Enhance the planning rigor of program launches

Seeking to grow enrollment, many colleges and universities are picking up the pace of new academic program launches. Unfortunately, new market pressures are making launches riskier than ever. On the one hand, prospective students are changing in both makeup and behavior. Growth in high school graduates has slowed, requiring institutions to reach new markets (e.g., underrepresented populations and adult learners) to achieve growth goals. Overall, prospective students are more cost-conscious, demanding that institutions take a more “ROI-centric” approach to marketing and recruiting.

At the same time, competition is fierce. Undergraduates are evaluating a wider set of institutions, and the supply of graduate programs now outpaces demand. To make matters worse, competition from nontraditional players is rising. For-profit bootcamps like General Assembly and next-generation MOOCs like Udacity are rapidly growing enrollments in short-form credential programs. And corporations are gravitating to these nontraditional providers to address their learning and development needs, further shrinking the pipeline for traditional professional programs.

Why campuses experience “profitless growth”

These new market pressures have created a hostile environment for new program launches. Many promising new programs fail to generate desired enrollments or cost more than initially expected. As a result, campuses experience “profitless growth”—adding faculty, instructional resources, and perhaps some new students, but not growing the bottom line. This problem is not limited to revenue-generating programs. Mission- and community-focused programs that were never meant to break-even also miss their targets.

Lessons Learned

Different growth strategies, similar failure paths

Avoiding profitless growth requires understanding why new programs fail. Of course, institutions launch different types of programs in pursuit of different growth strategies—face-to-face versus online, undergraduate versus graduate, programs in existing disciplinary strengths versus new fields. But regardless of type of program, the same four pitfalls account for nearly all failures. First, program launch processes work against growth goals, delaying progress on good ideas or discouraging faculty from proposing them. Second, leaders evaluate the wrong market demand data, skewing projections for enrollments. Third, leaders underestimate or overlook the costs of new programs, inflating expected margins or causing a scramble when resource needs are identified late in planning. Finally, leaders do not sufficiently monitor program performance after launch, failing to turn around underperforming programs or react to fast-changing markets.

In particular, 10 specific mistakes most often lead programs down these common failure paths. Positioning programs for market success requires avoiding these mistakes.

Mistakes

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