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Higher education is in the midst of great change and transformation, and SPH Consulting Group is here to guide you. Not unexpectedly, major future-oriented institutional restructuring, including mergers, acquisitions, consolidations, corporate conversions, and closures, are increasingly common. An environment that is characterized not only by significant challenges, but also by even greater opportunities. Important and complex institutional transformations that require careful consideration of many potential partner opportunities, a defined pace and process, and expert support.
SPH Consulting Group is ready to serve as the partner of choice, advising, guiding, and assisting college and university governing boards and executives as they consider major future-oriented institutional restructuring strategies. SPH Consulting Group is a team of experienced higher education experts who have actively and directly managed to success the many major restructuring events institutions of higher education face and consider in today’s climate. We provide a variety of services that will help ensure full and complete consideration of the strategic options for major institutional transformation available to higher education leaders and, when it is the right decision, the successful execution and implementation of the chosen strategy.
Gary D Stocker (00:01.538)
Welcome to the multi podcast discussion of the new higher education book, Leading Existential Change in Higher Ed, Mergers, Closures and Other Major Institutional Restructuring. Hi everybody, Gary Stocker from Founder of College Viability. Hi everybody, Gary Stocker, Founder of College Viability. Sitting in front of the blue yeti microphone today and author and physician and former college president, Dr. Ricardo Aziz, author of the book.
And I have created and are creating a series of seven podcasts we will use to review the book, but more importantly, dig into the topics in that book and that important book in greater depth. If you have questions about today's podcast or future podcasts, drop me a note. Send it to Gary, Gary at College Viability. That's one word. Gary at college viability.com. Today, Dr. Aziz, we're focusing on two competencies, building change oriented teams is competency number five.
and leading from the front and engaging directly is competency number six. And as always, thanks for making time to join.
Ricardo Azziz (01:07.544)
Thank you for inviting me and as I always indicate, I may be the lead author but there's a lot of other good contributors to the book. We're excited about its release.
Gary D Stocker (01:19.776)
And one of the interesting approaches, and we've talked about this before, Dr. Aziz, is the use of case studies in most, not all, of the chapters. And the case study for competency five, building change-oriented teams, is associated with University of Colorado Denver and the Anschutz Health Sciences merger. And then effectively they unmerged as the Board of Regents in Colorado ended up naming separate chancellors for both.
campuses. Dr. Aziz, that an indication of how challenging public college mergers can be?
Ricardo Azziz (01:56.686)
The short answer is yes. I think we chose that case study because we've known many of the players in the merger, but it's always important to understand that it's fine to put up successes and mergers, but you also have to understand what things may be challenging. Now the merger of the University of Colorado Denver and the Anschwitz
Academic Health Center was something that had been planned by a prior chancellor of the system in Colorado. And you know the idea was to bring these two institutions together to create a unified R1 institution, not just a standalone Academic Health Center and a standalone four-year university.
and then to create sort of a bigger, better university system or university if you would for Denver per se and for the system. And the idea was good. You know, like all good ideas, sometimes if things take too long then you start having somewhat of an issue. And there are political issues there, you know. In many ways the University of at in oops.
Gary D Stocker (03:13.87)
Sure.
Ricardo Azziz (03:23.031)
have to edit this one out. Where is the University of Boulder? Sorry. Okay.
In this one there was a number of political considerations. University of Colorado at Boulder really thought that they should be the ones to merge with Entwit's and create sort of this mega kind of thing. That was part of the difficulty, University of Colorado Denver faculty were not really that happy and neither were the Entwit's Medical Center.
faculty themselves. They thought that they were a different rung, if you would, of faculty. And so there was a lot of challenges, but you know these are challenges that happen in mergers. In many ways the merger of these two institutions unraveled due to political considerations, but also to be fair it became increasingly more difficult to actually keep them together. Now I will tell you
that they remain merged on the books, okay, so that in fact they have one single OPID, are actually accredited by the regional creditor as one institution, and many of their financial and operational functions remain intertwined and shared. So while governance, right, they have
Gary D Stocker (04:28.664)
Right.
Ricardo Azziz (04:51.682)
different chancellors, governance, faculty leadership, these kind of things are separate, many of the operational things have remained combined. And so I think it's important to remember that while this, what we may say, this is an unwinding of the merger, the truth is that it's only a partial unwinding of the merger. mean, it really is more about governance unwinding than actually operational unwinding.
Gary D Stocker (05:18.51)
And of course, the competency is building a change-oriented team. And not only, Dr. Zs, have you written the books, plural, on mergers in higher education. You've done this. Talk about how you put together your team as you merged the two colleges in Georgia a few years ago.
Ricardo Azziz (05:38.467)
Well, know, to be fair, I could answer the question with great wisdom as I sit today here, 12 years, or actually, you know, more like 13 years later, and having studied this subject extensively in addition to living through it. But the reality is that I was not as wise 13 years ago, and so this is something that I've learned over time.
You know, we all talk about how having the team, the right team, is actually the most important thing that a president can do. But it really, there are a lot of circumstances to that. For example, I was an outside president coming in from California in this particular case. I was actually the second outside, and second and the last so far, outside president in 185 year history of the school, right? And so...
And by the way, the prior outside president was the Surgeon General of United States and he lasted 21 months. So, you know, we're pretty proud of that. But the point really is that I came to a place that I didn't really know any players, right? And so I could have brought a whole bunch of people from different places, but even then that would have been very disruptive. So I had to, in many ways, engage with the individuals that I had at the time there, right? And so...
To be fair, I've learned painfully that not all individuals in your team, even though they may express positive noises, actually are bought into a merger, right? I mean, and to be fair, this is a major disruption in the way things operate. so, like I said, in retrospect, I'm much wiser and older today than I was then. So...
So the reality is that we built the team in Georgia really later. I I was able to, after a couple of years, realize that, I definitely need to have the right people with the right thought. And we started bringing in some individuals there. Although, to be fair, there were a lot of individuals in Georgia that were very supportive and helped a tremendous amount. In fact, I always speak about trying to leverage the interim.
Ricardo Azziz (07:58.688)
individuals, right? And to do a search for interim individuals that is as rigorous as the search for external candidates. Because all of a sudden you start identifying candidates and potential individuals that you never thought about, etc. So you have to actually run it very, very carefully. So I think that what
we've learned today is you have to be very rigorous about building your team. You have to make sure that your team is comfortable with the vision that is being set and is comfortable with the actions, many of them very challenging, that have to be done. Now, you also want a team that is willing to speak up when something is wrong and is willing to challenge you and others, and obviously everybody respectfully.
to do that because you don't want to also have a band of psychophants that simply say yes, yes, yes, and then you drive merrily on your way over the cliff, right? So the reality is you want that kind of leadership. Now, one of the things that I think is important to realize here is that during the merger, during the major restructuring, the authority of executives is much higher than it is normally. I you're driving a bus.
Perhaps you and just a few people know the vision. And so your team has to have faith that you know what you're doing and you know where you're going in that regard. anyway, team building in these settings is certainly different than it is in normal circumstances. And that's why we ended up having, you know, talking about that competency as important.
Gary D Stocker (09:42.848)
Yeah. And I think we talked about this in the first podcast in the series that we did. And I want to talk about again the legitimate use of power and authority. And on page 143 in the book, I'm going to read from that chapter, from that section, we emphasize throughout this book, and that book is Leading Existential Change in Higher Ed, we emphasize throughout this book that the legitimate use of power and authority
will be necessary for a big scary change, BSC leader, and a BSC project to be successful. You go on to say loyalty is the inverse of authority, at least regarding the management of a team. Expand on that, please.
Ricardo Azziz (10:29.377)
Yeah, I think that concept is a very powerful concept, but it's also one that could be easily misinterpreted. In many ways, you have to exert less authority if your team tends to be more loyal, more trusting. Individuals have to actually exert more authority if they don't feel that their team is trusting or works the way they would expect it to do that. So that's what we talk about.
that authority is the inverse of loyalty, right? If you have a loyal team, you don't really need to exert a lot of trust, I mean, a lot of authority in that regard. So, but what happens in a merger is that the authority of the executive and the authority of the board is now enhanced. Enhanced because this is not a process that requires an enormous amount of consultation back and forth, even though you'd like that. In the end, somebody has to make the decision
Are we going to pursue this merger, this acquisition, this closure, whatever it is that the restructuring calls for or not? And that call is actually coming from the board and the board tells the executive what they need to do. So the level of authority given to executives during this period of time is much higher than what we would expect normally. Having said that,
that also means that the level of loyalty and trust that your team has to have in you also should be higher even though normally it's the inverse, right? The more authority you have the less need for trust, although in this case you need high level authority, but your team has to have a high level of trust.
Gary D Stocker (12:14.104)
And you also note Ricardo in that same area of the book that big scary change members of the merger team, the acquisition change, the change team must genuinely believe in the proposed initiative. How do you see that playing out in most mergers?
Ricardo Azziz (12:31.373)
Well, I mean, think that it's true. Your close team needs to really believe that they are pursuing this, even though some of them may be working themselves out of that particular job, right? I mean, so they truly have to be understand that this is the best for the students, right? And the best for the institution long term. Again, know, most teams, people sometimes talk about having teams of 15 and 20 people. That is not a team. I mean, that is...
it's almost impossible to have direct, more than say six or seven direct reports and I would even recommend perhaps less because you need to be very intimate and you need to be in constant communication with these individuals, Getting their feedback, their thoughts, presenting yours, these kind of stuff, having, discussing, you know, challenges that are arising and so on. So, the reality is that you want to have a team that believes in the vision.
You need to believe in the vision, right? The board needs to believe in the vision. If you start having waffling around this, as for example, in the University of Colorado Denver and the Anschutz Medical Center merger, you know, there was a lot of waffling among, you know, leaders and so on and so forth. And as I said, lots of reasons for that. And that actually ends up leading to
a suboptimal result.
Gary D Stocker (14:01.39)
move on then to the sixth competency of the seven in the book. And that sixth competency is leading from the front and engaging directly. And the case study you use is from Newberry College back in 2014, I believe. And you reference the president who joined Newberry in 2014. And then you apply many, not all, of these competencies to President Joseph Cicillo.
from Newberry College. I just want to talk about these and I'll do these individually because you tie what Mr. Cillo, Dr. Cillo did. Is it Dr. Cillo?
Ricardo Azziz (14:38.829)
Yes,
Gary D Stocker (14:40.609)
it.
Gary D Stocker (14:48.91)
I'm going to apply some of those six competencies. And you mentioned that Dr. Chillo had a finance background and analytical skills that allowed him to navigate complex decisions. How important is that financial background?
Ricardo Azziz (15:01.678)
You know, I think it's very important. think that presidents are finding, and the governing boards are finding that really understanding the finances is important. I mean, we often see, as you know, closures that happen from one day to the next. You know, I am not intimate to the inside of some of those closures, but it is always puzzling of how, you know, presidents and boards...
did not know that they had a financial situation that would require them to close their doors within a short period of time. That is a great disadvantage for students. So I believe that while many executives of universities and colleges are selected for their academic prowess, for their reputation, for their political skills, for their charisma,
The reality is they need to understand the machinery that they're doing this. I mean in the end, particularly in these challenging times where you know things are tight and you need to understand the challenges ahead, having a financial background or certainly a important financial understanding is critical.
Gary D Stocker (16:15.178)
And I'm to make certain that the listeners know that when we're talking about Newbury College, this is a closure. This college closed. And yet in closing that college, we're attaching those competencies to the leadership of that team. And one of those was prioritizing communication. And how many times, Dr. Z, have we seen colleges in trouble, financial otherwise, who send a spokesperson out to face the world? And you're suggesting that the leader really needs to be that face. Talk about that.
Ricardo Azziz (16:44.334)
So I think it's important to remember that when we talk about major institutional restructuring of higher education, it isn't always about successful mergers and consolidations and acquisitions and stuff. I mean, it's often about failed institutions that have that. But more importantly, when we talk about closures, those are not failures. I think it's really, really, really important for governing boards and the public to understand that when you close an institution,
that doesn't mean you failed. It simply means that the lifespan of that institution has exceeded, has been exceeded, that the need for the institution is no longer there and great need. so hence you have to now begin to plan closing like of so many businesses, right? I mean, of so many businesses. But the issue is you have to do it in a planful, careful...
future-oriented manner. You want to keep students in the first row in your focus, right? Because this is about students. I mean, there's a lot of good data now that indicates that when colleges close abruptly, those students are left adrift and many of them, almost all of them, never go back to higher education. The disappointment is so big. So the reality is that
Gary D Stocker (18:00.558)
All right.
Ricardo Azziz (18:04.872)
Dr. Cello was able to manage this closure with utmost professionalism, but also to keep everybody informed of what was going on. I think it's important for the leader to be there and to be the face, although I will also tell you that it's very important for the leader's team, speaking of teams, to also carry that message in almost the same tone and the same words. You don't want to have a lot of
sort of diversity of statements that confuse the community.
Gary D Stocker (18:37.304)
Yeah.
Gary D Stocker (18:41.186)
And then let's go back again just to touch on that legitimate use of power and authority. Because you talk again about the Newberry closure, about building transformative teams. And you said Dr. Cillo curated a team, but replaced individuals who did not align with the college's mission and values. That's a critical component, isn't it?
Ricardo Azziz (19:03.512)
So one of things that I learned a long time ago, my former chancellor, who actually hired me in Georgia, told me, reminded me this. And he reminded me that he had been CEO of multi-billion dollar companies and so on. And he reminded me that there were very few CEOs who regretted replacing somebody too soon.
there were many, many, many CEOs who regretted not replacing somebody soon enough. That was a lesson that in fact I understood and I found out the hard way that that was absolutely true. Absolutely true. And so that is what Dr. Cillo did. He realized that individuals on the team that had been there before the decision to close were there and they were certainly not going to be
supportive and they were not going to be of help. And so he made the difficult, but to be fair, the important decision of replacing individuals. Remember that in the end, you have to make sure that individuals who are on your team also are aligned with the vision of where we're going, right? I mean, we all have a vision. If you yourself as an executive leader do not align with that vision, then it's time for you to move aside and let somebody else.
handle the vision and the direction that the governing board has set.
Gary D Stocker (20:35.532)
And then finally the case study, some details associated with the Board of Trustees. And you note in the book, and this is on page 154, that Dr. Chilla was effective in reminding the board of their fiduciary responsibility as part of this closure process. He also, you note, had the courage to say no to other colleges who were also, I guess, who presented a similar weak financial profile.
Both of those you don't always see.
Ricardo Azziz (21:07.0)
Well, I think it's important, that's why we've highlighted this case. mean, know, boards are often composed of both business people, people from the community, and also alumni. And again, many of the individuals of the board think that their job is to preserve the university no matter what, to preserve the heritage and the history and so on and so forth, without understanding that their primary, first step responsibility of any governing board is their fiduciary responsibility.
And again, you know, if the numbers are not there and the mission, while important, is no longer able to be sustainable, like any other household, like any other enterprise, it's just time to wrap it up and close it and to do it in a dignified manner that actually allows you to preserve history and heritage. Lots of times I get asked, we close, we'll never have the history again, and so on. And that's not entirely true. In fact, if you do it right,
and you are able to invest some of those funds early on, you can create centers, can be, you know, endow lots of things. You can really keep the mission and the heritage and the history of that institution alive for a long.
Gary D Stocker (22:22.382)
And then finally for this episode, you talk about leading from above, you talk about leading from behind and from the side. And that, guess, is in contrast to leading from the front. Step us through the differences and the opportunities and challenges for both.
Ricardo Azziz (22:41.688)
You know, I think that when we talk about leadership and leading a team, if you would, or leading an initiative, there are five positions. You can lead from above, right? Sort of a bit, I don't want to say autocratically, but you provide orders and people follow them, right? That's the more common view. You can lead from the middle, right? You can be part of the team and so on and so forth. That's more common in startups and these kind of things, right? You're another guy within the team.
You can lead from behind. You can sort of encourage people to do what they need to do and encourage them and so on and so forth and nudge them a bit and so on, but not really use authority. And you can lead them from below. And below really is the sort of the servant leadership kind of thing where you sort of are there to support them as they move forward. And these are all useful positions. And to be fair, leaders need to be able to change the positions of how they do this.
according to the need, right? It isn't just one static piece. Now, in a merger though, we really ask leaders to lead from the front, and that means that they will carry the battle, right? As you see in some movies, you know, with the charge and the general is at the front, know, waving his sword as he enters into battle, right? I mean, this is the key.
People want to make sure that you have skin in the game and that you are truly passionate about what you think and that you are really there and not hiding behind somebody else's position. so, while to be fair, during their reality, during normal operations, most presidents should be in the background, not be heard, except to pronounce positive things or if there is some radical negative thing, then obviously to come out and speak to it.
But in general, during the normal operations of a school, presidents are reminded, you just stay in the background, you allow your spokesmen's and your deans and your this and your that all to do that. So in this case, it's different. mean, if people do not see you at the front, they don't think you own it. And so you will lose your ability to actually lead. Now,
Ricardo Azziz (24:56.93)
I will tell you that that is a double-edged sword, right? If they see you leading too much and you don't have a team that's around you and you don't have voices that actually speak positively about this, you know, the reality is that in the end, they may think that the initiative is your idea, right? And so even though you're the servant leader or you are the executive, that is tasked with taking it, with carrying it on. You know, that was one of the things that we ran into in Georgia, right? I mean, I was...
very enthusiastic about the initiatives that we were undertaking. I understood the need. I have great respect for the board and I follow orders pretty good, if I believe in them of course. But there was a lot of confusion. The community sort of viewed that as, well, this is his idea and he's leading this kind of thing. And so that's a bit of the double-edged sword.
Gary D Stocker (25:52.409)
So the book is Leading Existential Change in Higher Ed Mergers, Closures, and Other Major Institutional Restructuring. It's from Johns Hopkins University Press. Doctors Lloyd Jacobs, Bonita Jacobs, Richard Katzman, and me, Gary Stalker, are all contributing authors. The book is available at Amazon and other online retailers. Dr. Aziz, always pleasure. Let's do it again sometime.
Ricardo Azziz (26:14.68)
Thank you very much for having me. Appreciate it, Gary.