Sunday, June 24, 2018

Don’t Turn It Around. Change It.

“What are you going to do to turn around our falling enrollments?”

Lots of Boards ask this of prospective presidents.  It’s the wrong question.

It’s understandable; certainly, if a turnaround were in the offing, it would make a lot of financial issues go away.  Growth forgives many sins. And the growth period for community colleges nationally was long enough that many people assumed implicitly that growth is normal and natural.  Demographic tailwinds can make even mediocre leaders look smart.

But since about 2010, enrollments have been dropping, and they’re likely to fall off a cliff around 2026.  That’s because birthrates fell off a cliff in 2008, and 2008 plus 18 equals 2026. When I opined last week that part of the issue with birthrates is that parenthood has become crazily expensive, many folks responded that the real issue is women’s wage levels; as those climb, fertility drops.  To which I say, that’s true at a macro level, but obviously inapplicable to 2008. Wages did not jump in the Great Recession. Besides, I’d much rather make parenthood easier than try to turn back the clock.

Which brings me back to Boards.

I understand the temptation to regard the last several years as aberrant, and easy enough to fix with the right leadership.  If we could somehow conjure up the economic (and political) conditions of the 1990’s, things would be easier. But demographics don’t lie.  I’ll suggest a reframing:

For a long time, a shaky business model was sustainable thanks to an extended demographic tailwind.  The winds have shifted, and look likely to stay where they are, and then get worse. (If the immigration crackdown continues, it will be worse still.)  The cracks in the business model that were once papered over with growth are now exposed.

That means that the task at hand for leadership isn’t to bring back the good old days.  If they were sustainable, they would have been sustained. The task at hand is to change the business model, while obviously working on the larger politics.

The political issues are many and varied, and familiar to most readers.  Some of them are also intensely local. For example, my own state of New Jersey manages to have divided government, even when the legislative and executive branches are controlled by the same party.  That’s not supposed to be possible, but hey, it’s a brave new world.

The business model is more under our control, though, and therefore a good place to look.

That would involve looking at ways to make a given college sustainable at a lower long-term enrollment level than it has had over the last decade or more.  For example, as a sector, community colleges have been bit players in the philanthropic arena; they simply have not participated at anything near the level of their four-year counterparts.  That will have to change. And retention has gone from a moral good to a survival imperative, which means that measures that may make some on-campus constituencies uncomfortable may have to be on the table.  That will likely mean increased internal conflict on many campuses, but the alternative is much worse.

The shift that I’m suggesting to Boards -- ask candidates not how they’ll bring back the good old days, but how they’ll transform the business model to meet what’s coming -- may seem subtle, but it’s foundational.  Look at the retirement announcements of current presidents, and you’ll often see the programs added, the buildings built, and the enrollment grown. Those have become the wrong measures. The world has changed, and the changes aren’t temporary.  If anything, they’re going to accelerate. Playing by the old rules is a surefire way to lose.

It starts by asking the right questions.