Episode 104: Business Officer Survey with Doug Lederman

What we're really trying to do is tell business officers a sense of sort of how their peers are thinking about some of the common issues they're facing. Welcome to FOCUS, a podcast dedicated to the business of higher education. I'm your host Heather Richmond and we will be exploring the challenges and opportunities facing today's higher learning institutions. In today's show, we caught up with Doug Letterman, editor and co-founder of Inside Higher Ed to discuss the most recent business officer survey. Thanks for joining us today, Doug. Great to be here, I really appreciate it. Looking forward to talking to the folks. Sounds good. Well I know that Inside Higher Ed does a lot of research each year on what's happening on college campuses. One study that is always top of mind for us is the business officer survey. So can you take a quick minute to give us an overview on that survey and maybe some of the key points business officers are working on. Sure, so you know we started a series of surveys about I think this is our ninth year and we added them into our daily mix of our news coverage and other things to try to provide some sort of national - to try to inject national data into the conversation and so we survey business officers as well as presidents, provosts, admissions officers. We just published our survey of faculty view of technology, and again all of these things are designed to try to help campus leaders understand at a national level what their peers are thinking about and doing about the common issues and challenges they're wrestling with. Most of you listening may be out there sort of feeling like you're kind of on your own little island and I think it's helpful for people to know that their problems are similar and that there may be solutions out there. So in this survey in particular we survey and there's some we had about for a little over 400 business officers participate this year - nationally representative sample - and we asked them a set of questions. Some of them are things we asked over time and some of them are new to try to take their pulse on kind of what's top of mind. We asked, we have this sort of set of questions that we ask each year about their sort of confidence level - about the confidence in their financial outlook over a five and ten year period. And interestingly there was a nice increase in confidence in the near term like about the five-year outlook to sixty- three percent up from fifty-six percent and then basically stable flats at about half of business officers confident over a decade. But you sort of have to peel down to go down a layer and at the sector level really significant differences. Public masters and baccalaureate institutions sort of a non flagship public universities, big drop in in their confidence is sort of agreeing with my confident my institution will be financially sustainable over a decade or semi a stable down to twenty eight percent from fifty two percent. So like a really significant drop and then private four-year colleges had been at forty four percent last year. They sort of shot up to fifty six percent this year. Those are the sort of liberal arts colleges that everybody's talking about and that we're seeing some number of them close. So that's kind of a really interesting sort of just; it's are the closest thing we have to a consumer confidence survey. We asked some somewhat similar questions of other leaders presidents and others and business officers tend to be the most - I don't know - pessimistic, most cautious and conservative. And then we ask a slew of other questions. And we will probably talk about some of them but we asked about mergers, we asked about the coming the likelihood of a coming recession and how how much impact places people expected, how well-prepared they thought their institutions were for. There's a whole set of questions and what we're again what we're really trying to do is tell give business officers a sense of sort of how their peers are thinking about some of the common issues they're facing. Yeah that's great. It's a good way to get that data and information and in that way. So I know the cost of college college debt and their return on investment are really hot topics today. Can you share how business officers and college administrators are addressing these concerns? Sure, so it's actually it's absolutely sort of a primary topic and especially because it is I mean we are in an era I fully believe that we have entered an era of constrained resources. And most institutions whether they're public or private are sort of operating - or there may be the occasional governor here there who throws a bunch of money at higher education or some you know donors and everybody's out raising money and it will continue to be money flowing into college and universities - but I think in general most institutions are going to be operating - especially given the demographics which is a major issue sort of in the sites of higher education in terms of you know traditional the number of traditional aged students in many states is declining or will be declining over the next decade and colleges. so there's there's enrollment challenges and there financial challenges. So what we are trying and so there is a and there's a whole other set of issues on the other side about sort of people questioning whether colleges are priced too high and questioning particularly the value that they're getting. And so basically what institutions are sort of trying to figure out is how to - there's a public perception case that some of them feel like they want to make in that they want to they need to do a better job making the case that they that their degrees have value and that they are providing value to their students. There are also some some actual tactical financial decisions. Can we lower tuition? We're seeing a bunch of institutions reset their tuition to a lower price point. This is particularly on the private college side. On the public college side were much more seeing freezes than resets. The resets involve private colleges mostly sort of saying we've set our tuition at fifty thousand. Hardly anybody's paying that so we're going to cut it to thirty five thousand and make it sort of more real. That the the sticker price more real with what people are actually paying. There is a lot of discussion about we are seeing more interest, we have historically seen more interest from administrators, on trying to increase revenue than to cut costs. And I'm differentiating between cost and price here. Prices obviously what students get charged students or families get charged. Costs is what the institutions have to spend to deliver the education and cutting costs is hard especially in an enterprise like higher education where the vast majority of most colleges budgets are made up of people. So it's hard to cut costs without cutting into jobs and eliminating positions or you know pulling back. So there's a lot more interest right now and there's experimentation going on in being more effective and efficient. There are places doing a lot of things with energy and increasing sort of some increasing use of shared services and with technology and other in other realms. But those are those tend to be pretty hard. They require a kind of institutional change that can be difficult. So we're seeing a lot more focus I would say by a business officers and particularly by other camp by presidents and provosts on trying to increase revenues by finding new sources of revenue or increase enrollment in various ways. Yeah that's really interesting and you do have to look at different places, right. So what types of revenue sources are these college administrators looking to expand or introduce into? We gave them we gave them a list. We asked specifically about sort of how well what kinds of where they were turning for - actually before I - the one thing I want to add on before we do that on the cutting cost, we did ask there is a seems to be at least attitudinally presidents - or business officers - being more open to the idea that they can cut costs without hurting - without really hurting the quality. And that's obviously a long-standing tension in higher education; is sort of can you can you continue to do what you want without - by spending less. And this year for the - look, for the last two years forty two per only the number of business officers saying that they could disagreeing with the idea that they could cut make additional and significant spending cuts without hurting quality drop significantly. So more business officers agreeing or fewer disagreeing that they can cut costs without hurting quality. So there is some seems to be a little more willingness to entertain the possibility of cutting cost. So anyway on the revenue side which is what you were specifically asked about most when people are talking about sort of - we asked many - we said my institution sees the most promise in which of these potential all revenue sources and we asked gave them a list and the top choice by a good bit was alternative credentials certificates, non-credit certifications and I think that's going to be an area where I think we see a lot of activity. We're doing an event here in DC tomorrow about sort of the state of master's level education, graduate education, and we're seeing a lot of activity there by people sort of coming up with shorter term credentials of various kinds; recognizing that particularly for people who are sort of focused on workplace advancement, which is where a lot of people a lot of people's interest in higher education comes. Places are looking for sort of shorter, faster, less expensive ways to get people some kind of credential that will help them either get a job or get a promotion or advance in their career in one way. So and some of that a lot of that is enabled by technology - sort of a shortening of the credential the the chunking of the curriculum. The next area where people are saw promised was in creating programs for new audiences. Senior citizens and other realms about just about half of respondents said that they were looking at that. Expanded use of facilities about four in ten business officers said that. A lot you drop pretty far down to outsourcing we also asked about and only one in five business officers said that they thought they would go in that direction. So you know there's there's I think a lot of around for new forms of revenue but I'm not sure there's a ton of easy answers out there. I think most institutions are going to remain pretty dependent on tuition and fundraising and on the public side, state funding. Right I know a lot of the schools that we talked to - again they're looking for those unique revenue sources - or how do they look a little bit differently and so I say for any of these schools that are looking for these alternatives; how are they determining what to pursue or there's all these ideas, but how do you put those into reality? Yeah well listen this is a higher education is an enterprise that historically has changed pretty slowly. And it gets a lot of criticism for that in some quarters and people say oh we've got to move faster. Listen I think most institutions do need to sort of change how they make decisions and and but I'm just want to be a sort of I'm a little bit of a I want to be a little cautionary about I'm not sure fast change is necessarily the best change. So I well I think there are I think there's no question that higher education institutions in general probably need to sort of speed up the pace at which they experiment and adapt and adopt new things. I think it should be done that way through experimentation and rather than sort of and sort of measured and thoughtful analysis then by sort of rash adoption. So what what I think we are seeing that is heartening. We asked several questions in the survey that are designed to to sort of get at that, and among them we we asked one new question that I thought was pretty interesting. Was about sort of the culture of decision making and only 38% of business officers say that their colleges have the quote right mindset to respond quickly to needed changes. 38% agreed as I said about 30 percent disagreed and then the rest were kind of in-between. We also asked whether they had their institutions had the right to and processes to respond to needed changes and it was roughly similar there about a third - little over a third - thirty five percent agreed and twenty-nine percent disagreed. So pretty devoted a lot of division or uncertainty about whether these business officers felt that their institutions had sort of the tools and the mindset to make changes and to consider really significantly new ways of doing things. In terms of the other sort of area that we asked about though when it comes to sort of how decisions are made was about the use of data to to sort of drive decision making and whether business officers felt that they had the right the right data to make informed decisions because it was obviously a lot of talking in higher education and elsewhere about sort of data informed decision making. And so basically - what's I don't know - probably a little concerning is that on there were very few things that the business officers felt they had sufficient information on. About fifty four percent either agreed or strongly agreed that their college has the necessary information to decide which academic program should be eliminated or enhanced. And a little over half said the college had the needed information to make decisions about the efficacy and the you know the value of specific academic programs and majors. But on everything else that we asked about performance of active technology that both the administrative and academic side performance of specific administrative units, minority of respondents agreed that they had the right data. So we're still a pretty long way away I think from people feeling like they have either the data or the tools or the mindset to sort of adapt - - in a very fast changing environment yeah as much as they'd like. And so that's that's something that places need to clearly work on. Yeah that's interesting and in in terms of data because I know that gets gonna toss around a lot did was there any specifics on the type of data that they're looking they're looking at student engagement data, data from systems, was there any clarity on that. Well not it not in this survey, but I mean from from our coverage generally, we are I mean the biggest as I said if I were to sort of list the biggest pressures on colleges right now is there's obviously a set of financial pressures, and I actually think the CFOs probably have pretty good information about sort of - well there's there's some data in here that are a little concerning about how far ahead they're planning and whether they are budgeting sort of over a long enough horizon - but I think I would say right now most of the focus in higher education, I would say is on Student Success data of various kinds. I think most institutions have recognized the at least rhetorically whether or maybe not as much in action but have recognized that it's a lot easier and more cost-effective to keep the students you have than to constantly try and enroll new ones. So and there's also a lot of external pressure on institutions to sort of shift from an era where sort of Student Success was kind of a student's problem. It's very much now the institutions problem and it's the entire institutions problem. It's the Faculty's problem not just the 10 or 20 or 50 people in the academic success unit of the administration. And so I think there's a lot more focus now on understanding where students are getting waylaid in progressing through their institutions. And so on retaining students and there's a lot of activity that and the challenging thing I think for most institutions is figuring out kind of what's working. And that's an area where you know if you're doing 10 different things to try and increase student success and you show some success. Figuring out which things actually brought that success about can be challenging, but a better problem to have than to see to see that students aren't getting better and your success that students aren't becoming more successful. Yeah absolutely so obviously there's a lot of change happening in higher ed right now as you mentioned from student expectations to new technologies. It's really that overall experience both inside and outside the classroom. So do you think today's college leaders are ready to respond quickly to these needed changes? No, probably not and actually our survey of presidents - I think which we published back in March - showed that even the presidents don't necessarily think that they're well-prepared. Are uncertain and actually the survey of Provost that we do asks similar questions and there are areas where they really don't feel well prepared. Some more than others. We also are seeing I mean I think higher education has to do a much better job of preparing future leaders. We have a very significant graying of the higher of the college presidency and I think the business officers - I haven't looked at has to look back at our survey this year but I think you know we had a really significant the business officers. Yeah, seventy-five percent of the business officers and who responded to our survey were over fifty. Thirty percent were over sixty. So there's a whole lot of experience, but that also means people who were sort of baked in a different era and not accustomed to this pace of change. And so I think there's I mean and there are some phenomenal leaders in higher education, but I think we're sort of on the cusp of a of a generational shift. We sort of need to be because basically there's a whole lot of presidents and other senior leaders poised to retire. And I mean higher education has had not historically done a fantastic job of preparing next generation leaders; and so some of the things you know in our survey of - I can't remember if it was provost or presidents, but they felt least prepared for digital in the digital era. And that's kind of a problem, given that that's the era that we are in and that it is taking more charge taking more hold. So I think, I think institutions, I think leadership are mostly important and I think the sort of difference between institutions that thrive and those that don't do so well in the next decade is increasingly going to be decided by how well they're led That's partly by the administration by those administrators it's also by the boards. So there's a whole lot of factors. These are very complex institutions and you know I think leadership is hugely important and I think higher education absolutely needs to do a better job preparing people for leadership. We see a lot of institutions turning to people outside higher education, which obviously can be an effective way of doing things, but it's I don't know I think it's pretty also pretty risky because if people don't understand the culture. So this is definitely an issue that the people on boards particularly are gonna have to focus on. Absolutely I know we see that a lot of as you said there's a transition and shift a lot of folks who are retiring and they're having bringing up new leadership and needing to really learn the culture, but learning new technologies a new way of doing business and I know we talked before looking at really technologies and are those is that what's gonna be leading the change or is it really this leadership in your opinion? I think yeah I think it's awesome technology everything colleges do in one way or another is going to be increasingly influenced by technology, but to me it's that's a technology remains mostly in most cases a tool it's not a medium - on the academic side it's a mode of delivery. On the administrative and other sides it can be a source of efficiency, but I think that the sort of the core things that colleges do might be improved by technology and probably will be improved in most ways by technology, but the core things are really where the institutions need to focus. Technology can enable and technology can as I said it can speed up, it can spread, it can broaden the reach of institutions, etc. But in terms of whether institutions do things well and are effective and are ethical and are all the things that you want your institutions to be; that's increasingly going to be about leadership. So obviously leaders need to understand the environment they're operating in and technology is going to be increasingly an element of that environment, but I don't think it's like if I were to tell a would-be president you know to focus on one thing; it wouldn't be understanding technology, it would be understanding the mission of your institution and how you can best achieve it. And increasingly recognizing that technology is probably going to be part of how you achieve it. Absolutely and I like that you say that technology is really the tool and as with any tool it's only as good as how you use it. So just bringing technology on you need to make sure you have the plan and strategy in terms of how to best fit your institution. A hundred percent. Yeah, so Doug, are there is there anything else our listeners need to know about or be prepared for this coming year based upon the survey results and where you you know really see the environment in higher education? Well I I think I think there's a pretty significant likelihood that we end up not a force - you know I'm not going to be predict the future - but I think most of the stuff I read envisions a possible - if not likely - recession in sometime later this year and I think that's going to have potential impact on how institutions do achieve their missions. We asked them to survey about forty five percent of our respondents expected a recession in this in 2020. And 36% weren't sure; about 59% we're worried about the impact; and only 17% said they they weren't worried about it; and about 55% thought they would be better prepared for a recession and they were in 2008; and 17% thought they wouldn't. So I think that's one thing that's probably sort of on the horizon and it will probably affect institutions. What's interesting is that the way higher education has historically worked a recession could actually be good at first for institutions in certain ways because higher education is counter cyclical and people who are - particularly those who are - sort of on the who are focused mostly on Higher Education for what it will do for them professionally, tend to veer back into to get more education when there's a bad economy versus taking a job when it's available. So there are ways in which a recession could actually help the higher education enrollment picture, but you know there are a whole bunch of other ways where it could have a pretty negative impact. So that's just an area of uncertainty that I think is ahead and then I think the sort of other area that I think is just increasingly a focus for and has to be a focus for everybody is on sort of equity of access and success in higher education. There is a lot more attention being paid to how well whether colleges are sort of serving the increasing segments of our society that have historically been - that are growing - and that are also the ones that a higher education has served least well over time. Adult students, and veterans, and those from certain underrepresented minority groups, and those are the populations that are growing at a time when overall higher education enrollments are likely to flatten or fall. So colleges are - that's sort of just a big issue sort of hanging out there - and I think it's an area that a lot of most colleges have worked to do. So I also want to thank TouchNet for having supported this survey. It's very difficult for us to do the kinds of research that that we hope we provide to the higher education market without support from great partners like TouchNet. So I appreciate that. Great. Well I appreciate that too and I was just gonna say that listeners can read the full survey results on our website at touchnet.com in our knowledge center. Again, thank you, very much Doug, and have a great day. You bet. Thanks for tuning in to this episode of FOCUS and don't forget to subscribe so you can stay up-to-date on the business of higher education. For more information, check us out at touchnet.com.