Transcript Slide 1

CREATING COMMUNITY
NYASIS CONFERENCE
MOHONK
April 27, 2006
FORUM
STRATEGIC CHALLENGES AND
OPPORTUNITIES FACING THE
BOARDING SCHOOL COMMUNITY
Pam Safford – Associate Head for Enrollment and
Planning
Concord Academy, MA
(with credit to Leo Marshall
Director of Admission and Financial Aid
The Webb Schools, CA)
Goals
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Explore the global strategic challenges
facing U.S./Canadian boarding schools
Create a dialogue centered on each
strategic issue
The process of dialogue is a process of ‘awakening’, it entails a free
flow of meaning among all the participants
- David Bohm, Physicist
For every complex problem there is a
simple solution that is wrong.
George Bernard Shaw
WHINING
Questions
 What are the external challenges to the industry
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Are there any that are more threatening than others?
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Is the industry responding collectively?
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Rising tuitions?
Increased demand on financial aid?
Changing family patterns?
Increased rivalry?
National? Regional? Consortia?
What are the opportunities?
Strategic Advantage
Uniqueness Perceived
by Customer
Overall Cost
Leadership
Differentiation
Strategic Target
Industry-wide
Particular
Segment Only
Low-cost Position
Focus
Can change (Not easily)
Can’t change
Would make some
difference
Would make a big
difference
•Birth Rate
•Stock market/economy
•Global instability
•Mission
•Price
Source: Erdmann
Associates
Industry SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
INDUSTRY TREND # 1
Enrollment
Boarding School Enrollment – 1994-2004
60,000
50,000
40,000
Boarding
Boarding-Day
Day-Boarding
30,000
20,000
10,000
0
1994-95
1999-00
Source: NAIS StatsOnline
2002-03
2003-04
2004-05
TABS Schools Enrollment 2001-2005
90,000
80,000
70,000
60,000
50,000
Total Enrollments
Boarding
40,000
Day
30,000
20,000
10,000
0
2001
2002
2003
2004
Source: The Association of Boarding Schools (TABS) Opening of
School survey - 2005
2005
N=228
GLOBAL TREND #1
Demographics
"Failure to prepare is preparing to fail."
— Mike Murdock
U.S. High School Graduate Projections
Source: Western Interstate Commission for Higher Education/Erdmann Associates
500,000
400,000
300,000
Asian
Latino
African-American
200,000
100,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
U.S. High School Graduate Projections
Source: Western Interstate Commission for Higher Education
1850000
1800000
1750000
White-Non-Latino
1700000
1650000
1600000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Demographic Trends of Interest
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The U.S. population grew increasingly metropolitan each decade from 28%
in 1910 to 80% in 2000
The West grew faster than every decade throughout the century.
Most rural areas of the United States are now growing at the fastest rate in
more than 20 years
The Hispanic population more than doubled in size from 1980-2000.
The white population grew more slowly than any other group in the 2nd half
of the century.
Blacks along with Asians and Pacific Islanders have been the most
regionally concentrated groups
The percentages of races other than white has been highest in the West
since 1990.
The largest 5-year age groups were 35-39 and 40-45 years, a large
segment of the baby boom generation.
AND….the mean center of our population is now in Phelps County, MO.
Source: Census 2000 Special Report: Demographics in the 20th Century
Questions for conversation
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Are our schools ready to pursue the emerging majority
populations? (implications for recruitment & retention of
faculty of color, students of color, cost associated)
In that we are mostly regional and international in
composition, and regional is in decline, what is our plan
for moving into new geographies (fairs in Vegas not
enough…)?
Why do we travel to Asia? (did you know that there are
more South Koreans attending bdg school in China than
in the U.S.?)
Did you know that UK bdg schools collaborate, have an
ad campaign and are recruiting in the U.S.?
Where else should we look?
Discussion observations
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Do we know what bed capacity is at TABS
schools?
What defines “full-enrollment”: beds or
mission-appropriate beds?
We need demographic data for top 4% of
income earners with children: where are
the jobs, where is the $?
INDUSTRY TREND #2
Cost of Education
Business has only two functions -- marketing and
innovation
Drucker, Peter F.
School Median Tuition- Grade 12
35,000
30,000
25,000
20,000
Boarding
Day
15,000
10,000
5,000
0
1994-95 1999-00 2002-03 2003-04 2004-05
Source: NAIS StatsOnline
Cost of Independent Education
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Median day school tuition increased between 4.9% and
10.8% (depending on region) from 1999 to 2000.
Median day tuition for grades 9 - 12 was $13,450 in
2000.
Adjusted for inflation, median tuition in day schools
increased 30 percent in the past five years.
Tuition increases have exceeded CPI on wages for the
past decade
Source: National Association of Independent Schools; Management Institute
Series, TABS Conference, 12/1/2005
Questions for conversation
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Currently, schools relying primarily on tuition
increases and expansion of day population, and
secondarily on campaigns for revenue --- can
this continue indefinitely?
What are we doing to control/reduce cost?
What is implication for setting price annually vs.
long-term financial model
Discussion observations
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By definition, we want to remain
“intimate” which doesn’t equal growth
Int’l population: mission-filler or bed-filler?
Day creep… as way to stay solvent – at
what cost?
INDUSTRY TREND #3
Financial Aid
“You don't drown by falling in the water; you drown by staying
there."
— Edwin Louis Cole
Financial Aid Facts
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30%+ of students in boarding schools receive needbased grants compared to 16.5% in day schools
Boarding-day schools provide highest percentage of full
need-based aid at 10.5% of students.
Between 1994 and 2004 there has been an 18%
increase in number of students receiving aid at all NAIS
schools. The number of students of color receiving aid
increased 46%.
Regarding no-need merit-based awards, 811 students
received over $2.7m in 2004-05 compare to the inflation
adjusted $2.3m awarded to 663 students in 1994-95.
Average merit awards in the SE increased 75% adjusted
for inflation; decreased in the West by 46%.
Source: Financial Aid Statistics in NAIS Member Schools. 2004-05
Questions for conversation
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It appears that race/high need are more
intertwined than ever at our schools --- are we
OK with this and, if not, what are we doing to
change this?
Some suggest that we should drop need-based
approach and turn to system that determines
price point for each family (sliding scale) --implications for industry if we do so?
Discussion observations
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Is the net revenue model, vs. full beds, the
model of future?
Merit awards increasing at higher ed --- what
does this mean for us?
What is the middle class? @50K a family needs
full assistance; at 125K, a family needs full to
partial assistance
INDUSTRY TREND #4
INTERNAL COMPETITION
"If you chase two rabbits, both will escape"
— Unknown
INDUSTRY ANALYSIS
Threat of
Independent
Day Schools
Threat of
Parochial/Diocesan
Intensity
of
Christian Schools
Bargaining power of
Rivalry
Buyers
Homeschools
Distance Learning
Threat of
Public
School
Substitutes
•IB
•Charter Schools
•Magnet Schools
•Schools w/I
schools
Resource: Porter’s 5 Forces +
+ Standards
Rivalry is stronger when
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There are a large number of competitors and
they are of similar size and power
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The industry is growing slowly
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There are high fixed costs
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There are high exit barriers
Source: N. Friedman, Claremont Graduate University
Questions for conversation
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We are currently fighting over same small pool
of kids --- are we content simply to offer more,
and more innovative, revisit days, hoping to
yield vs. the guy next door (competition for
“hockey players” as mirror of what’s to come)?
What other solutions exist (work together to
expand the pool…)?
Discussion observations
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New int’l regions for interest/recruitment:
So America? Russia? China?
Global Trend #2
The REAL Competition
"It's as BAD as you think, and they ARE out to get you."
- Bumper sticker
Public Education
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New York City--Hired 6,300 new teachers this year, only
43 percent of whom are certified. On August 7 still had
1,700 vacancies to fill.
In the U.S., 54 percent of history students in grades 7 12 are taught by teachers who have neither a major nor
a minor in history.
“High Schools in U.S. are not adequately preparing
American young people for college.” National
Commission On the High School Senior Year, 2001
Confidence in Public Education
According to the Gallop Organization:
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In 1993, 39% reported they had a “great deal of
confidence” in public schools; 23% reported they had
“very little confidence.”
In 1998, 36% reported they had a “great deal of
confidence’ in public schools; 26% reported they had
“very little confidence.”
Discussion observations
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Are boarding schools really making their case (vs. day
schools)?
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Boarding schools should “walk the walk” --- require day
kids to board for a year?
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Our schools include the cans, wills, shoulds, musts --segment your own population --- is if where you want it
to be, where it should be via your mission? Who needs
bdg school?
Our job is to create need
WHAT’S NEXT?
"Courage is doing what you're afraid to do. There can be no
courage unless you're scared."
— Eddie Rickenbacker
World War I hero
Questions for conversation
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Are YOU (enrollment manager) sitting at the
right table at your school to share this
information and introduce strategic thinking?
Are you and your Head understanding these
issues and prepared to educate others?
Are your trustees engaged/educated enough to
rise to these challenges? (Do they go to these
kinds of conferences?)
Essential Readings
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Bennis, W. & Biederman, P.W. (1997). Organizing Genius: The
Secrets of Creative Collaboration. Reading, MA. Perseus Books.
Csikszentmihalyi, M. (1997). Finding Flow: The Psychology of
Engagement with Everyday Life
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Csikszentmihalyi, M. (2003). Good Business: Leadership, Flow, and
the Making of Meaning
Collins, J. (2001). Good to Great. New York. Harper-Collins.
Drucker, P.F.(2002), The Effective Executive. New York. Harper
Collins
Essential Readings
Drucker, P.F.(2001). The Essential Drucker. New York.
Harper Collins
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Hellerman, B. (2004). Bad Leadership. Boston. Harvard
Business Press
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•Kouses, J.M. & Posner, B.Z. (1997). The Leadership
Challenge. San Francisco. Jossey-Bass.
•Kotter, J. (1996). Leading Change. Harvard Business
School Press. Boston.
•Lipman-Bluman, J.& Leavitt, H.J. (1999). Hot Groups:
Seeding Them, Feeding Them, & Using Them to Ignite
Your Organization. New York. Oxford University Press.