Quick decisions have long-lasting impact. Short-term savings may devastate the institution in the future. Less obvious sacrifices may yield long term security. Resilient organizations will implement a multidimensional assessment process that will support agile decision-making capabilities. The institutions that employ strategy grounded in fiscal reality will navigate this crisis and emerge poised for longer-term success.

Creativity is required

Traditional responses are no longer sufficient; the multifaceted challenges facing higher education require innovation. Most schools cannot afford to nibble around the edges of the habitual budget. They cannot afford to tweak, so they must have the capacity to think creatively and take a new viewpoint of programs, staffing and services. Faculty and staff encouraged to participate and think creatively will be free to develop innovative solutions to unprecedented challenges. Institutions that are positioned for success when the harsh climate recedes will have considered and implemented new assessment methods, organizational models, and mission delivery options. The successful institution will emerge with diversified sources of revenue, staffing and capital.

Communicate throughout the institutional community and beyond

Colleges and universities must educate beyond their classrooms, to inform alumni, donors, the local community, legislators, granting agencies and financial institutions about the industry's cost structure, reach and return on investment. In the vein of small business loans, mortgages and venture capital, higher education is the backbone of the country's intellectual and skilled economy. Investment in colleges and universities are investments in human capital, innovation and the future. Higher education must communicate its contribution and potential along with its current challenges to advocate for strategic investments in the industry.

Leaders step up

Larry Bird wanted the ball when the Celts were down by one point in the last minute of the fourth quarter. Barack Obama feels now is the time to be President because he can make an impact. Challenges inspire talented people to step forward with their best. The best fundraisers, researchers, admissions, student service and financial aid, investment and finance professionals will emerge from this crisis to respond and develop solutions for their institutions and their many stakeholders.

Leaders of effective institutions will encourage thoughtful and thorough responses, reject knee-jerk reactions to short-term problems and continue to make sound investments in the future. The agile organization will move swiftly to respond to this crisis, but will not implement panic driven decisions. Colleges and universities are resilient, enduring enterprises that offer solutions for the broader economy. They have the opportunity to establish equilibrium in the eye of this storm by responding to these turbulent times with intention and a long- term perspective.

  This fall Howard Teibel and I have collaborated to design a new one-day training program about college and university budgeting and finance. We launched the program at the Boston Consortium for Higher Education in October. We learned a great deal from the participants and were rewarded with many "ah-ha's!" as we translated the language and tools of higher education finance to department administrators.

Please click below to read a course description.

Finance Matters »

  In a recent New York Times opinion piece Catherine Rampell wrote "history offers some reason for optimism. Industries like bicycle manufacturers, when faced with a threat of obsolescence, managed to creatively reinvent themselves. What lessons do they provide for today's struggling industries?"

Follow the link below to read her entire article on surviving change and fostering innovation.

"How Industries Survive Change. If They Do." »