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What’s It Going to Take?

It’s 1854, in the Soho of London.  The city’s inhabitants are packed together more densely than today’s Manhattan and the city is an open sewer.  What starts as a mere handful of once-healthy men, women, and children who turn suddenly and violently ill turns into a full-blown cholera epidemic that ultimately claims more than 600 lives within less than a month.  Dr. John Snow, whose mapping of the outbreak that identified the source of the problem as a single public water pump on Broad Street, faced an uphill battle with public officials who refused to believe anything but the then-prevailing theory that disease was spread by “noxious air” (it would be seven years later that Louis Pasteur would introduce the theory of “germs”).  How many people must die, Snow plaintively asked public officials, before they would take action and close down the pump?

Indeed, we often encounter today, in our daily lives, examples of the same kind of “how many must die” before a traffic light or stop signs are installed at a dangerous intersection, guardrails are erected on dangerous mountain curves, or “dangerously social engineering” laws are passed that require parents to strap their children in autos into either seatbelts or infant safety seats.  One, two, or three lives lost … they get scant and fleeting attention.  But once the “tipping point” occurs — that point in an epidemic in which fatalities reach a critical mass and begin to spread at a rapid rate — the topic tends to get some attention … perhaps some action.

In the last week or so has come news of small liberal arts colleges facing the possibility of closing, merging, acquiring or becoming acquired, or — in the case of Sweet Briar College in rural Virginia — trustees making the decision to rapidly close the doors of an institution with a good reputation while sitting on a $94 million endowment. The U.S. Department of Education publishes an annual watch list of schools that have failed its financial-responsibility test. That list has grown by more than one-third since 2009.  Fully one-third of all colleges and universities in the nation are significantly weaker financially than before the 2008 recession and are on an unsustainable fiscal path.  Predictions are that another 25% of fragile colleges will join them.  Small wonder that there is renewed speculation that this is the new norm for U.S. higher education.

If that is indeed the case, then what some naysayers characterize as a small number of instances of disease is approaching that tipping point and about to go viral. Those naysayers will point out — quite accurately — that there are plenty of small colleges that are surviving, some even thriving by engaging in innovative approaches to fiscal management and academic prioritization.  But I would argue that all of that activity, noble and creative though it may be, is a lot of energy within a broken business model and merely postponing the inevitable.  Our patient may be out of intensive care, but the underlying malady has simply gone dormant, and when the fundamental conditions of the environment haven’t changed, the patient is walking back into a perfect storm of runaway costs, consumer dissatisfaction, increasing government scrutiny, employers’ lack of confidence in graduates’ preparedness to enter the workforce, and a dangerous trend towards impatient and rogue governing boards.

The current business model in higher education is the public water pump in Dr. John Snow’s battle to identify and remedy the source of the cholera epidemic in 1854 London.  Until the fundamental business model of colleges and universities changes, stay tuned for a growing outbreak of closures and consolidation in the sector.

Written by

Strategic turnaround consultant and writer.

2 thoughts on “What’s It Going to Take?

  1. Thank you. I think you’re on to something here. How can we define and preserve the core contributions of higher education, and create new kinds of organizations -nimble, responsive, just and effective — to steward that core? I’m looking forward to reading your thoughts on this!

    1. Lucinda, thanks for your comment and you’ve asked the fundamental, core set of questions. The fact you’ve raised the questions means we’ve made a start towards answering them! Stay tuned for more thoughts from this side of the trees!

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