How Your College Can Survive the Pandemic

This blog is co-authored by Javier Miyares, former president of University of Maryland Global Campus.

When an organization comes face to face with an existential crisis, things can never go back to the way they were. For many colleges, Covid-19 presents just such a crisis. The pandemic and its aftermath are particularly worrisome for vulnerable institutions, but even some of the best financed are being forced to make decisions that are the stuff of nightmares for presidents.

Recent research from SimpsonScarborough, a marketing and consulting group for colleges, predicts that four-year institutions may see up to a 20-percent decline in fall enrollments. It is a sobering reality we know too well. Six years ago, University of Maryland Global Campus was facing a similar decline. The ground was shifting under our feet, and we needed to make major, transformative changes to ensure our institution’s financial viability. Decisive action was required. While this path isn’t well worn, it has been traveled before. Here are the steps we took to turn our enterprise around.

The first thing we had to do was to accept the magnitude of the problem. It sounds straightforward but isn’t always the case. Inertia is a very powerful — and here devastating — force. The instinct to stay the course can be strong, especially since stakeholders may think deviations represent commentary on their performance.

Even now with the pandemic — an unprecedented disruption for nearly every institution, for sure — some will be tempted to see this as just something to weather until returning to business as usual. But challenges like overdependence on tuition revenue and public funding, lack of emergency funds, and declining enrollment aren’t going to self-correct. You’ll need to sail straight into, and through, the storm. The problem goes beyond the immediate need to manage through Covid-19; Rome is burning.

At UMGC, it appeared initially that we needed to solve a revenue problem; however, it became clear that our challenge was much larger when we turned to the data and analyzed our university operations through the lens of three simple equations:

1. Applications x Yield Rate = Incoming Class
2. Student Base x Retention Rate = Returning Students
3. Total Revenue (i.e. Incoming Class + Returning Students) must meet or exceed costs

It was obvious that with enrollments declining nearly 20 percent and costs going up, we were on an unsustainable path. We needed to focus on both revenue and costs; any solution that didn’t account for both would prove ineffective in the long term. The university cut $60 million from its operating budget over two fiscal years. This is what many institutions face today. The current problem is much deeper than the coronavirus’s impact on fall enrollment. The sooner institutions embrace this truth, the sooner they can take the next steps.

Once we appreciated the magnitude of our problem, it was vital to determine a realistic timeline to fix it. We thought of ourselves not like an agile speedboat, but instead like a massive aircraft carrier, which is no small feat to redirect. Turning our metaphorical ship around was going to take time, and too much was at stake to cut corners. You’ll want to be brutally honest as an institution about what is plausible to fix and when. Move too slowly, and you risk going under; move too quickly or set unrealistic goals and you’ll get in your own way at a time when you have neither resources nor energy to spare. And if you don’t account for measurement lags, you’ll set yourself up for disappointment at a time when morale is already in jeopardy.

As you set your timeline, it’ll also be important to build consensus. The hard truth is you’re going to have to make tough decisions, and disconnects will only distract from the task at hand. At University of Maryland Global Campus, we got the executive team on the same page to ensure we were putting up a unified leadership front.

In so doing, we necessarily came up against cultural challenges, and we learned the lesson: Don’t underestimate politics. As in any family, there can be occasional rivalries, and these can include disagreements between faculty and administration, not to mention differences within those groups. Bracing yourself from the start allows you to hit the ground running.

One way that we cut through red tape was to designate “czars” — of new-student recruitment, cost control, student success, and data. That last czar roots all efforts in data and drives informed decision-making. Even though the roles were temporary, it was key that they worked out of the president’s office and had new titles (and compensation levels) to communicate the importance and urgency of the work. This proximity was empowering, enabling the czars to move quickly. (If you don’t have a strong data capability, then it’s important to build it. Having a chief data officer will enable you to better predict challenges in their infancy. The key is to have the expertise of data scientists, who are trained storytellers and can bring the data to life in clear and effective ways.)

Establish benchmarks to help you make the case that transformation is necessary for survival. Use your peer group of institutions as a guide. Understand your administrative and nonadministrative costs and the ways you allocate your labor costs across departments. That’s an important part of keeping perspective and conveying to the college community vital context as you take the next step.

With that foundation in place, we were able to take action, make changes, and measure the impact of those changes. That included creating major projects to stabilize enrollment and improve student success. Unfortunately, it also included laying off 297 faculty members, staff members, and administrators. Let data drive your decisions. You won’t be able to cut your way out of a crisis across the board, and if you’re not strategic you’ll end up cutting elements that differentiate you and could be the key to future growth. Use a scalpel, not a blunt instrument.

Here’s our advice for this surgery: Go deep and go fast with cuts. Confront this head on, and make sure you only need to cut once to shock the system back to health. We made deep enough cuts to hedge against a worst-case scenario, and to avoid having to cut incrementally. This meant we were able to start healing as quickly as possible, and having slightly overestimated the crisis, we righted our ship that much faster.

While we were making cuts to ensure our long-term viability, we also made sure to invest in areas of strength. If you’re an institution that has to make cuts, being told to invest at the same time might sound like heresy. But it’s going to set you up for revenue growth in your near- and long-term future. By doing it, you will be able to regroup and retrench going forward. At UMGC, this meant developing new, market-based academic programs to drive future growth.

We tried our best to do the right thing by employees, offering generous severance packages. Be as generous as you can with those you have to let go, because it’s the right thing to do for people who contributed their talents to your institution. That said, recognize nothing will make it easy for those affected. They will be upset; you’ll face criticism on social media and in the press; and you can expect to be sued. You’re picking your poison here, and there’s no way to avoid a turbulent period. Don’t sugarcoat things, but know that you’re doing what’s necessary to make sure your institution will be around for many years.

By making tough decisions, taking risks, and being firm about your chosen way forward, you won’t make friends. But if you play your cards correctly, you’ll stabilize and improve your financial viability. Two years after we made our tough decisions, UMGC was on its way to becoming a healthier institution. But you must still be careful about inertia taking hold; that will just jump start this entire process again. A proper data-collection and -analysis operation will be your crow’s nest to look out onto the horizon and help you take advantage of opportunities and get ahead of challenges.

Finally, explore new ideas and models. That’s a great way to drive new revenue streams to help protect you for the future. The ideas we invested in included a proposal for what became HelioCampus, which grew out of UMGC’s Office of Analytics, and which the University System of Maryland Board of Regents approved to spin off into a private higher-ed data-analysis company in 2016. These new ventures can breathe additional life into your institution and boost your long-term health.

While you didn’t choose to be shut down by this virus and you can’t fully control your destiny, your long-term prognosis depends on the actions you take now. Avoid short cuts that sound too good to be true. Even if Covid-19 leaves you relatively unscathed financially, other challenges will inevitably arise. If you can learn from our experience, you can increase your odds of emerging from the current global crisis stronger, more focused, and better positioned to survive and thrive in the near and distant future.