Consolidating Higher Education: The Community Solution Model This episode of the Changing Higher Ed® podcast features Dr. Michael Horowitz, Chancellor of The Community Solution Education System (formerly TCS Education System), who discusses using innovative models for higher education consolidation as an additional category in or alternative to traditional mergers or acquisitions. Horowitz highlights the system's unique approach, a collaborative model prioritizing resource optimization and expertise sharing among member institutions while maintaining individual identities. The conversation addresses challenges facing higher education, including increasing closure rates and the importance of proactive strategies like mergers, acquisitions, and consolidations. Both McNaughton and Horowitz emphasize the necessity of early planning and shared vision, particularly involving faculty, for successful integration. They also touch on broader trends and challenges in higher education, such as increasing closures and the challenges boards face in adapting to the uniqueness of the business of higher education. They conclude with practical advice for institutions considering consolidation, focusing on partnership development, early financial assessment, and resource amplification to strengthen academic missions. Key Discussion Points The Community Solution Model: A Collaborative System Alternative to Traditional M&A: The Community Solution operates as a "system" where institutions collaborate rather than compete. This approach aims to optimize resources, share expertise, and improve student success. Quote: "The consolidation that operates as a system in which its institutions collaborate instead of competing, gain resources, share expertise, and optimize expenditures in the process." – Michael Horowitz System Integration: The system model integrates non-student facing operations like finance, technology, and marketing. This allows individual institutions to focus on academic endeavors. Quote: "All of that can be scaled. To better quality, for the same dollar... The uniqueness has to drive through the academics."– Michael Horowitz Maintaining Institutional Identity: Each college within the system retains its own accreditation, president, board, leadership, assets, and liabilities. The system consolidates operations, not the institutions themselves. Quote: "…each of our colleges keeps its own accreditation, president, board, leadership, their own assets and liabilities." – Michael Horowitz Trends in Higher Education and the Need for Consolidation Increasing Closures: The concerning trend of college closures, which have a significant negative impact on students and communities. Clayton Christensen's prediction of closures is revisited and said to be possibly understated. Quote: " The closure rate is accelerating. Last year there were 80 closures total, including 16 nonprofits." – Drumm McNaughton Mature and Declining Market: The higher education market is described as mature with overcapacity and declining student populations. The need for a new strategy to remain viable is clear. Boards Waiting Too Long: Many college boards are hesitant to act proactively and address financial or enrollment trends until it is too late. Relying on 'hope' is not an effective strategy. AI Prediction: AI models could accurately predict most college closures based on historical data, showing that many of these closures are foreseeable. The Benefits of a System Approach Resource Amplification: Consolidation of back-end services leads to cost savings that can be reinvested into academic programs. The system aims to "amplify" resources, not just save money. Scalability and Efficiency: Shared resources and centralized functions create economies of scale and improve overall efficiency. Shared Talent and Ideas: The system fosters collaboration and the sharing of best practices among institutions and staff, resulting in shared knowledge. Quote: "...we're amplifying our brain power by coming together." – Michael Horowitz Enhanced Faculty and Student Resources: The system provides faculty with resources like teaching and learning support and global engagement programs. Implementation and Integration Challenges Regulatory Process: Post-merger integration involves navigating a complex regulatory process that requires meticulous planning and execution and can take an extended amount of time. Project Management: Successful integration requires strong project management skills to coordinate the various tasks and stages. “The most valuable person that you have on your post-merger integration team is your project manager." – Dr. Drumm McNaughton. Faculty Buy-In: Obtaining faculty support and ensuring clear communication are crucial for a successful transition. Timeline: The process from initial discussion to full integration can be lengthy and can take up to three years. Consolidation Governance Structure Dual ...
