This topic has had a lot of coverage for several years, starting even before Enron and other high-profile ethical messes. The global financial meltdown has given this issue even more steam. I just hope that this time the discussion evolves past “teaching ethics,” which is a questionable concept (adults learning to be ethical). I see a lot of business schools digging way deeper than new courses or experiences or requirements of some sort. They are looking at their entire cultures, the values that the institution stands for, the deeper ethic of the place and how the entire enterprise reflects that there is a lot more to sustainable business success than technical skills, hands on experience, global perspectives and the many other buzzwords nearly every business school today tries to use to differentiate its value in the marketplace. Beyond the fact that this is the right thing to do and will, if pursued seriously, perhaps up the esteem the world currently has for business education, it’s also a smart strategic step from a reputation building standpoint. I’ve studied many business schools and never seen one that doesn’t have at its core particular values and a related educational culture that really makes it unique. I see an era where great business school brands will be built on the character of institutions and how well they cultivate a new set of values in students. For further reading on the subject, I recommend this recent article in the Baylor Business Review.

- Tim Westerbeck, Managing Director & Principal

Why Character is Destiny for Business Schools – and the MBAs They Groom, in the new issue of the Baylor Business Review takes a look at the role issues of “character formation” play in the business school of the future.  In the article, I observe that this is not only important from a curriculum standpoint—and, we all hope, for the future of the global economy – but also regarding how schools will differentiate their brands in today’s hypercompetitive management education marketplace.

Marketing on a specific type of program attribute is ineffective, when so many business schools – or at least their marketing – look the same on nearly every level.  What each school owns that is unique is its values and culture, the basis of a distinctive brand.

- Tim Westerbeck, Managing Director & Principal

It wasn’t just that Princeton had found a new way to appeal to students; this particular offer helped reverse a strange decline in matriculation at elite colleges among a particular subset of the college-bound population: high-achieving students from low-income families. A growing body of research tells us that these students—even when they know on an intellectual level what they might go on to earn in their chosen fields—are averse to debt.

As a demographic group, these students are more diverse than the college-bound population as a whole, and are also more likely to be first-generation students. They are also rare among subsets of the college-bound population in that they are growing in number, while the overall college-bound population shrinks.

In the years that followed Princeton’s announcement, the rest of the Ivy League colleges and several other highly selective institutions followed suit. Since 2001, the number of colleges replacing loans with grants for low-income families or all families who qualify for aid has more than doubled every two years, reaching a total of 39  in 2009*. Even as the policy adds pressure to already stressed endowments, many schools report that delivering on the no-loan promise remains a high priority. We haven’t begun to see, much less measure, the total seismic shift in applicant and admitted student demographics this change has brought, but some early signals are interesting.

At Princeton, 60 percent of students in the incoming class of 2013 will receive financial aid. A total of 487 students from minority backgrounds represent 37.4 percent of the entering class. That’s a minority student headcount increase of 60 percent over nine years ago, when just 305 students were from minority backgrounds. At the same time, selectivity has increased since 2001.

Lipman Hearne’s 2009 report High Achieving Teens and the College Decision offers insight into the values and motivations that drive students to make the choices they do. Particularly in this climate of increasing economic pressure on both family savings and college endowments, how critical is financial aid to high-achieving students? What do students need to know from the colleges that want them, and how, finally, do they choose from among their options? We’re far from knowing all the answers, but we look forward to beginning a lively discussion—with you.

- Tom Abrahamson, Managing Director & Principal

*Excludes another 23 colleges that make this offer, but limit eligibility by residency or GPA.

Having worked for many years in higher ed – both in faculty positions and as a consultant – I don’t argue with their basic premise:  The model has real problems. Duplication of effort, fierce fiefdoms, historic insulation from the marketplace, lack of a structure that could link real planning (which requires tough choices) with the authority to execute the plan, political intervention: All are endemic.  But in a larger sense, the model has these problems because the enterprise is – and by its very nature must be – messy.  On the undergraduate side, incoming freshmen don’t know what they want so they need the latitude to fumble their way forward to some more lasting definition of self ( aka…“Seven years of college down the drain” – Bluto). In graduate and professional education – particularly at the doctoral level – the “tradesman” model that attracts a grad student is often in conflict with faculty assumptions that what they are actually doing is replicating themselves (even when there aren’t any faculty jobs on the horizon).  In research, we learn as much from what doesn’t work as we do from what does (“I have not failed. I’ve just found 10,000 ways that won’t work.” – Thomas Edison).

The biggest problem I have with the piece is that the authors leave perhaps the most important point to the conclusion – the myth that “American colleges and universities are grossly overfunded, and that better management of resources by itself will generate enough ‘new money’ to pay for the nearly doubling of capacity needed to return our country to internationally competitive attainment levels.”  All their other points – which mitigate against this conclusion – are thoroughly developed, and this key factor is tossed in nearly as an afterthought.  What do you want to bet that in Congress and statehouses across the country, the first eight myths – which seem to argue that efficiencies alone can save the institution – are widely touted, and the final, meek conclusion gets short shrift?

Our higher ed institutions were dealing with a plethora of problems before the current economic malaise – problems that have only been exacerbated by shrinking state budgets, endowments, and family resources.  The biggest loss, though, would be one of faith: If the public no longer believes that education is the path to personal fulfillment and prosperity, or that they can’t afford to take that path, then we’ve quite simply lost the game.

- Rob Moore, Managing Partner

Last week, we hosted a group of Chicago-area development officers who shared their opinions on the challenges of raising money during a crisis. One director reported that annual giving to her program was down 70 percent. Good will and warm feelings won’t solve her problem. So what will?

I wish our group had an easy answer for her, but the consensus suggested that going back to basics was essential: building a case, connecting with donors (often one-on-one) and helping them understand the long-term and emotional impact of their giving. We’ll be sharing more of the dialog in the coming weeks, so come back for more…. But in the meantime, we’d love to hear about your experience. What’s working for you?

- Sara Stern, Executive Vice President, Creative Services

A  recent Houston Chronicle article includes further commentary from Jamie Merisotis, president of the foundation, on the urgency of these educational goals.

Lumina Foundation for Education is a public relations client of Lipman Hearne.

- Rodney Ferguson, Managing Director & Principal

Yes, tuition, room and board, and fees at the very top, undiscounted, elite colleges and universities are nearing $50,000 annually. But how many students and their families actually pay that price?  The average discount rate reported by NACUBO (in The Chronicle, I might add) is nearly 35% – making the overall cost as actually paid much lower than that scary full-price tag.  And yes, again, endowment earnings are down for now, but most colleges and universities that I know about have dedicated even greater resources to student financial aid in recognition of these challenging economic times.

What’s more likely than a bursting bubble is a shift in the market in which mid-tier private institutions are going to have to compete ever more strongly with regional public universities and regional publics are going to have to compete ever more strongly with community colleges.  In fact, according to McKinsey reports, the industry that gains most in a recession is education.  Take a look at the stock prices of the major for-profit providers – Apollo Group, DeVry, and Career Education. While they are not busting the market moving forward, their trajectory is far better than that of the financial and industrial giants that got us into this mess.  And a college education is still the best bet in any market.

-Rob Moore, Ph.D., Managing Partner

As parents deal with the realities of the economic downturn, they’re taking on a greater role in the college decision-making process.

Lipman Hearne explores how the economic downturn is affecting parents’ level of involvement in one of the largest investments they’ll ever make – their child’s college education. “The Rules Have Changed: How the Parent-Student Team Picks the Perfect College” provides three ways colleges can more effectively communicate with parents and their children. The report draws from our experience with hundreds of colleges and universities, interviews with parents and admissions professionals, and data from the Cooperative Institutional Research Program (CIRP) Freshman Survey. Download the free report.

So, what to do? The answer is to effectuate a marketing mind-set around return on investment, do the best research and planning you’ve ever done, and become a champion on your campus.

Read my full point of view article that details nine tips on how to become an enrollment management champion.

- Tom Abrahamson, Managing Director & Principal

Lipman Hearne Point of View on Yield –