McDonald’s is closing hundreds of restaurants this year, according to Fortune.
Gallup claims America now ranks 12th on the planet in new businesses. Startups exceeded closures by 100,000 in 2008, and in 2014 closures exceeded startups by 70,000. Cause for urgency.
In 2013, 14.5 million businesses were counted, and in 2014 only 12 million were still operating. One in five on the bone pile: Retirements closed 2.3%, owner deaths and one-time downturns likewise contributed to the decline, but the single most frequently given cause for closure was inadequate sales, according to the Statistic Brain Research Institute.
In higher education, the threat of closing two colleges, Marian Court College and Sweet Briar College, has caused a collective national stir producing a combined total of nearly 3,000,000 Google hits. The student population of these two private liberal arts colleges, in total, is less than 1,000.
Why do two small educational enterprises, where closure is only threatened, cause so much attention when business closures at a rate of 100,000 times the frequency seem to generate little consternation?
Colleges are not a business, that’s why.
University leadership should know that. Urgency on campus should be this and only this: academic excellence is the core product. A college and Ford Motor Company have almost nothing in common save this touchpoint: both must be managed in a businesslike fashion towards a clear goal and high quality. In seats of commerce and learning denial of circumstances overpowers reality.
Colleges and universities require four senses of urgency.
Administrative costs must be a reasonable portion of operating costs. According to Business Insider Sweet Briar College spent $47 million in office expenses in 2012. With 700 students, that totals a staggering $64,000 in administrative costs per student: a mind numbing sense of urgency for efficiency while leader numbness prevails.
Cost of attendance should have a direct relationship to the value of the degrees received. According to Best Value Schools, the cost of education has increased by 538% since 1985. Medical costs have jumped 286% and the Consumer Price Index 121% during the same time. The required urgency is an immediate, permanent, relentless cutting of fat in very part of the body. No-stone-unturned leadership is called for, with cold-blooded disregard for anything other than mission attainment through academic excellence. If grounds keeping costs can be reduced through alternative delivery methods, do it. If operation of a vehicle fleet is economized through privatization, privatize. If janitorial service or food preparation can be made more efficient through bidding and contracting, then bid and contract. The university must be business like, and urgency directed to real quality should be “Job One,” to borrow an old tag from Ford.
The hearts and passions of alumni – a barometer of academic purpose – should be urgently responded to. People like Wal-Mart and McDonald’s, but when either of these organizations closes a few stores, a former presidential press secretary, Robert “Big Mac” Gibbs, is hired as corporate mouthpiece, and nary a tear is shed says the Wall Street Journal. Two small colleges serving less than 1,000 students (1,700 Big Mac’s are sold per minute on the planet) mention shuttering and there is a deafening national outcry. The passion held by people who call a campus Alma Mater (Nourishing mother) is a barometer of academic purpose. Private giving to universities exists because people love them; and if alumni don’t, why would anyone else?
There must be a sense of urgency regarding honesty and academic prowess in university purpose and operation. If trust evaporates, then university reputation falls. Families priced out of university attendance feel “beaten” and lose trust on both sides of the ivy covered walls. When focus and efficiency are required, then leadership should demand focus and efficiency with urgency. Trust departs the campus through the front gate and the back door in a trickle not a torrent.
Universities have a responsibility for transparency, honesty and sincerity with students and families. This is good business. Promise and promise hard: but failure to deliver leads to demise. That’s business. That’s urgency. Ford, Kroc, and Walton all knew this.
Campus ostriches that hold education is not a business demonstrate a fundamental ignorance of business and education, confusing entitlement with empowerment.
Sweet Briar College needs students willing to pay handsomely and faculty willing to work cheaply.
And, it’s urgent.
There is “business” and “business”. MacDonalds deserves to close because it is a junk food provider and responsible for the development of obesity in the Western world. Certain universities could fall into that junk food category with executives who regard students as “customers” and a “meal ticket to the middle class.” However, what is needed is a much fairer system with grants given to students who are really capable of higher education after going through rigorous exams. Far too often a “junk food” business model is proposed in which all degrees are supposedly equal with instructors reduced to adjuncts at a conveyer belt having none of the professional necessities similar to their Wal-Mart and junk food industry counterparts. Universities should be devoted to “excellence” in research and teaching and not reduced to vocational aims. The latter should be the province of community colleges but neither should the vocational qualification be sneered at. Both are important but the bad MacDonalds junk food model of playing the numbers game without any thought of quality and providing perks to huge armies of parasitic administrators is the real threat today.