How Educational Institutions Can Sustain Success For The Long Term

Three successful educational institutions are concerned about their recent gradual decline and the impending termination of government funding. Why were they originally successful; why has their success declined; and what should they do to reverse the downward trend?

As an education and business consultant, I conducted a review of three non-American educational institutions receiving American Government funding: (1) a private secondary school funded for seven years; (2) a private post-secondary college funded for nine years; and (3) a post-secondary independent institution funded for fourteen years. Due to the global financial crisis and the re-alignment of funds to the country involved, funding was to be terminated for all three institutions within the next twelve months.

In the initial years of funding assistance, there were virtually no competitors. All three institutions were leaders in their field with solid reputations and international respect. They still are. They produced top-class graduates who gained work easily. They still are. They brought international experts to their country as guest lecturers, whose advanced “free-thinking” knowledge was well sought after. They still are. Over eighty percent of graduates of each institution either continued their studies in America and Europe or gained leadership positions in private and government organizations. They continue to do so.

All three successful institutions took a downward trend in the previous two years. Their competitive edge waned, enrolments declined, the urgency to seek funding from other sources put a strain on lecturers, and attracting international guest lecturers cost more each year. Why? Conflict with their neighboring country made tourists and international investors nervous and the global financial crisis impeded the capacity of participants to afford elite, quality education. However, these two factors weren’t the cause of the institutions’ downward trend. The quality of courses, lecturers, training, and services did not decline - to their credit they all maintained their strict selection criteria. But they were all facing tough times amid continual and rapid government reforms.

The key factor is this: over the past ten years other institutions in the country emerged and existing ones strengthened, rising to nudge the three institutions off their unique perch. The three institutions no longer have a market niche, no longer have a monopoly on the delivery of education and training, and no longer enjoy a unique reputation. They are all under threat of losing their “number one” status in their field. Not only that, the funding provided by the American Government is due to cease.

Did complacency, lack of foresight, lack of innovation, or a rigid adherence to their niche market hamper their continued success? One of their failures was not being intimately familiar with their competition. By the time they realized that they had competition, it was almost too late. Institutions that are not successful spend time and money on becoming successful. Institutions that are successful at their outset often don’t.

To address their downward trend, the institutions have been focusing on reducing their debt, re-locating to cheaper premises, providing shorter fee-paying courses, establishing programs outside their core business, aggressively marketing their core programs, fundraising, and writing submission for additional funding.

Should they stick with their niche or diversify? Should they offer more of the same or seek to innovate? Should they chase fads (become opportunistic), do only the “tried-and-true” strategies, or re-define their business strategy? Should they now charge for services that were once free? Should they reduce or increase their fees? Should they become more homogenous within the market? Should they change or are they in danger of throwing the baby out with the bathwater? How good is progress if customers aren’t buying into it?

With one year to the end of their main source of funding, now is the time to think and act strategically to reverse the downtrend before it becomes an irreversible decline and a disaster. What needs to happen? What do institutions need in these competitive and changing times?

1. Diversify: They need flexibility, diversity, and quality (of selection criteria, products, and services). Not only do they need to be responsive to the changing market, but they need to be “one step ahead” of it - just like they were when they were first established.

2. Review Portfolio: Not only do they need to be innovative in course and service development, but they also need to discard, restructure or reinvigorate what has not been performing - and who have not been performing.

3. Review Management: They need to take a rigorous review of management - staffing, philosophies, goals, objectives, communication strategies, and roles and responsibilities (the “whole package”). This may involve making difficult decisions.

4. Plan for the Unexpected: They need to plan for the unexpected - plan for when activities don’t go according to plan.

5. Monitor the Opposition: Monitor competitors to know where the institution is placed in terms of pricing, courses, parental influence, student performance, and student satisfaction in comparison with others.

6. Self-monitor and evaluate: They need to effectively and efficiently monitor and evaluate their own progress, either internally or through an independent external evaluator. Done effectively, monitoring and evaluation (M&E) are not just fancy (and complicated) activities; they are useful in taking an honest perspective on what is working, what is not working, and why. M&E can determine benchmarks and set realistic targets. Then institutions can strategize how to reach their goals and objectives, step by manageable step. And they can continuously refine and improve their plans to keep one step ahead of the competition.