Wednesday, January 4, 2012

Ten theses on improving quality, reducing cost, and increasing revenue

The challenge facing small private colleges like Westminster is to improve the quality of learning while maintaining or lowering costs to students and increasing revenue to the college.  To date some colleges have been successful with one of these goals, but often at the cost of the others.  There are many reasons for this failure, but two stand out.  

The first is the assumption that quality is measured almost entirely by inputs--the academic preparation of incoming students, the variety of services offered to students, the amenities provided on campus, the pay of faculty, the reputation of the institution, etc.  Many campuses pursue improved inputs as part of a strategy to heighten the prestige of a campus and thereby drive students to it.  But all of these quality measures add expenses to campus, which are either absorbed in the budget or passed on to some students through higher prices.  

The second is that campuses rarely coordinate the activities that bear on these questions. By this I mean that decisions about tuition and aid are set in one way, decisions about the curriculum, policy, and student services are set another way, and decisions about expenditures in a third. The separation of decision making means that choices, such as those on enrollment, which influence the ability of the campus to provide a quality education, are made apart from those decisions on curriculum, policy, and expenditures which make it possible to assemble a class.

So the question is whether a campus can work simultaneously on cost, quality, and revenue; and if so, under which conditions this sort of work is possible.  I believe the three can be linked.  Here are ten characteristics, which if they existed on a campus, would make simultaneous work on cost, quality, and revenue possible:
  1. The most important quality measures are outcomes measured by learning--of students, staff, faculty, and other campus constituencies--and by student perceptions of value.  Those value perceptions are almost always a function of how much a student paid to attend in relationship to how much the student learned.
  2. The most important cost measure, then, is not price (particularly not sticker price) but instead the cumulative amount that a student and his/her family pay for education. Communication with students before, during, and at the end of their educations should emphasize this point.  And influencing this measure should be the key focus for campus stakeholders working on cost issues. 
  3. The most important quality measure is time to graduation, since it sits at the intersection of cost,quality, and revenue.  In theory, excellent quality education and strong student learning should reduce the cost to students because they are more likely to graduate on time having learned enough to succeed in a future that they desire.  And excellent quality and improved graduation rates increase revenue by heightening demand and expanding the capacity of the institution to handle that demand.
  4. There are curriculum policies  that cumulatively improve quality, reduce cost, and heighten revenue.  Among them are smoothing transfer enrollment, regularly updating the content of the core curriculum (rather than creating new courses to respond to changes in the field), reducing the number of electives, increasing the number of core credits in a major, increasing opportunities for special topics courses and internships. 
  5. Curriculum reform should focus on implementing these changes across campus, so that the shape of majors (number of credit hours, proportion of coursework and independent work, capstone experiences, internships) is as similar as possible across the institution. Otherwise, while students in some fields will move more effectively through their educations, others will not.  And without similarity across campus, it is impossible to reward faculty fairly for their investments in this process.
  6. Greater similarity in the shape of the curriculum leads to greater efficiency.  But it also improves quality by increasing the consistency of faculty interactions with students and preparing students to learn successfully in the college’s particular learning environment.
  7. Improving quality, reducing cost, and increasing revenue can be accomplished while maintaining many sorts of diversity.  But it is unlikely to be successful at institutions that enroll students from a very wide range of economic backgrounds and levels of academic preparation. Diversity in academic background creates a wildly fragmented curriculum where highly skilled students (via honors and other special academic programs), and less skilled students (via remedial and introductory level courses) have special pathways to graduation which lessen the efficiency of the curriculum and the effectiveness of common approaches to learning.  And wide diversity in economic background means that certain students subsidize the tuition of others, thus lessening the likelihood that all students will perceive the quality of their education similarly. As with the curriculum, then, financial aid should trend towards similarity across campus, with the range of financial aid awards narrowing.
  8. Recruiting should shift towards enrolling students who will be successful with the college’s particular approach to learning, rather than recruiting a wide range of students of whom only a portion is likely to be successful.  Note that this does not assume that a college must only recruit academically strong students or only wealthy students (both of which are hallmarks of an input-focused approach to institutional success).  Instead, it imagines that schools can position their missions, curricula, and financial aid to align with a demographic that is most likely to be successful in that setting.
  9. Campuses must distinguish themselves as a whole from their competitors (so that, say, Westminster as a whole becomes more and more different from its competitors) by creating greater similarity within the campus (so that, say, there is greater uniformity of experience regardless of a student’s major). Doing so allows the development of campus-wide expertise in a particular sector of higher education instead of developing pockets of expertise in many sectors of higher education.
  10. The effort to improve quality, reduce cost, and increase revenue requires a coordinated approach that spreads over several years.  Often, institutions seeking to make headway on these issues start with rewriting their missions.  But the approach above  favors making headway on key infrastructural matters--curriculum shape, financial aid and recruitment philosophy, common approaches to teaching and learning, time to graduation--as a precursor for creating a mission that has support from stakeholders and systems.

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