Point of View:
Across the country, many community college presidents find themselves increasingly focused on financial issues, trying to balance a stressed budget against the rising cost of operation.
Like most postsecondary institutions, community colleges are accountable to federal, state and accrediting agencies. Additionally, local political and business leaders are demanding that their publicly-funded training and education providers take on greater responsibility for creating economic value in the communities they serve. The effects of globalization have rippled through the economy, presenting new demands and opportunities. As a result, community colleges have been pressured to rethink, restructure and retool – no easy task.
Many states continue to fund community colleges using byzantine funding formulae that essentially measure attendance rather than accomplishment. It is therefore not surprising that college officials often prioritize recruitment of new students before retention and customer satisfaction. Too many college leaders mistake seat-time funding as being revenue – it is more like subsidy.
At the same time, many continuing education leaders must deal with state funding formulae for non-credit workforce development that is either non-existent or so convoluted that they are difficult to understand, much less address effectively. Reflecting the predominant concerns for enrollment and retention at most colleges, traditional benchmarks for success in workforce development have focused on measuring productivity by the number of companies served and by net revenue generated for the college. Yet, even these metrics, with their focus on quantity over quality, can hamper efforts to develop and deliver programs that provide real value to area employers and employees in an efficient, cost effective way.
To do so, college presidents and their workforce development professionals must take a longer view, beyond budgets and costs, beyond expenditure and revenue, to a more sustainable vision: a commitment to profitability. Yet, as historically academic institutions, community colleges traditionally do not have a bottom-line focus, much less a culture geared toward managing for true bottom-line results.
A profound cultural shift is on the horizon, challenging old assumptions, traditional operating models and long-standing relationships. Not surprisingly, community colleges are struggling with these implications as they attempt to embrace the complexities of their evolving mission. College units focusing on workforce development, continuing education and customized training operate in an environment of shifting priorities, internal competition and increasing expectations. It is essential that college presidents recognize the potential new revenue that working with local business and industry can offer, thus allowing them to manage for sustainability. It is a pivotal time for America’s community colleges, a time either to suffer an identity crisis or undergo an empowering transformation.
How does a community college meet the expanding needs of its local workforce through training and continuing education initiatives when funding formulae are designed to reward seat time and academic credit?
The answer is inescapable – the college must find a new way to fund itself. The best way to ensure fiscal health is to move beyond the cost recovery mindset and actively plan for profit. Profitability offers community colleges a way to manage programs for sustainability and to measure success.
Before colleges can capitalize on the potential of their revenue-producing units, they must come to recognize and understand the constraints under which they operate. One significant problem: the terminology used to describe potentially profitable units varies from college to college. One dean’s understanding of the term “continuing education” may differ from another dean’s at a neighboring institution. One college may include senior citizen classes, college-for-kids and community services as continuing education and another may limit the definition to programs for returning college graduates seeking new skills and competencies.
The term “workforce development” may be seen as the province of vocational education deans rather than non-credit, customized training programs. Amidst this confusion, the lines between credit and non-credit instruction continue to blur on campus. All campus stakeholders must have a clear understanding of terminology, responsibilities and turf before a serious commitment to developing new revenue streams can begin.
While some educators are skeptical about applying business practices to academia, progressive colleges view being profitable as a way to support the academic mission. Customized and contract training revenue becomes vitally important as a needed supplement to the annual college budget. Serving the business community and generating profits need not be incompatible with the larger mission of a community college. Many of the benchmarks currently used to measure community college success can be achieved while at the same time providing real value to business and industry, including market penetration, attention to special populations and minority participation. Forward-thinking continuing education leaders are making the case that community colleges can fulfill their educational mission without sacrificing fiscal health. They may, in fact, support their mission by virtue of running profitable operations.
The most important factor in providing economic value to the community is viewing employers - not students - as the college’s true customers. A college can build capacity and better serve its learners if it provides them with viable programs tailored to the needs of local business and industry. Only then will it help create real value for area employers as well as jobs for its students.
However, within the culture of most community colleges, the needs of area employers are not the highest priority. To truly serve their communities, colleges need to do a better job of analyzing current trends in the regional and global economy, and accurately assessing local business and industry needs driven by those trends. The essential key to successful continuing education programs is having the full support of the president, combined with the ability to make decisions outside the normal procedures of the academic side of the college.
In no uncertain terms, America’s colleges and universities have been given a mandate to take more responsibility for the economic development of their communities. With decades of experience training and retraining local workers and executives, the nation’s community colleges are arguably better positioned than most four-year institutions to bring significant and lasting economic value to the places they call home.
Shaping that future will require a great deal of individual and institutional courage to confront the risk-averse culture of higher education. While profitability may seem an unrealistic goal to some at this juncture, it is the only way to ensure that the future will be a strong one.
On the other side of the challenges, opportunity awaits.
Innovation and leadership are the catalysts needed to begin an empowering transformation. Hopefully in the future, community college leaders will not see a conflict between honoring the mission of their institutions and managing them for a sustainable, profitable future.
It is the promise of a future in which “profit” is not a dirty word.