If you work in academia or serve on a college board, it is likely you will understand the problems and issues when you try and incorporate business discipline and planning into academia. If you work in the social sector, there are some parallels to the challenges your institution faces. What constitutes a great college or university? Excellent faculty and students that are engaged in learning and research certainly helps. We like to think that is what we have here at Monmouth College with the Midwest Entrepreneur program.
There is no one authoritative definition for an excellent university academically. Likewise, there is no one institution that can be singled out as the best managed college or university in the world. Even Harvard University, Cambridge, or Beijing has weaknesses and relative strengths. Those storied institutions, endowed with so many valuable assets, must secure enough revenue to fund operations to maintain their excellent reputations. Where much is given, much is expected in the way of return on investment. Ironically, the best managed company is not likely to be Google, Honda or Apple in the same way that the largest universities in the world may not be the best managed. From my research and experience, it is apparent that a college with less than 2,000 students can do a lot with a little. However, the more resources and staff involved, the more challenging it is to adapt to change, understand scarcity, and initiate the disciplined planning required to survive and sustain a business.
Many institutions of higher learning were sheltered from these realities and the economic downturn has uncovered their naivety. How the administration and faculty adapt to external changes and challenges certainly tests all institutions and some fare better than others.
Every institution of higher learning claims to enrich student learning and prepare them for meaningful lives. Each claims they do something unique that sets their graduates apart from the competition. But what characteristics are commonly identified as attributes of a well-managed institution? Answer: A strong financial footing, disciplined leadership, and a sense of direction or purpose according to Jim Collins in Good to Great and the Social Sectors. (Collins, Good to Great and the Social Sector, 2005) However, few universities would ever be decribed as entreprenuerial.
The Moody’s Investment Report, “2011 Outlook for U.S. Higher Education, Moody’s maintains a negative outlook for the majority of higher-education institutions in the United States, which it says are too dependent on tuition, auxiliary income, and state support. (Moody’s Investment Service, 2011) The report points to three “critical credit factors” that drive the 2011 outlook for colleges:
- “Weakened prospects for net tuition growth” because of a market preference for low-cost or high-reputation competitors.
- “Differing degrees of pressure on non-tuition revenues,” such as philanthropy or research money.
- A “need for stronger management of operating costs, balance-sheet risks, and capital plans.”
My future study will focus on how business tools can be utilized in higher education. I will analyze the drivers for net tuition, perceived value as marketing and fundraising assets, and the critical need to establish criteria for management success for 877 institutions of higher learning. Can a college be entrepreneurial? Most pundits would say no. I hope to share the results of my research in July at the conclusion of this phase of my research. I believe Monmouth College is an exception, and this study will reveal why it is so difficult for colleges and universities to be entrepreneurial in marketing themselves as distinctive entities, while practicing a disciplined financial approach to growth.
