Trends in Higher Education (and What You Can Do About Them), Part III

  • Industry trends
  • 4/20/2016
Classroom Presentation Blonde White Shirt

These “non-trends” in the industry — habits and practices we’re not seeing but should be — are opportunities for organizational and leadership growth.

In parts one and two of our series on trends in higher education, we looked at current industry issues like new regulatory pressures, shifting demographics, leadership changes, and typical behaviors and mindsets that today’s colleges, universities, and trade schools share in common. 

Read the other articles in our three-part series about trends in higher education. Part one Part two

In this third and final installment, we’ll examine some “non-trends”, for lack of a better word — habits and practices we’re not seeing but should be. If you recognize your organization in any of the following descriptions, stop and consider the advantages of rethinking your approach and trying something new. 

Thoughtful investments in information technology 

Curiously, the halls of academia don’t echo with the crisp beeps and metallic dings of cutting-edge IT. When I visit campuses in my work, I’m always amazed at how often I hear the rattle and whir of photocopiers and laser printers. The high number of schools operating in the old “paper world” is astonishing. Consider the benefits of entering the high tech, paperless realm: 

  • Environmental stewardship — You can cut down on waste by investing in the latest information technology, which not only saves money in paper supplies but also time. And remember that student populations — your customers, so to speak — are younger, and this demographic is appalled by the heavy use of paper.
  • More efficient reporting — The paper world loves Excel spreadsheets for net assets, endowments, or preparing financial statements. Building and maintaining spreadsheets is cumbersome and inefficient. There are many excellent IT systems available that perform all your reporting functions in one tidy solution.
  • Online textbooks and testing tools — Your students are wired in every aspect of their lives. They don’t need the big, heavy textbooks of yore and are more than comfortable with electronic learning tools. You should be too. Class materials, assignments, and tests can all live online and be updated easily and more cost-effectively than their printed version. Many campus bookstores aren’t profitable; textbooks have short shelf-lives with constant updates; and textbook exchanges are tedious and costly.

Most schools are beholden to intense regulations and feel the pinch of tightening purse strings. Streamlining your IT can help you better comply and ultimately rein in unwieldy waste and expense. The best IT plans thoughtfully support your business objectives and institutional needs. 

Consistent, thorough enterprise risk management (ERM) assessments and internal audits 

Too few in the industry undertake these worthwhile efforts, and many that do go about it with lackluster objectives. 

An ERM assessment helps you evaluate your exposure in non-financial policies and protocols. Your school should conduct these regularly, and not just among high-level personnel or in a few select areas; these reviews should target the full palette of institutional risk from executive-level to rank-and-file practices and procedures. Look at things like access control of your IT environment, potential lawsuit impact, student housing, hazardous material, financial vulnerability and utilities — all areas meriting strict protection. Vulnerabilities in any of those could come with serious and costly consequences. The Committee on Sponsoring Organizations (COSO) of the Treadway Commission has an excellent, highly recommended model to employ when shaping an ERM assessment. 

Equally important, an ERM process can help you gauge the appropriateness of your budget allocations. Budget allocations can be influenced by politics or favor “pet” projects or other highly visible undertakings. An ERM process helps communicate the most significant risks to the appropriate levels in the organization. I am reminded of a situation where a facilities group was so proudly focused on cost-cutting that it overlooked safety protocols. It only learned the error of its ways when a neglected student union building collapsed. A good ERM process could have identified the issue and potentially averted injury, liability, and other reactive costs. 

Likewise, internal audits keep your organization accountable on the financial and operational fronts and reveal any flaws in transactional processes. Testing your internal controls fortifies the efforts of your external auditors (whose focus on materiality tolerates a higher threshold of error than you would generally find acceptable) and helps seal up exposure to risk. 

Rigorous ERM assessments and internal audits should be fluid, ongoing, and ever-changing events at your school. Assemble a team, articulate processes, and get support and directives from executives and governing board members. 

Controlled fiscal agency 

You may not be fully aware of the risks that come with your benevolent acts of fiscal agency. Fiscal agency is the administrative shelter your institution extends to groups that sheltered under your institution; in other words, you are responsible (in every meaning of the word) for all campus group activities — groups like the Glee Club and the Young Democrats and the Francophone Society. 

These campus groups are well intentioned, but they often operate without much oversight. I don’t mean to strike fear in your hearts, but consider some of the possible scenarios: An untold number of bank accounts could be out there because someone 20 years ago was given your school’s employer identification number; or the volumes of off-financial statement activities (e.g., secret fundraising) that may be happening without your knowledge; or the club that joyfully discovers the perfect political candidate to lavish its funds on. Most institutions have some safeguards in place, but few really possess the mitigating controls that can keep your school out of regulatory hot water and IRS scrutiny. 

Make sure that all groups covered by your fiscal agency strictly follow the same institutional transaction protocols. Run all club activities through your internal control system to thwart any improper disbursements and accurately capture all payroll or contracted (i.e., 1099) transactions. 

Closely managed relationships with associated organizations 

Associated organizations (OAs) are legally incorporated but explicitly associated with their parent institution. These are your school’s supporting foundation, housing corporation, or alumni association. An OA typically bears your school’s name and acts on behalf or to the benefit of it while operating independently. 

OAs do great work and enhance your public image and mission, but you must deliberately and carefully manage your relationships with them. Too often, we see a lack of formal direction in their creation and oversight, allowing OAs to act or make decisions to the detriment of your school’s reputation or mission. The most prudent way of aligning OAs with your school’s objectives is by way of a memorandum of understanding (MOU). An MOU defines expectations and sets parameters on each of your OA’s activities and communications. Your school’s and your OAs’ governing boards and legal counsels can work together to draw up clear and diplomatic MOUs. 

Consistent operating systems 

Schools are necessarily made up of divisions and departments. Usually, some of these divisions and departments have subcultures and detached operating systems — separate spreadsheets or homegrown systems to record activities. They may develop policy nuances and procedural intricacies and supervisory quirks and preferences all their own. This can complicate information retrieval or understanding from an institutional level. Some of these separate systems have caused issues with student transfers, for instance, or payment processing or employee relocations. They generally arise from personal idiosyncrasies rather than capacity or usability of the institution’s systems. 

If I could dream up a higher education operational utopia, every department would seamlessly interact within a blissfully uniform, efficient, interdivisional system. But we all know utopia is just another word for clinical tyranny, so how about an occasional Kaizen exercise instead — one that brings departments together to brainstorm some moderate efficiencies and improvements that save time and eliminate waste? Enlisting your people’s ideas and insights on operational excellence (a more noble pursuit than a utopia) helps build consensus and foster collaboration. I wish I saw more of it in our industry. 

What all these “non-trends” point to are opportunities for your school to better manage risk and reduce waste and costs wherever possible. And as administrators, they offer leadership and career growth goals worth reaching for. They deserve your reflection and evaluation. 

How we can help 

Administrators and educators need a strong vision and guidance to position schools for long-term success. CLA higher education professionals are always available to discuss your institution’s goals and the issues of the day. Working together, we can develop business models and offer ideas rooted in industry best practices. 

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