Edu-coops as an antidote to higher ed fragility
Harnessing the power of edu-coop sharing to solve an existential problem
2024:3
In a recent article in Higher Ed Dive, Richard Azziz asked, “Why is the higher education sector so fragile in the US?” The article revealed substantial fragility not only in the U.S. but also in the European higher education sector.
The closure and merger of smaller institutions under 1000 students appears to be accelerating. Even larger, state-funded institutions are slashing programs in the face of declining enrollment. The causes vary but are often related to offering in-person programs in remote and sparsely-populated geographies, demographic shifts to smaller age cohorts—the so-called “Demographic Cliff,” misplaced facility investments, and a growing preference for shorter, less expensive micro-credentials.
The common path taken in many of these situations resembles that of the corporate world. Solutions typically include closing institutions, merging with another institution, or slashing programs and staff. We should ask, however, if there might be a better way to create a shared model through edu-coops.
Where can we share?
An edu-coop solution may offer a way forward for many institutions. Based on experience typical of mergers, restructurings, and acquisitions, several promising alternatives emerge.
Strategic sharing of capabilities through an edu-coop may be a solution
The diagram below shows a useful framework, which is a mix of elements, including assets, people, processes, technologies, and new markets. The framework can be used to think about sharing options based on the type of opportunity and the ability to generate synergies.
Assets An all-too-common default by higher education institutions in trouble is to look for a way out of failed asset decisions. That wonderful sports facility, performing arts auditorium, or lazy river recreation center of past capital campaigns can suddenly seem like a millstone around the neck of an institution. The decisions in these areas can be hard and may often represent the abandonment of what was seen as a prized possession only a few years ago. These decisions can essentially be about how to deal with brownfield assets.
People, process, technology. These three areas should be examined holistically rather than in isolation. Some issues to avoid include the following.
Institutions trying to solve an enrollment shortfall by paring back on faculty and staff may find that they have entered a downward spiral of declining capability and customer satisfaction.
Many institutions have leaned into process consolidation through outsourcing or shared services only to find that the process took too long and delivered too little.
Chasing shiny objects of technology, often hoping that online courses will save the day, disappoints more often than not.
The three areas must work in harmony. Yet, achieving this harmony can be evasive to smaller institutions operating alone, and that is where innovative edu-coop sharing can work.
New markets. The embrace of an edu-coop to address significant issues can and should include a focus on new markets and new ways to offer education.
Can this work?
The model of small credit unions using supporting shared organizations called credit union service organizations (CUSOs") provides a model. CUSOs are not per se cooperatives but are owned by credit unions.
According to data from the NCUA, there were over 1,000 CUSOs in 2021, offering a range of services, including Investments, IT, lending, member service operations, and payments. Customer credit unions own CUSOs, ensuring that services are needed and appropriate. The availability of CUSO services ensures that even smaller credit unions have access to advanced technology and services.
The edu-coop could be set up to follow many elements of the CUSO model. That could lead us to ask why not use a similar model in higher education.
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Past posts that you may want to read
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Anecdote or antidote?