a new approach in the post-pandemic era for higher ed, a call for universities to “set themselves apart as whole institutions rather than stake their future on tweaks around the edges.” Can the post-pandemic era be a new era for disruption in higher ed? The trendlines are not yet convincing.