By Randy Best
Self-sufficiency is a ubiquitous aspiration for individuals as well as institutions, to achieve self-reliance and exist beholden to none. For public universities, however, self-sufficiency is less of an aspiration and more of a mandate, given the current environment of declining and unreliable state funding for higher education.
Growth is central to institutional self-sufficiency, because in the near future, only two types of universities will exist: those with growing enrollment, and those with declining enrollment. Remaining static is not an option in today’s highly competitive environment. Universities that are growing will be adding programs and faculty, while schools with declining enrollments will be cutting programs and staff.
How tenuous is the current status quo for higher education? A recent Gallup poll of university business officers showed that only 42 percent were confident about their institution’s sustainability over the next 10 years – meaning almost 60 percent have some doubt that their university will survive for another decade. It’s a hard-knock matter of money. Ultimately, all the diverse things that universities represent – an educated citizenry, fulfilled individuals, critical research and, yes, faculty and administrator salaries – will not be sustained unless an institution brings in more money than it spends.
Since rapid increases in tuition have become such a public issue, forward-thinking universities are focusing on enrollment growth, which fortuitously coincides with the nation’s expanding need for an educated and skilled workforce. Indeed, the Gallup survey found that 82 percent of university business officers most likely will employ strategies to increase overall enrollment, and 70 percent are contemplating the launch of new revenue-generating academic programs.
A word of caution about growth: Strategies should be built around an institution’s historic strengths. A report from Bain & Company, “The Financially Sustainable University,” points out the need for universities to remain true to their brand and distinguishing characteristics even as they apply new strategies for growth. “The worst-case scenario for an institution is to be relatively expensive and completely undifferentiated,” according to the report’s authors, Jeff Denneen and Tom Dretler. “Unfortunately, many institutions seem to be headed down that path.” But by focusing on the characteristics that are truly distinctive and channeling resources to them, institutions can positively improve their performance and get on the path to long-term sustainability.
Public universities have some of the most recognized and trusted brands in academe. Those brands need to be leveraged with sophisticated and focused marketing, supported by aggressive budgets that are significant and sustainable over time. The enrollment and revenue growth that can be achieved from this robust approach can go a long way toward making a public university not only self-sufficient, but ultimately unassailable in the achievement.