higher-ed mergers

7 critical elements for higher-ed mergers

Though higher-ed mergers are a serious business, they can yield positive results.

As financial support for public institutions declines and as the need for efficiency increases, institutions might want to consider higher-ed mergers as part of their long-term strategic plans.

The consideration comes from new research released by the TIAA Institute, and it examines the operational decision-making and implementation details that help make higher-ed mergers successful.

While institutions should consider mergers, the desire to save money or become a larger institution should not be motivating factors in a merger.

Recent trends indicate many institutions will continue to face financial pressure, and enrollment trends are part of the reason for this financial reality, according to the report.

Next page: The most-needed elements to make your higher-ed merger a success

“This report gives higher education leaders valuable insights to inform decisions about whether and how to pursue a merger,” said Stephanie Bell-Rose, head of the TIAA Institute. “It’s also unique in that the report seeks to change the way that mergers are thought about and approached – not as an option of last resort, but one to proactively evaluate.”

Higher-ed mergers do provide the opportunity for a number of gains, according to the report, including financial savings, the leveraging of a greater size and scale, and the re-energizing and re-engaging of the institution’s stakeholders. But they also come with costs, notably, branding, opportunity costs, and expenditure of political capital. Higher-ed mergers have discordance in timing between costs, which are immediate, and gains, which are delayed.

Seven critical elements for higher-ed merger success include:
1. A compelling unifying vision
2. A committed and understanding governing body
3. the right leadership
4. An appropriate sense of urgency
5. A strong project management system
6. A robust and redundant communication plan
7. Sufficient dedicated resources

Though the decision to merge isn’t one to be made lightly, many institutions complete the process with favorable results.

“The decision to consolidate or merge institutions is never easy and at times may be costly; however, it is a critical tactic that many higher education leaders should consider when thinking about their school’s future,” said co-author of the report, Dr. Ricardo Azziz, State University of New York (SUNY). “Today’s mature higher education institutions serve as proof of the positive effects of mergers with the majority of them having gone through this process in their histories.”

Success looks different to different institutions. Because reduced administrative overhead or reduced costs are not enough to define success, institutions have to determine how they do define it.

“Will success be measured in total enrollment, degree of student success, student access, diversity on campus, research funding or productivity, quality of the programming, and/or national brand recognition and rankings? In addition, mergers do not affect all people equally. Faculty and staff who forego employment post-merger have a different perception of the event than do those faculty and staff who, post-merger, join a new, bigger, more robust department. ‘Success’ looks different to different stakeholders,” according to the report.

Metrics for determining success or failure should be determined in advance, the authors advise, along with a measurement system, with the understanding that the set of metrics will generally expand with time.

Laura Ascione