Adopting Academic Economics to Balance Educating Effectively and Operating Efficiently.
This content was previously published by Campus Labs, now part of Anthology. Product and/or solution names may have changed.
In higher education, we are diligently working to address multiple challenges at any given moment. Of all the challenges, one of the most critical is the constant pursuit and fulfillment of the “Five Principles of Academic Leadership” – institutional mission, service, demand, quality and financial stewardship. Each principle is important in and of itself, but the fluidity in which they connect and impact each other is significant.
Traditionally, much of the emphasis within the five principles has been on institutional mission, service and quality—the educational aspects of an institution. However, the emphasis on the educational components has created an impression of being in direct competition with operational components. But this is a misconception. When you apply the logic and data of operational principles to the educational principles of the institution you create a stronger, more robust academic environment that positions an institution for future success.
Furthering the understanding of financial stewardship and demand data and how it can be operationalized to support the whole campus is an opportunity to offer more value and assessment over the institutional product, delivery and consumption of education. Especially as pressure has been mounting regarding the value of education, costs associated with educating a student, student debt concerns, consolidation, closures, and more.
So, how does an institution and leadership balance the approach to these principles both on an individual basis, as well as holistically?
This is where Campus Labs’ intelligence tool “Academic Economics” comes into play. Academic Economics provides a deeper understanding of what it takes to operate programs and educate students while also empowering a more informed conversation to take place on campus. It supplies the framework to address the challenge around truly understanding your operations—confirming or dispelling some of the anecdotal information or myths about program operations, loss-leaders and other institutional legends. Through this approach and solution, we gain a better understanding of how revenue and expense data should help to inform, guide and empower a more data-enriched discussion on campus.
This need for understanding the economics side of the equation is especially true as campuses are looking at performance-based metrics, program prioritization reviews, strategic enrollment management and the reallocation of resources. Without this understanding of the data connected to revenues and expenses, leadership is flying blind in institutional governance. How do we set tuition prices, formulate discounting strategies to support new budget models, or support the reallocation of resources?
In addition to internal demands for this economic information, accrediting bodies, rating agencies and governing boards are also asking questions about this financial information and how to tie this information to quality and demand. This data is necessary to accurately and effectively answer their questions that will impact the whole institution. This key data is already being collected on campus, with Academic Economics we can connect the data points, giving institutions a new lens in which to view their data holistically.
In just about all other industries detailed economic information is well understood, readily available and incorporated into regular operations and the decision-making process. If higher education institutions are expected to succeed in supporting the Five Principles of Academic Leadership, integrating this information further into the strategic dialogue and planning is critical to the overall success and longevity of an institution.
Michael Leardi, Ed.D.
Michael Leardi has 30 years of higher education financial experience including more than 10 years at Drexel University and 13 years as president of a consulting group. He is an expert in academic costing and financial reporting and is the creator of Academic Economics, a tool used by institutions to increase transparency, efficiency, analytics and the optimization of resources. Leardi received a bachelor’s in accounting from Villanova, a master’s in business administration with a concentration in economics from Widener University and a doctorate in higher education administration from Widener University.