Seven Leadership Principles for Value Growth in Independent Higher Education
Challenges to Growth in Independent Higher Education
Looking at the evolution of independent higher education in America, there is no reason why independent providers shouldn’t thrive elsewhere. Almost all of America’s Ivy League are independently held, highly successful, extremely wealthy, hugely influential, and universally acknowledged as high-quality institutions. There is a measure of public funding that flows into these institutions, but most are funded by substantial student fees, supported by vast endowments, gifted by wealthy and powerful alumni, other individuals, and corporations. While there are many highly successful state (public) universities, the elite is dominated by those that are independently held.
There is also the peculiar case of business education in France, which is dominated by the Écoles Supérieure de Commerce. These are owned by Chambers of Commerce, offering high-quality business education. Their graduates are well regarded and sought after by organisations in the independent and public sectors.
Elsewhere, it’s very much the opposite. The elite are public universities, funded largely by the taxpayer and to a varying extent, overseas students. The independent, independent sector suffers from three key issues.
Funding and Financial Sustainability
Independent institutes of higher education (IHE) face financial challenges due to limited government funding and an over-reliance on overseas student tuition fees. Securing adequate balanced funding for operations, infrastructure, and a high-quality student experience is challenging. Hence, achieving financial sustainability and exploring alternative revenue streams is crucial.
These issues are further compounded by an unregulated and unruly recruitment agents’ network.
Recognition and Accreditation
IHE struggle to obtain recognition and accreditation for their programs, hindering student recognition and credit transfer. Navigating complex registration and accreditation processes, and establishing credibility is challenging and time-consuming.
Pathways to Further Education and Employment
IHE have limited options for student progression to higher degrees, especially research degrees. Ensuring that students have opportunities to access employment in their chosen fields is challenging.
Overall, these challenges and others mean that IHE lack institutional recognition and the value of their degrees is poorly perceived by some students. This means IHEs are challenging to establish initially and ever more challenging when it comes to seeking growth.
Perpetuating the Challenges
Many IHEs are successful. Many more struggle, especially at start up, and worldwide regulators decline many more applications to register as an independent IHE than they approve.
From the perspective of advising multiple clients and observing the wider international IHE sector, there are at least seven obstacles to establishing and growing IHE:
Ineffective governance and executive management.
Insufficient focus on the student experience.
Underestimating the importance of data and analytics, especially with reference to the market and operating environment.
Poor strategic planning.
Failure to innovate and resistance to change.
Ineffective marketing and branding.
Limited collaboration and partnerships.
I explore these challenges in more detail elsewhere. However, based on 40 years experience in business with 30 in international higher education, it’s these challenges that hinder higher education start-ups and their subsequent growth.
Resolving the Challenges
Based on research and best practice, it seems to me there are seven principles investors, founders, owners, boards, and executive management need to adopt:
Structure. We must have the right players in key positions. The Chair of the Board, the Chair of Academic Board, the CEO, the CAO (Chief Academic Officer) and the COO (Registrar) must understand the independent higher education sector and its commercial imperative. They must be fit, proper, and collegial. Too often, I’ve seen appointments made to these crucial roles without due diligence, especially at the board level, and the toxicity that usually follows is destructive. While there may be no issues initially, a poor appointment will bite the owners eventually.
Students. We must deeply understand what our ideal clients want. Be assured, it’s more than just an education. Empathy and considered design are a must.
Situation. We must deeply understand the operating environment and the market. I’ve read a few environmental and market analyses over the years. Most are adequate but could be so much better. Sadly, too many are only looked at once a year. And then there’s risk management.
Strategy. Higher education is a market that is saturated with commoditised courses. The curriculum of an MBA is much the same in an elite university as it is in any one of multiple independent providers. Acknowledging that the regulatory regimes worldwide reinforce conformity and discourage innovation in course development, how might our business model differ? How might we move out of a saturated market and create value propositions that interest our clients?
Shift. What needs to change in our business model? Which building blocks offer the opportunity to reduce or eliminate costs? Which can help raise or create value?
Sell. How can we reach our clients? Top quality agents will always be important to and valued by the sector. Most of this rare breed work hard to locate high-quality candidates. But how do we reach out beyond this? How do we create ‘high press’ marketing to better engage with agents and students?
Synergy. Who should we work with? Yes, we’ve talked about our agency partners, but how do we select the best learning management systems, the best student management systems, the best accounting systems, the best website developers? These are all critical choices IHE must make.
Value Growth in Higher Education
Adopting the preceding principles will help assure value growth in IHE.
Sustainable funding and finance will follow as we develop alternative revenue streams to secure funding for operations, infrastructure and a high-quality student experience.
Registration and accreditation will be simplified, followed by improved credibility where we establish high-quality learning and teaching, supported by scholarship, rigorous corporate and academic governance and world-class executive leadership.
We can assure education pathways and improve routes to employment by building educational and professional partnerships, based on professional accreditations.
Hence, we can build institutional recognition and improve our clients’ perceptions of value. It’s a matter of principled leadership by carefully selected colleagues.