Aug 3, 2017

Financial Solution #1 > Market Collaboration

In nearly every independent school or college market in which we provide services, I am reminded regularly about the redundancy of similar services and programs.  While there is clear data that supports a nationwide decline in the enrollment in and demand for independent schools, why is it that indy schools continue to operate programs that are so similar to their competitors?  As part of our current blog series “Financial Forces and Their Impact on Indy Schools”, let’s focus on how market collaboration might be one lever that our schools could pull to lessen the financial challenges they face.

Let’s start with a series of strategic questions.  Suppose in our example you work for an independent school in a mid-sized metropolitan area that features three total independent schools, one large parochial school, and several niche schools.  

–Does every school have to have their own business office?
–Could core outsource services be centralized, such as cleaning, grounds, etc?
–Do all three independent schools need to have state-of-the-art athletic facilities?
–Does each school have to be a leader in STEAM?

OK. You get my drift.  As a cohort, we have a serious strategic financial problem with adding expense.  We continue, year after year, to add cost and pass the expense on to the consumer, assuming that they will choose our school over a very similar one across town that has the same programs, similar facilities, and comparative quality.  This problem continues to plague our industry and we have yet to make the necessary changes to our offerings. 

Is it possible that these three hypothetical independent schools are actually peers, not competitors, and could strengthen each of their own financial circumstances if they started working together on market collaboration?  What if they viewed themselves as part of a larger ecosystem of offerings, similar to the Claremont Colleges in Southern California, finding ways to eliminate redundancy in offerings and centralize some redundant services and programs?  I really believe the future is going to force schools to collaborate on cost containment, market share, and collectively deciding which school is going to distinguish themselves for specific and signature programs.  We need to stop competing with each other and start collaborating as peers. 

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