Ricardo Azziz has held numerous executive positions in higher education and led the merger that resulted in Georgia Regents University, now Augusta University. He is principal at Strategic Partnerships in Higher Education, or SPH, Consulting Group.
He writes the regular Merger Watch opinion series on corporate restructuring in higher education.
Headlines often refer to colleges and universities as taking one type of action or another — say “University of the Arts land $8.3M in bids for 2 buildings,” or “Gannon University and Ursuline College announce official merger deal.” Yet colleges are inanimate.
We should be clear — institutional decisions are not taken by inanimate objects. They are made by the college or university’s leaders, after variable periods of reflection, data gathering and discussion. However, the need for tight headlines often underemphasizes the value and critical nature of leadership in determining the future — in higher education and beyond.
The higher education landscape is changing rapidly, and generally not for the better. Consequently, more institutional leaders will need to consider what other higher education experts and I have termed “Big Scary Change,” i.e., mergers, acquisitions, closures, corporate conversions and major strategic partnerships. Not surprisingly, in a previous analysis my coauthors and I identified a “committed and understanding governing board” and the “right leadership” as the No. 1 and No. 2 key elements, respectively, of higher education merger success.
Ricardo Azziz
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My team and I work closely with these dedicated — and often rightfully anxious —leaders, including college and university chief executives and their boards, as they consider and navigate the choppy waters of “Big Scary Change.” This work leads me to desire three wishes for higher education leaders in 2025, namely that they:
- Be disposed to accepting the facts.
- Be willing to explore all strategic options.
- Be agreeable to accepting external help.
First, accepting the facts may sound obvious. But I’ve witnessed much magical thinking in executive offices and boardrooms in colleges and universities across the nation.
If an institution’s enrollment has been declining continuously for a decade or more, perhaps with overall full-time equivalents falling more than 35% during that time, then expecting that trend to change in the near future and return to levels observed in 2013 is simply unrealistic.
If an institution has been continuously running a deficit while leveraging market gains in its endowment and the occasional unrestricted philanthropic gift to balance the budget, then expecting this trend to suddenly reverse reflects a degree of magical thinking.
Remember also that simply comparing the numbers of one year to the next can be extraordinarily misleading. Important trends can only be recognized when at least eight to 10 years of data is reviewed. Yet too often executive leaders and their teams are often unable or worse, unwilling, to present this data to their boards.
While magical realism can work well in literature, it generally works poorly when planning for the operational and financial realities of a college or university. As author Jim Collins reminds us in his book “Good to Great,” effective leaders must be willing — and seek — to face the brutal facts.
Second, institutional leaders should be willing to explore all strategic options. However, to explore all strategic options, institutional leaders must possess three attributes: They must have the necessary expertise, be willing to dedicate the necessary time, and be able to actively seek the knowledge required to meet the challenges facing higher education.
To effectively explore all strategic options, higher education leaders — including chief executives and their teams, and the governing boards that they answer to — must undertake regular and intensive strategic planning. At minimum, they should do this on a yearly basis.
With the financial, market, demographic and regulatory environment changing rapidly, boards and executive teams must be willing to accelerate the speed at which they stay on top of emerging trends.
Higher education leaders should be reminded of the quip attributed to the late Jack Welch, former CEO of General Electric: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”
Exploring strategic options in a regular and timely manner also demands being willing to understand all strategic options — not just those that nibble at the edges of the problem, like the myriad of tactics marketed to increase enrollments, brand recognition, academic offerings and cost cutting.
Higher education leaders should also deliberately aim to understand the place and role of major restructuring opportunities, including mergers, acquisitions and even planned closures.
Understanding the power, opportunity and challenges of these major restructuring events (i.e., Big Scary Change) does not mean institutional leaders need to ultimately pursue the option. But the exercise will permit them to be more familiar with, and less anxious about, considering these major restructuring events if needed. In the end, higher education leaders should keep in mind that markets with massive excess capacity, rising costs and decreasing demand over the long term are ripe for consolidation.
Third, higher education leaders must be more willing to accept external expert assistance. While it may come across as self-serving considering the services my company provides, the reality is that undertaking — and even considering — major restructuring events, such as a merger or planned closure, is not something that most higher education leaders have actually done before.
College leaders shouldn’t underappreciate the complexities and nuances of these events, either when exploring them, or when actually negotiating and implementing them. Further, leaders should recognize their limited bandwidth to address the many actions required to ensure an initiative’s success, particularly since they also need to continue to focus on managing their institutions as best possible.
While keeping heritage and history alive in a merger requires careful planning, doing so in a closure — even a planned one — is difficult. It is then my hope and wish for 2025 that college and university leaders will heed the advice I’ve laid out — and do so before they lose all remaining brand, financial and enrollment assets that make them an attractive partner, or before they miss out on potential opportunities to rapidly enhance their competitive strength.
