Victory was just four seconds away! The formality of the kickoff was the only thing standing in the way. The broadcasters declared that it would take a miracle to spoil the inevitable victory. These four seconds are now immortalized in college football infamy as “The Play.” The return team scooped up the ball, completed five lateral passes while weaving between defenders (and avoiding members of the marching band running onto the field), and found the endzone. The kick was returned for a touchdown, and the game was lost by the team that appeared to have the win safely in hand just moments prior. When we make assumptions, victory can be declared before all the facts are known and circumstances evaluated. It is a painful experience for players and spectators alike. Each of us has witnessed premature celebrations of a team, whether in sports or in life.
Often these events are the result of ill-informed decisions that occur when we make declarations and assumptions without relevant and timely data. We can appreciate that leaders cannot always know everything. If leaders wait for all information, a decision will never occur. However, we should expect our leaders to monitor, evaluate, and understand critical data points and metrics on a regular basis.
Recent headlines pointing to record fall 2022 enrollments seem to bring vitality and stability to higher education. It remains to be seen if increased headcounts convert to increased net tuition revenue. Volume growth is a fun story to tell—it excites the crowd. Enrollment is not the only indicator of financial viability. The true story of financial viability is told through a multitude of metrics such as discount rates, enrollment trends within academic programs, retention and graduation rates, and the actual cost to educate students.
Over the past few years, higher education has experienced a considerable cash inflow from government subsidies in the form of forgivable loans, HEERF grants, or other COVID-19-related relief funds. While it could be argued that these funds were crucial for survival during the pandemic, they have masked the operational problems faced by most all institutions.
Economic uncertainty creates several problems for higher education’s ability to attract students at a particular tuition rate and the endowment’s ability to support current-year operations. Shifting demographic changes in students and raising costs to educate students are adding to a growing "to-do" list for university leadership. Hoping to recruit more students, increase private giving, or reduce operational expenses is not a realistic strategy. Hope, in and of itself, is not a strategy. These are long-term goals that must be integrated into strategic planning. While many schools evaluate long-term strategic plans for their accreditation visits, it is more critical that these strategic plans are executed, monitored, evaluated, and communicated.
A realistic plan requires the use of data-informed decisions. Do you have a realistic game plan? Does your institution assume victory is just one more enrollment class away? There is a reason football coaches watch game film and study statistics on both their team and their competition. Coaches need critical information to provide the necessary leadership to their team. Gathering real-time data to make informed decisions helps avoid costly mistakes. Strategic planning for the university should follow this pattern by understanding the mission, exploring the industry landscape, and communicating the plan.
None of these plans matter if the institution does not understand the cost to educate a student, student interest in academic programs, or the long-term financial impact of decisions. Your institution is making strategic investing decisions with each annual budget. If the budget process is on a repeat cycle, do not expect different results.
How confident are you in your institution’s ability to make strategic investment decisions?
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