How merging can help colleges avoid failure in troubled times

An expert reveals 9 key tips to making consolidation work for your institution—before it's too late.

College mergers and related consolidation activity may again pick up steam as higher ed leaders navigate the twin financial upheavals of COVID and a potential recession.

Just last week, it was announced that Bloomfield College, a small private institution in New Jersey, would become a subsidiary of Montclair State University, the large public school nearby. The state of New Jersey contributed $12.5 million to help facilitate the deal. “This partnership could serve as a new national model for how institutions with similar missions can innovate through integration and become partners in ensuring student success instead of competitors,” Montclair State President Jonathan GS Koppell said in a statement.

While public-private mergers may be rare, one higher ed consulting firm is encouraging more administrators to consider the prospect of affiliation or consolidation. With the number of traditional-age students declining, the skepticism around the value of post-secondary degrees rising, and the costs of deferred maintenance mounting, some campus leaders may not be acting quickly enough to assure their institution’s health, says the firm Tyton Partners.

“The denial is so pronounced that there seem to be as many recent examples of institutions waiting too long to merge as there are examples of successful mergers,” the company says. “Too little, too late has become too common in higher education and yet the number of failures continues to grow.”

Here are Tyton’s 9 key steps for administrators evaluating a potential merger:

Making the merger decision

  1. Take a market view: While campus leaders are well versed in their own finances, many lack perspective on whether their programs are gaining or losing market share. Administrators and trustees must have a handle on their relative competitive performance to properly assess long-term institutional health.
  2. Speak plainly: The scope of a college’s financial risks may not become clear unless leaders are open and transparent about the “business of keeping an institution afloat.” Leaders must have unadulterated discussions about markets, market share, consumers, and competition.
  3. Don’t wait until it’s obvious: Mergers are often difficult and painful, but these deals only succeed when an institution remains relatively viable and has something to offer if it’s absorbed by another college or university. 

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Moving forward

    1. Act with conviction: Administrators and trustees must present a united front in support of the merger to instill confidence in potential partners.
    2. Seek expert help: College presidents cannot rely solely on their networks to find a suitable partner for a merger. An outside expert is often more aware of the work that goes into a merger and better positioned to identify, approach and negotiate with a partner.
    3. Market your strengths: Engaging a potential partner is “effectively a sales process designed to find the best long-term match.” Administrators should be able to promote their strengths and show how they will benefit a merger partner.
    4. Search strategically but widely: Market consolidation, program extension, degree extension, geographic expansion, entry into non-credit offerings, or augmenting specific capabilities or technologies are among the many factors administrators must focus on when seeking a partner in a merger.

    Choosing a Partner

    1. Let go of preconceptions: Don’t assume you thoroughly understand an institution based on its size or status. For instance, some large, bureaucratic, state universities can be remarkably nimble while traditionally conservative schools may be acting on new, expansive mandates from their boards.
    2. Understand your priorities: When entering a merger, leaders should prioritize their list of mission-oriented and economic goals, such as academic autonomy, staff and faculty employment and the preservation of an endowment, or a myriad of other factors. Understanding which issues are paramount and which are secondary is critical to a successful outcome.

Mergers between established institutions are, of course, more complex than a list of important steps. “Institutions contending with the potentially existential issues can utilize this list to provoke a conversation that can better structure the merger process,” Tyton says. “This can make all the difference in preserving the mission and impact of the institution.” [soliloquy id=”900″]

Matt Zalaznick
Matt Zalaznick
Matt Zalaznick is a life-long journalist. Prior to writing for District Administration he worked in daily news all over the country, from the NYC suburbs to the Rocky Mountains, Silicon Valley and the U.S. Virgin Islands. He's also in a band.

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