Article
Scale matters
Unlocking agility, innovation and cost efficiency
Jan. 9, 2025 · Authored by Daniel Greenstein
I promised solutions to help higher education navigate tremendous headwinds, so let’s get started. And why not start big with the advantages of scale?
Scale matters in higher education as it does in other industries. It matters a lot. By expanding their operating scale, universities and colleges (hereafter higher education institutions or HEIs) can:
- Improve student affordability, access, retention, and graduation rates
- Introduce agility in educational programming and innovation because faculty and staff have greater breadth and depth of expertise that can be assembled in new ways to address new and emerging needs and problems;
- Spin up intimate student learning opportunities and living experiences, mimicking and possibly improving upon distinctive educational experiences offered by small-scale liberal arts colleges;
- Collect and mine data to improve performance in everything from enrollment and graduation rates to efficient facilities and human resource management, alumni and donor giving; and
- Drive down unit costs of business and educational functions, investing savings in improving student access, affordability, and outcomes.
There is no single pathway to scale. Some are well-known; others are just now emerging.
Organic enrollment growth is the most well-known. Think of the tremendous growth from 1990-2010 at public institutions like UCLA and the University of Central Florida among others. It reflected demographic trends (the rapid expansion in the size of the college-ready, high-school-leaving population associated with the baby boomers and their children), relatively low prices, and, in many cases, locational advantages. Outside of a handful of states like Tennessee and Texas, where the high-school-leaving population continues to expand, the only reliable path to enrollment growth will require transformative change in education and business models.
Shared services took off in the 1990s by borrowing technology from the corporate sector that systematized routine business processes and enabled them to be offered once for multiple HEIs. By scaling back-office functions (e.g., payroll, HR, procurement, IT infrastructure and enterprise applications), shared services captured efficiencies and were typically found in “systems” – HEIs responsible to a single governing authority.
Early front-office shared services may have introduced cost savings but were more appealing because they expanded academic opportunities. Research centers provided researchers access to equipment their home institutions could not afford (e.g., particle accelerators and telescopes). Smaller-scale, less capital-intensive efforts materialized in digital libraries (procurement, shared online catalogs, digital archives), HEI systems’ admissions and academic computing centers.
Today, back-office shared services are commonplace in systems and pursued by stand-alone HEIs through voluntary consortia and/or on third-party subscription or revenue-sharing bases. More interesting and more innovative is the action in the front office where shared educational programs are coming into fashion. By sharing programs, HEIs expand the number of degrees, majors and minors they can offer their students and enhance their competitive advantage (think of the Georgia System’s eCore, HBCUv, and the Pennsylvania State System’s aspirations after shared programming).
They will learn, as others have, that scale is not a matter of doing more of the same. It is a matter of doing virtually everything differently.
These opportunistic networks aren’t concentrated in a single sector. There are examples amongst private, public, large and small, urban and rural, fully online, and traditionally residential.
With the opportunistic network-building crowd, size, resource base, and tax status matter less than leadership and courage.
What is most compelling is that networks built to advance opportunity are driven by the desire to serve more students better. That mission orientation underpins a willingness to constantly renew and revise historic practices, even when that action is painful. In his book Broken, SNHU’s then-president Paul LeBlanc describes how the university transformed countless educational and business functions and leveraged technology and data so it could scale a student-centric, deeply human, and highly personalized approach to education. Unity’s president, Melik Peter Khoury, speaks powerfully about his experience redefining faculty-shared governance, enabling growth into underserved student markets. And Paul Quinn’s president, Michael Sorrell, speaks passionately about the work college as a full-frontal attack on poverty.
As a trained historian, I am more comfortable interpreting the past than predicting the future. Still, the industry is about to see significant growth in the number of institutions pursuing scale by every means possible. They will adopt the playbooks developed by those before them (well-developed for back-office shared services and in various draft stages for front-office shared services, shifted educational models, and networks). They will learn, as others have, that scale is not a matter of doing more of the same. It is a matter of doing virtually everything differently. Organizations operating at scale require significant shifts in governance, talent and cost-center management, basic business processes, systems architecture, and everything in between. They make new and fundamentally different demands on their leaders, whose roles change dramatically, requiring coaching, support, and transition.
Not all institutions that attempt to scale will succeed in serving more students sustainably and better. Still, given the industry's headwinds, the risks involved in scaling are lower for many HEIs than those involved in staying the current course. And those that do succeed will leap-frog forward in terms of their brand recognition and reputation, re-stacking the industry’s hierarchy, which, never fixed, is still rigid. More importantly, they will establish a foundation for US higher education to drive workforce development and social mobility and contribute to our nation's health and well-being.
Please note: All views and opinions expressed are my own.
