There was a time when colleges and universities handled almost all the functions necessary to enroll, educate, and graduate students. As financial and political pressures mount, more colleges want to focus on the academic core — teaching and research — and transfer much of the rest of their operations to specialized businesses. The result is a complex relationship between colleges and companies, and it’s quickly growing more common — the public-private partnership, or P3.
The Chronicle recently released a special report, “The Outsourced University: How Public-Private Partnerships Can Benefit Your Campus,” that provides an all-in-one primer on P3s. The following is excerpted from that report — read more by purchasing a copy here.
As colleges and universities in the United States adapt to new financial and competitive challenges, partnerships with the private sector are playing an expanding role. A recent survey of presidents, provosts, and chief financial officers by The Chronicle and P3•EDU found that 83 percent of respondents said partnerships between their institutions and private companies had increased (with virtually none of the respondents citing a decrease in such relationships).
Public-private partnerships, or P3s, are growing not only in number but also in type. Traditional P3s for student housing and building development continue, as do new ways to raise capital through the sale of long-term branding agreements and service rights around parking and energy. In addition to these traditional administrative partnerships, a whole new group of academic P3s is now in place to grow online programs, recruit international students, and improve student success. The same survey of public-private partnerships found, for example, that partnerships for expanding online programs were second only to partnerships for development of campus infrastructure as areas of the most interest on today’s college campuses.
That expanded range of partnerships comes with new opportunities, but also poses new challenges and risks. While the upside of the partnerships may be great — unique capabilities, new capital, speed to market — considerable financial and reputational stakes are at play.
Leaders of public- private partnerships should not already be busy with other jobs.
Most colleges do not have the dedicated resources to consider these transactions properly. More often than not, the exploration and execution of public-private partnerships are led by college leaders who already have full-time jobs at their institution. The partnerships can be led by treasurers, budget directors, housing directors, athletics directors, and equally by deans, associate provosts, online directors, and vice presidents for external affairs. And, not surprising, the skill sets of those leading these partnership efforts vary widely.
In the corporate world, where mergers, acquisitions, and strategic partnerships are the norm, these efforts are typically consolidated into one dedicated strategic office. Most often referred to as the office of corporate development, it is usually led by an executive vice president or senior vice president for corporate development. Teams in those roles typically have comprehensive transactional experience and oversee a range of services related to partnerships and acquisitions, including strategic procurement, financial and operational due diligence, contract review and negotiation, and project implementation.
Higher education today needs a similar office. Though the name should probably change — we might call it the office of strategic initiatives — the function of the office and the required skill sets of the person leading it would largely be the same. The executive vice president for strategic initiatives would have not only the basic competencies to protect and advance the colleges, but also the strong ability to work across the institution. The role would need to be strategic in nature, and not siloed in one specific area. We suggest structuring it as a central resource for the institution, with a direct reporting line to the president.
The concept of adding a new senior-level office may sound far-fetched, but colleges and universities have had to do it before. Consider technology over the past 10 years. As it became more pervasive on campuses, the role of managing it expanded considerably, from small projects to a strategic imperative. Today there is probably not a college campus in the country without a chief information officer whose office serves as a critical central resource across the institution.
As colleges focus on their core competencies and engage in partnerships to help advance their institutional missions, they would be well served by someone with the expertise and focus to execute on those initiatives. It is time to recognize that a dedicated role may be required.
Michelle Marks is vice president for academic innovation and new ventures at George Mason University, and James Sparkman is a partner at Alpha Education, a consulting company.