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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 (00:01.849)
Welcome back to a special episode of This Week in College Viability. Hi, everybody. Gary Stocker back in front of the blue yeti microphone with a special guest today. Carla Leeper joins me and Carla is the vice chancellor for strategic communication and marketing and chief of staff to the chancellor at the University of Tennessee Health Sciences Center. Carla, thanks for making time on this Friday afternoon.
Karla Leeper (00:25.784)
Thanks, Gary. I'm excited to visit with you today.
Gary D Stocker (00:28.697)
So your experiences have been widespread throughout higher education. I just want to focus kind of on the communication piece in conjunction with mergers today. It's kind of what I want to focus on, Carla. So I guess the first question would be, from your view, what are the primary drivers or even tipping points that lead a college's leadership to really seriously consider a merger as a viable option for their future?
Karla Leeper (00:56.034)
That's a great place to start because I think you have to be intentional as you begin to consider whether or not a merger is an option for you. I really think there are three things that should communicate to leadership that maybe a merger is something they want to think about. I think the first one is what is the trend in your enrollment over time? Is it going down? Is it going up? That seems like kind of a no-brainer.
But if you are running a university and there seems to be less demand for what you're offering, you need to figure out if you need to do something different. Or you need to figure out how expensive is it going to be for you to try to recoup the enrollment numbers that you've lost. And sometimes it just costs way too much to try to grow. I think the second thing too is how are you deviating in your effort?
to make your university continue to run from your mission and what your view of the best student experience is. When you start to have to economize and make cuts and make changes, and you really start to eat into the quality of the student experience, that's an important moment for you to ask if you're really headed in the right direction. And I think the third thing is, are you making changes in your operations, whether it's budget cuts, restructuring, or other things?
that are actually creating more risk for your institution. So do you have people with too many roles where they can't effectively do the work that you need them to do? Is your deferred maintenance so far behind that you have a plant that is really not functioning well or safely? To me, those are the three big things.
Gary D Stocker (02:43.725)
Interesting. in your experience, when you help an institution build, they've made that decision and they're building that case for a merger, what are some of the critical components to include for stakeholders like the board and maybe even senior faculty to get some buy-in or at least close to buy-in from the start?
Karla Leeper (03:06.7)
Yeah. I think you have to begin by understanding that when you start to have this conversation, people have a couple of different thoughts and they're very emotional. One is we're failing. We're not doing a good job. People will see a discussion of a merger as sort of a concession that, you know, we've not done what we needed to do to keep this university that they love alive. And
And so you've got to begin with the idea that they're going to perceive what you're talking about as a criticism. I also think you have to understand that people fear the loss of an institution that they've loved. know, higher ed is funny. We bring people in and we try to get them to really emotionally connect with the university. And then they leave and we start to change immediately. And, you know, we build new buildings and we change the way we work. But what they loved was the experience they had when they were there. And I think people fear that in a merger,
the memories they had, the place that they had a passion for won't exist. So I think given that you're really starting from an emotional place, you have to spend a lot of time talking to people about why it's good for the institution, its students, its future to think about a merger and to have some clarity around what you hope to achieve and what things are important to you as you have these conversations. Those are the things that will help you connect.
with all of the big feelings that people are having when you start to talk about a merger.
Gary D Stocker (04:39.203)
And I've had others on the podcast talking about mergers as well. universally, the period they acknowledge, universally they acknowledge that when a merger is just a consideration, that time period is incredibly sensitive. How do you advise leaders in your experience, how do you advise those leaders to balance the need for confidentiality with a desire for transparency? And then I have a follow-up on that.
Karla Leeper (05:07.232)
Sure. Yeah, you know, so much of what you're talking about is tentative. It's related to sensitive transactions. What I have always found in these moments is I tell everyone as much as I can, and then I explain why I can't tell them more. And I give them a clear sense of when I will be able to tell them more. I think what makes people more afraid than anything is ambiguity. And if they understand that you're telling them what you can,
You give them the business case for why some things need to be confidential. And then you promise them that this uncertainty will end at some point and there will be more of a conversation. What you do is you build yourself some trust and you gain a little grace as you go through all those initial steps that you need to go through when you're starting merger conversations.
Gary D Stocker (05:58.221)
And is there anything like a cookbook? These are my follow-up questions. Is there anything like a cookbook that would list some best practice communications and best practice communication timelines? And then what are the very first groups you should talk to?
Karla Leeper (06:14.17)
There are couple of very good books out there. Ricardo Aziz and some of his research partners have written a couple of very good books, and one of them in particular speaks to the question of communication. But the thing that I would say is, if you've seen one merger, you've seen one merger. Every campus has a different culture. Every campus has a different set of relationships with its leadership. The kind of merger you're considering may be quite different.
depending on whether you're thinking about merging with an institution that's like you or with a nonprofit entity or something else. And so I would say use those books to give you sort of the best practices, the baseline, but really sit down and think about who do I need to be talking to and what am I asking of them and build a strategy that really focuses on those audiences rooted in your culture.
and the expectations that are present in your culture. The last thing I would say about this is you have to start these conversations early. If you are starting the conversations with your campus as you are beginning the merger discussions, you're too late. You need to make sure your campus understands the financial situation of your campus well in advance of any merger discussions. I think the most disruptive communication situations that I've seen
Gary D Stocker (07:26.127)
Same mention I've heard others say, if you've seen a college merger
Karla Leeper (07:38.06)
or when the campus felt surprised or the board or the leadership felt surprised that a merger might be a necessary thing to consider.
Gary D Stocker (07:50.597)
So you mentioned you've seen one merger. You've seen one merger. There's really no cookbook, but maybe some guidelines. Is that fair?
Karla Leeper (07:58.734)
I think so. I would say be as transparent as you can, be as timely as you can, be as fact-based as you can, utilize the leadership groups that already exist on your campus, and try to include some of them in your circle of trust. The faculty senate leadership, the staff council leadership, your alumni board, your board of trustees.
use them as sounding boards so that when the time comes when you have broader communications, it's not just the leader of the institution or their communication folks, you have others who are already invested in the process and can help you be advocates for all of the many steps that come once you get past that initial merger conversation.
Gary D Stocker (09:15.065)
What's the most common crisis point or even just communication breakdown you see during that merger announcement period?
Karla Leeper (09:25.048)
Yeah, I think some of the most difficult moments in a merger conversation are that you have two parallel tracks running, right? In the background, you have conversations about a merger or a potential strategic partnership. At the same time, you have to manage the ongoing regular day-to-day business of the institution. And as a leader, you have to make sure that your communication is matching between those two situations.
So on the one hand, on the day to day and the regular student recruiting and in the new faculty orientation and the staff council meetings, you you want to say everything is great. We're working hard. Things are going well. In the meantime, in the background, you're having conversations about the possibility of a merger because you see down the road, there is a challenge. You have to find a way to communicate that bridges the gaps between the conversations you're having and justifications for
a potential partnership with the day-to-day operations of what you're doing. And I think a lot of the crises happen when you find that those two lines of communication don't match up very well. And it feels as if the leadership is being disingenuous. And it goes back to that trust word that I used a while ago, right? You have a crisis when people don't feel like they can trust what you're telling them. There is a great period of ambiguity and potential change.
And the thing that they want to be able to say is that they trust that their leadership will be doing things that are in the best interest of the institution.
Gary D Stocker (11:00.389)
So I've teased often in a lot of the media and social media that I do that in higher education, if somebody wants to change the font size or the font type on their business card, students, faculty and others will protest. It's just the proverbial nature of the beast. So we talk about mergers, even cutbacks and layoffs. Faculty and student and even community protests are a real possibility. And when that internal opposition becomes public and sometimes very vocal,
What's the first step that the leadership or the communications team should take?
Karla Leeper (11:35.948)
I have lived through some of that firsthand. And it is a challenge. We train young people to think for themselves. That's the part of being on a college campus. And we have a lot of really smart people who are on our campuses, who are independent thinkers, and that's why we've hired them. And so a college campus is sort of, definition, going to be a little bit of a tumultuous place. But I think when you're looking at a big...
institutional structural change like a partnership or a merger, and there is unhappiness. I think the first thing that you have to do is to ascertain what it is that is at the root of the protest. The institution that I was leading that had that challenge, we spent a long time talking to people to find out what it was that they cared about that made them so active and in opposing this.
And then we spent a lot of time trying to figure out how can we accommodate those concerns as we go through this process. And so I think it's really, sometimes you can't accommodate what they're worried about. If your financial situation is so exigent and they want the world to stay as it is, sometimes that can't happen. But an honest conversation where you're sharing the data with them about what the future of the institution looks like if you don't do something different can be helpful. And if at the end of the day, they're passionate,
and they're protesting and they're vocal because they love the institution, then you start there with common ground and you figure out how to use this process to really build something special and to maintain the things about the institution that they love.
Gary D Stocker (13:12.293)
I guess, during these podcasts, I like to provide guidance to the listeners as well. And when we think about the communications, what's biggest single mistake an institution can make from that communications perspective when navigating that very tumultuous, to use the word, that very tumultuous period of time for merger?
Karla Leeper (13:36.174)
I think two things. think first failing to communicate on a regular basis. I think it's easy for us to get caught up in the middle of the business dealings and having the meetings and the conversations and just thinking, well, when I know a little more, I'll communicate. Sometimes the fact of just communicating, I don't have anything new to tell you this week is enough. It's a situation where they don't think you've gone silent. They're not speculating on what's going on because they don't know.
When I was leading an institution through some of this work, I probably over communicated, but I answered every email that I got. I answered every phone call that I got. We had a website that we regularly updated and they knew every Thursday there would be an update. And again, some days it was just no new news today, but they knew that they could count on that. And that's sort of the second piece is that anything that you do that reduces trust, inconsistency, inaccurate information.
anything that makes it appear as if you're being duplicitous. When you eliminate that sense of trust, it makes everything harder.
Gary D Stocker (14:45.061)
Looking ahead.
I have an easy question, but I'm interested in your perspective on this. Do you see mergers becoming more common in the next three to five years? And if so, what do think they're going to look like?
Karla Leeper (14:57.518)
I absolutely do. I all of the hard data bears that out. There are lots of institutions now that are merging. You see a story about one almost every day in the higher education trade publications. And I would expect that that pace will increase over time. The one thing that I think might be interesting going forward is I think there may be more institutions merging out of a position of strength. So I think
some institutions who are in good shape, but maybe are landlocked or have a limited geographic profile. Maybe they're in an area where the population's not growing or maybe they're in a place where, you know, good example, I know of an institution that I used to work for that was interested in the arts, but they wanted to have a footprint in New York and Los Angeles. And so they were looking for partners that would allow them to do that because they had a huge arts program, but they were in the middle of the country.
And so I think we may see, in addition to mergers of institutions that are struggling, strong institutions trying to advance their own position even further through a merger or partnership.
Gary D Stocker (16:10.809)
And we've talked about stakeholders. And in one that I think, I could be wrong, one that I think doesn't get a lot of input on the financial health and even potential mergers of colleges is our alumni. Are there any concerns you consistently hear from alumni about their college's financial health and maybe that it might end up having to be a merger partner?
Karla Leeper (16:34.274)
Alumni are really important for a couple of reasons. One, they often are great supports for your students. They're great connections for your students. That's your network. That's how your students find jobs and advisors and mentors and roles. It's also quite frankly, really important to the philanthropy horizon of the institution down the road. And if you alienate all of the alumni from a legacy institution,
you make a financial situation that was already tough even worse. And so I think, again, it goes back to those first principles. Those alumni felt that they had a valuable experience at that institution and they want to know that the kind of education that they received will still be available post the merger. They also have just very fundamental questions like, will I even matter?
You know, well, what will alumni weekend look like if my institution doesn't exist by that name anymore? Or what happens to the value of my degree? And you know, that's the name that was on my diploma. And so there are some very concrete things that alumni worry about. And so you want to keep them engaged. You want to keep them involved and you want to reassure them that there is still a place for them, that the things that they loved and cared about in the institution will still exist after this.
And in fact, they might even be better if you put the institution on a little stronger footing.
Gary D Stocker (18:07.351)
And Karla, first of all, thanks for your time. But one more question. kind of want to, if you would, envision a college, probably a private college, probably a smaller non-urban private college, that really needs to, if they haven't started the conversation about a merger, needs to start that. Imagine sitting down for a cup of coffee with the president and the board of trustee chairperson, and you give them one piece, one piece of guidance. What would that one piece be?
Karla Leeper (18:35.214)
Don't wait. If you're thinking about it today, your situation will not improve the longer you wait. In fact, it probably only gets weaker as time goes by. And so if it's crossing your mind, take that seriously and think about what a merger might look like for your institution. And then if you're open to that,
sit down and say to yourself, what are my absolute non-negotiables? What are the things that I care the most about in this situation? And then after that, develop a structured, orderly, reasonable way of identifying who those potential partners might be. But the line, hope is not a strategy, right? If this is crossing your mind and you're thinking about this, you should get to work.
Gary D Stocker (19:29.957)
Carla Leeper has been my guest. She's the vice chancellor for strategic communication and marketing and chief of staff to the chancellor at the University of Tennessee Health Science Center. She's also a consultant on mergers and acquisitions with the SPH consulting group. Carla, some good stuff, some good stuff. And I appreciate you making the time to chat this afternoon. And we'll look forward to talking again soon.
Karla Leeper (19:50.798)
Thanks, Gary. Have a great day.