Surviving and Thriving in Challenging Times

Leveraging Capital Assets to Create Value

(College Planning and Management, June 2011 - by Scott D. Miller and Marylouise Fennell)

Increasingly, campus facilities have become a barometer of an institution’s success.  We’ve previously written about the need to leverage capital assets such as land and facilities to advance the institution as part of an overall strategic plan, especially when times are tough.

Writing in our book Presidential Perspectives (Aramark publications), our colleague Dr. Walter M. Bortz III, president-emeritus of Hampden-Sydney College in Virginia, states: “Ensuring that the campus has curb appeal and is filled with first-class technology, faculty and facilities helps to guarantee the necessary enrollment to keep the enterprise operational and growing.”  Investment in the nonacademic environment is critical to remaining competitive.

Managing cost and risk are paramount factors when embarking on new capital projects, warns Dr. Michael Townsley, former college president and noted higher education consultant.  He cautions that a sensible financial strategy requires

¨         Focusing resources on the main goal to be achieved by the project.  Because planning assumptions may prove false, Dr. Townsley emphasizes that risk management means cutting the probability of failure while reducing risk.  In our experience, here are several ways to offset debt and/or to reuse the project in another way to reduce capital and operating costs:

¨         Build with an alternate use. Contrary to myth, we don’t believe that all capital projects need to be put on hold until “times are better.”  Rather than throwing up buildings randomly, though, we recommend that they be built with an alternative use because unlike in the movies, when you build it, they don’t automatically come.

Student residences, for example, can be designed as garden-style apartments for rental should enrollment fall.  We also recommend:

Rent rather than build.

High commercial vacancy rates in many areas in today’s recessionary economy represent an opportunity for colleges to lease space in desirable areas at a competitive price, without the concurrent costs of upkeep.  Also consider sharing space with other institutions.

Use underperforming facilities to build partnerships. 

Entrepreneurial universities today are characteristically “aggressive and cooperative,” says Dr. William Flores, president of the University of Houston-Downtown, whose institution co-located a new campus in the northwest sector of that city at one of the state’s fastest-growing community colleges.

Land also represents a valuable institutional resource that cannot be allowed to become non-performing.  Playing fields and courts, classrooms and performing arts facilities can become attractive venues for community groups and summer camps when classes are not in session. By recruiting users whose mission and goals are synergistic with that of the institution, colleges can create a “win-win” while advancing both enrollment and financial sustainability.

One type of public-private partnership with significant potential is mixed-use developments permitting commercial (retail) and/or private residential use of a portion of college-owned land, often along the perimeters of campus.  President Joseph C. Rallo of Angelo State University, San Angelo, TX, a campus which has entered into agreements with commercial developers, points out that many institutions own tracts with unrealized potential that are not needed for future campus development.

“Given the uncertainties of future university funding, a mixed-use project can be an attractive entrepreneurial approach for others to explore,” Dr. Rallo writes in Presidential Perspectives.        

Seek synergistic leasebacks and business partnerships.

Leaseback arrangements in which institutions work with private investors to establish a separate entity to purchase land, construct facilities and in some cases, manage them, can offer tax and other advantages while creating access to new funding sources.  Likewise, many institutions have formed business partnerships with companies to build research labs, retail business and other facilities that benefit both the institution and the business partner.

Often, the “old reliables” of financing capital construction—bonds, loans, gifts and higher tuition—are insufficient to offset either the costs or the risks of needed capital investment. Joining the “arms” (facilities) race demands that presidents find ways to remain competitive while meeting rising student, family and community expectations and leveraging costs.

#  #  #  #

Dr. Scott D. Miller is President of the College and M.M. Cochran Professor of Leadership Studies at Bethany College in West Virginia.  Now in his third college presidency, he has served as a CEO for 20 years.

Dr. Marylouise Fennell, RSM, a former president of Carlow University in Pittsburgh, PA, is senior counsel for the Council of Independent Colleges (CIC) and a partner in Hyatt Fennell, Higher Education Services-The TCR Group

They have collaborated on six books, including “President to President:  Views on Technology in Higher Education” (2010) and “Presidential Perspectives: Economic Prosperity in the Next Decade” (2010.)  Both serve as consultants to college presidents and boards.  

Bethany Trivia

When was the men’s lacrosse team reestablished at Bethany College?

Click here to see the answer and other Bethany Trivia questions

Bethany Trivia

When was Cramblet Hall constructed?

Click here to see the answer and other Bethany Trivia questions.

New Technologies Redefine Business Leadership

(The State Journal, June 10, 2011 - by Scott D. Miller)
It’s common knowledge that the astonishing growth of communication technologies, especially highly personalized social-networking media like Facebook, LinkedIn and Twitter, is redefining how we do business. These realities have also found their way to the corridors of higher education.

As with most developments that influence our clients, how we respond will determine whether we will be truly responsive to customer expectations.

For a college president, multiple constituencies (customers) compete for attention and satisfaction: students, their parents, faculty, staff, alumni, foundations, corporations, public officials and a vast pool of current and would-be funders we call “friends.” All generally buy into our educational mission and programs. But as Charlene Li writes in the April 2011 issue of Currents, published by the Council on Advancement and Support of Education, “Leadership is about relationships, and because social technologies are changing the way relationships are formed and cultivated, leadership must change.” She advocates for an “open leadership” style that factors in the “new skills and behaviors” required by social networking.

I’m online multiple times during the day, promoting Bethany College students’, faculty and alumni achievements, events, honors, programs, athletic results and more. I have communication tools available to me that were unknown when I began my career as a college president two decades ago. But it’s more than a matter of , “I tweet; therefore, I am.” Bethany’s primary customer base—new and current students, faculty, donors—still depends on target marketing. We seek a certain student profile, a special kind of faculty member, an especially committed contributor, not only to keep the College viable, but also to ensure that Bethany retains its core identity and values. To keep these constituents interested in what the College has to offer, I take advantage of communication tools that influence their thinking and inspire their engagement; the more client-sensitive the message, the better.

Social technology enables me to make my message more immediate, more conversational and more quickly and easily accessed than do some traditional ways of mass communication, like direct mail. Most of all, social networking is interactive; I can have an ongoing, extended dialogue with Bethany’s audience. Still, as Li points out in her article, my fellow leaders in education and I must always build trust. That’s our real operator’s license.

Part of the process of building trust is honoring our institutional traditions. Colleges and universities thrive on the latest learning resources, but they are sustained by their heritage—the look and feel of their historic campuses, longtime professors adored by alumni across the generations, the pomp and circumstance of convocations and commencements. Like some product-based corporations that have resurrected their iconic mascots, slogans and jingles, higher education touts brand loyalty. Bethany’s “Boomer the Bison” bobblehead, in the likeness of our mascot, was a sales hit when we unveiled it at Homecoming last year.

We all know, however, that memory is short and loyalty fleeting. Social technology compels us to keep up with our audiences—our clients—wherever they go, and whatever they expect of us. Our constituents now lead us as much as, or more than, we strive to lead them.

As colleges and universities found themselves building more elaborate student centers, food courts, residence halls and fitness centers in the 1990’s in response to enrollment demand, and went wireless more recently, they have now discovered the competitive value of high-speed, interactive social networking—especially for students and younger (graduated within the last decade) alumni whose preferred screen is in their palms, not their living rooms.

The technology expands the conversation that institutions can have with their constituents—and that raises questions, of course. Just as the governance system of colleges and universities has few counterparts in conventional business management, similarly we in higher education will have to define how best to respond to the electronic tennis match of opinions, praise, criticism and creativity inspired by social networking. Being everywhere, interactively, via technology inspires its own problems and protocol.

For example, when educators respond electronically to an idea from a graduate, a question from an employee or a request from a student, we have to be mindful of the digital trail we are creating, one that can be easily shared with anyone with the click of a mouse. And, like those of any business, our institutional brands are subject to judgment by the consumer and now, through technology, pervasive comment. A college’s “product” is less tangible, however, less immediately gratifying than some other goods and services; the benefits of a customer purchasing a four-year, undergraduate, liberal arts experience, such as that offered by Bethany, will be realized over a lifetime. Yet social networking typically demands immediate information responses that cohere with overall customer satisfaction.

Despite the challenges and some pitfalls of using social networking, I find these tools to be invaluable to our marketing strategy. The fanciest admission viewbooks and the warmest letters of invitation from me are no match for today’s high-speed connectors—our technology-savvy, current and prospective students. They, our customers, are increasingly determining how we market, and how effectively we market, our storied institutions and our institutional stories. Our visibility and viability depend on mastery of these technological realities.

College presidents may or may not see themselves as Gary Cooper-like figures from “High Noon,” confronting challenges from every corner of one’s domain. Yet technology demands that we be quick on the draw and accurate in our aim, nevertheless. Business leaders have always had to be, but social technology has raised the stakes for leaders in the industry of higher education, as well.

If you want to be a friend of colleges or universities, you now have new ways of finding us.

Presidential Perspectives

(This month’s issue of Presidential Perspectives, a presidential thought series, published by Dr. Scott D. Miller and Dr. Marylouise Fennell, with support of Aramark Higher Education)

This month’s chapter is titled “Keep the Vision Alive: Growing and Building in Tough Economic Times”

www.presidentialperspectives.org 

Bethany Trivia

When was the national sorority, Zeta Tau Alpha, founded at Bethany College?

Click here to see the answer and other Bethany Trivia questions.

Prominent Voices, Achievements Bring Year to a Close

(The President's Letter, June 2011)

The end of an academic year is always bittersweet, a beginning for our newest alumni and a farewell to valued colleagues such as Professors Jay Buckelew (42 years) and Randy Cooey (45 years). As both retire, they become part of the legend that makes Bethany College so special, for their work is an example of the quality of teaching and service that is traditionally among our greatest strengths. Our traditions define us. Senior comps, the capstone project, diplomas still written in Latin, the graduation ritual, all link Bethanians across the generations. As many of our alumni tell me, the core experience of Bethany College remains amazingly constant through the decades.

Click here to read more.