If news reports are any indication, much of higher education is in a freefall. According to the recent Fitch Ratings 2023 Outlook Report, higher education is in a ‘deteriorating state’ due to inflationary costs, labor pressures, and mixed enrollment results. The latest projection is considerably bleaker than the 2021 outlook, especially for colleges in the Northeast and Midwest where the college-age population is shrinking most rapidly. Add to this impending decline in demand, the analysis by Bain & Company that indicates even prior to the pandemic, approximately one-third of colleges and universities were operating with deficits or thin liquidity.
The impact of these trends has been, in part, masked by the pandemic-related government funding with a median value of approximately $13.2 million per institution. Considering the 2021 average college operating margins (2.5% for privates and 4.3% for publics), these one-time federal funds filled the financial gap for many institutions. According to a recent S&P Global Ratings report, these funds were most critical for the lower bond-rated schools, the very schools most financially challenged. With most of the federal funding now gone, college and university leaders are facing unprecedented operating pressures in combination with a gloomy demographic outlook. According to its latest Knocking at the College Door report, the Western Interstate Commission for Higher Education projects a significant decline in the number of U.S. high school graduates through 2036, following a peak of 3.9 million in 2025.
I have been an observer of higher education for several decades now. Reports of a challenging environment are nothing new. And there are always surprises that can quickly turn the tide for better or worse (how about the pandemic?). However, something feels very different about our current times. For one, the urgent need to act quickly and decisively on both short-term and long-term priorities. As reported by Higher ed Dive, college consolidations since 2015 are on the rise: more than 60 with an additional 14 institutions estimated to close and merge just since 2021. The news last week of the impending closure of 200-year-old Cazenovia College drives home the fact that a long historical pedigree does not preclude the risk of institutional failure.
Since 2020, I have had the privilege of hosting the IngenioUs podcast where I speak with higher ed’s most creative thinkers and doers. I have been inspired by these conversations. I have learned how challenging it is to lead a college or university these days. And I have learned how impactful—and how rare—good leadership is.
From my conversations, there are a handful of things that the best leaders do, that can be especially consequential. This is the positive note I want to end 2022 on. Good leaders can make a difference. Let me highlight three themes that emerged in my conversations with good leaders that I believe are particularly notable.
1. Good leaders are Truth-Tellers and Truth-Seekers. Even when they fear they have something to lose, the best leaders tell the truth. They are comfortable in their own skin. They lead in integrity and are willing to ‘tell it like it is.’ They make room for contrarians. And they challenge the status quo.
According to Hollins University President Mary Dana Hinton: “If you’re not faithful to your own self and your own experiences, if you try to compartmentalize your vulnerability from your courage, your truth from your work, your public life, from your private life, it’s unlikely your leadership will be very successful.” Such leaders have a keen and unapologetic understanding of their leadership capabilities. They lean into their strengths while making space for those who look and think differently. In leading from a place of genuine authenticity, leaders like Hinton make it easier for others to find their place within the campus community, something that no doubt helps build trust, and a sense of belonging, and creates a conducive environment for new ideas and innovation.
The best leaders also tell the truth about the institution’s challenges and are willing to confront fundamental assumptions that may be holding a campus back. Maryville University President Mark Lombardi suggests that the greatest impediment to innovation and change these days is not the faculty, but rather leadership: “My job is to challenge the fundamental assumptions, to enforce a dialogue around why can’t we do this? Why can’t we have 100% retention? Why can’t we have a 100% graduation rate? Challenging the institution to rethink assumptions, to see things as they are, and disrupting the existing thought processes is, I think one of my most important roles as President. I would argue it’s one of the most important roles of any university president, particularly now.”
2. Good Leaders are the Chief Visionaries and Implementors. The best leaders have a deeply ingrained understanding of their institution’s unique market position and are tenacious in driving the execution of a strategy that leverages that position.
Drexel University President John Fry’s passion and dedication to a vision for an urban university ‘unlike any other’ connect the forward-looking vision of the school’s founder with modern-day community-based needs and opportunities. “And all these years later, if I were to take you down to the Dornsife center, you’d see a thriving hub of community-based learning and activity. You name it, based on the needs of our community, we’re working in partnership to provide solutions to those needs. And that, to me, just makes so vivid all the work that we’re trying to do because it involves real academic firepower. It involves real civic engagement, it’s place-based, and it’s helping the local economy because people are getting jobs and all sorts of other opportunities. And honestly, there’s just a lot of good being done. And I think people just feel, wow, this is a real opportunity for our local university to help our community lift itself up.”
Now in his 20th year as president, Michael Crow has guided the evolution of Arizona State University into a different kind of public university. Crow’s extraordinary success is informed by his clear vision of ASU’s primary value proposition and his skill in driving the vision’s execution. When asked about strategy, Crow affirms the importance of understanding your opportunities for differentiation: “To start with, you must make certain that your institution has something other than a general purpose, in our case, the same purpose as every other public university. We’re not public university number 62. We need to be a public university for the people of Arizona, and all things Arizona.” And many of the biggest changes made during Crow’s tenure operationalize this vision including the launch of the Downtown Phoenix campus, the ASU Scottsdale Innovation Center, the high-tech Media and Immersive eXperience (MIX) Center in downtown Mesa in partnership with the city, and the mixed-use Novus Innovation Corridor, a 350-acre public-private collaboration of office space, apartments, retail and an athletics village on the Tempe campus.
3. Good Leaders are Strategic and Courageously Effectuate Innovation. Given accelerating operating challenges, colleges and universities must have a clearly articulated and compelling innovation strategy. The best leaders know what innovation is and how to operationalize it in a disciplined way.
Now in her 33rd year as president of Trinity Washington University (TWU), Pat McGuire has led a remarkable transformation of a mostly white Catholic women’s residential institution to a predominantly black and Hispanic serving institution with a strong social justice mission. As McGuire tells it, the vision and strategy emerged from an astute reading of the changing environmental context. “I’ve had people say to me, how did you plan to change the complexion of your student body, and I look at them dumbfounded usually and say, you know, sociology happens. I did not set out in 1989, with a vision of what Trinity is today by any stretch of the imagination. What I learned I had to do, though, was to be open. This is the opportunity, that I referenced earlier, the coincidence and the opportunity to be open to change.” Describing herself as a ramrod in confronting even the most “sacred” assumptions and practices, McGuire’s reinvention strategy left virtually no part of the campus untouched, resulting in a more relevant, robust, and sustainable institution.
When Helen Drinan became president of Simmons College in 2008, the institution was under significant financial stress. Drinan’s decision to enhance Simmons’ reach and visibility by investing in graduate education ultimately propelled the institution to national recognition, revitalizing the finances and the strategy for how the college executes its mission today. I asked Drinan (forthcoming episode) about how a leader knows where to look for the best innovation ideas: “Look for opportunities that are natural outflows of your mission. Think about where your most significant flow of revenue is coming from right now. Are there opportunities that are underleveraged, underutilized, and maybe even forgotten? In my experience, some of the best innovation opportunities are right in front of us waiting for the right strategy and a fresh set of eyes.”
What can we learn from these leadership stories?
First, the ability to see clearly and through legacy assumptions is a critical factor in the success of these presidents. How do you do this? Practice approaching your campus with a beginner’s mind. What is a beginner’s mind? According to Zen Buddhism, it means dropping our expectations and preconceived ideas about something and seeing things with an open mind, just like a beginner. If you’ve ever learned something new, you can remember what that’s like: you don’t know how to do whatever you’re learning, but you’re looking at everything as if it’s brand new, perhaps with curiosity and wonder.
Second, these leaders are skilled in the practice of effectuation, a term coined by University of Virginia business school professor Dr. Saras Sarasvathy. They start with “what is at hand”— they see opportunities in the people and resources around them that others do not. They know how to ‘make water into wine’ so to speak, by repurposing and reimagining the familiar in new and innovative ways. We can each do this with practice. With your beginner’s mind, look at what is “around you” on your campus that you are ignoring or underutilizing. Do you have underutilized facilities? Are there neighboring institutions that might make good partners, enabling you to share or expand resources? Do you have highly enrolled programs that might be expanded using a different delivery? Once you start thinking like an effectuator, you will find possibilities for innovation everywhere you look.
Third, these leaders have taken a hard look at their identity and their market position and have formalized an innovation strategy that makes clear the kind of transformation they are trying to achieve. They are focused on asking the right questions and connecting the dots between their mission, their value proposition, and new opportunities. For some schools, it is about improving student retention and success, whereas, for others, the priority is on expanding revenue. Do you truly understand your current market position? Do you know what strategic levers will yield the greatest return on investment? Have you formulated a strategy that spells out how you will execute and live out your vision? While nearly all leaders have a vision, it’s the ones who are relentlessly focused on driving the execution of the strategy who are most likely to be successful.
Bottom line: The end of federal COVID relief funding is accelerating an already challenging operating reality for many colleges and universities. My IngenioUs conversations with inspiring leaders make clear that leadership does matter. These themes can be adopted and harnessed by any leader who is looking to strengthen her institution’s readiness for the challenges ahead.
About the Author: Melissa Morriss-Olson, Ph.D. is provost emerita at Bay Path University where she serves as a distinguished professor of higher ed leadership, and founding director of the doctoral program in educational leadership and the Center for Higher Ed Leadership and Innovative Practice (CHELIP). She hosts the internationally syndicated podcast IngenioUs and writes and speaks about higher ed leadership and innovation best practices. Her forthcoming book, Leadership for the Here and Now, draws from the IngenioUs podcast interviews conducted with more than 100 plus college and university leaders over the past three years.