The landscape of higher education is undergoing a seismic shift, and institutions that fail to adapt may find themselves left behind. In a thought-provoking discussion, Eduvantis President Tim Westerbeck and Dean of the Haub School of Business at St. Joseph’s University Joe DiAngelo delve into the increasingly prevalent trend of mergers and acquisitions (M&A) in the higher education sector.
The Quest for Strategic Alignment
As DiAngelo astutely points out, the success of any M&A in higher education hinges on a meticulous process of alignment. This crucial “homework stage” involves a deep dive into whether the merger or acquisition aligns with the institution’s overarching objectives and enhances its existing offerings. It’s not just about the nuts and bolts of operations; cultural compatibility is equally critical.
“Everyone would be doing it if it was peaches and cream,” DiAngelo quips, acknowledging the inherent challenges. When institutions with disparate faculty cultures and structures attempt to merge, the disconnect can be profound. The strategic component of the process is paramount to ensure institutions don’t find themselves grappling with the fallout of an ill-suited M&A.
Bracing for Market Upheavals
The impetus behind the growing openness to M&A is clear: survival in an increasingly competitive landscape. DiAngelo highlights the stark reality: “In the Northeast, the 18- to 22-year-old population will go down 20% in the next few years.” This demographic shift, coupled with the intense competition in metropolitan areas, is driving institutions to seek strategic mergers to stay afloat.
The Philadelphia area serves as a microcosm of this trend. “As of 2022, there were 88 colleges within 25 miles of Philadelphia, we merged with one so now there’s 87. However, there’s not going to be just 87 schools here five years from now,” DiAngelo predicts, underscoring the imminent proliferation of institutions and program offerings.
The message is clear: the strategies of yesteryear won’t cut it in the face of these seismic shifts. M&A may be one of the key solutions.
Navigating Operational Redundancies
Of course, M&A isn’t without its challenges. Operational redundancies are an inevitable consequence, and while the process can be painful, it’s essential for long-term sustainability. “You may need more people but you don’t need two registrar’s offices; you don’t need two sets of complements in IT,” DiAngelo explains.
Moreover, the pandemic has turbo-charged the shift to online education. “If you’re not in online education, you’re behind the eight ball,” DiAngelo asserts. As institutions explore scaled learning and the reduction of in-person facilities, robust online programs are becoming increasingly vital.
Adapt or Die
DiAngelo’s outlook is sobering yet realistic: “With fewer students, institutions must adapt. Those that don’t adapt will die. You got to offer something that’s different, value-added, where there’s an outcome that’s measurable.”
This frank assessment underscores the urgency of the situation. The era of mergers and acquisitions in higher education has arrived, and it’s reshaping solutions for imminent market shifts. For institutions, staying ahead of the curve means not just recognizing this new reality but strategically adapting to thrive within it.
As the higher education landscape continues to evolve at a breakneck pace, it’s clear that bold, forward-thinking leadership will be the key to navigating these uncharted waters. Those who embrace change, seek out strategic partnerships, and prioritize innovation will be the ones who not only survive but thrive in this brave new world of higher education.
Watch the full discussion
To hear more insights, watch the full episode of The Business Education Revolution podcast.
About the Author
Tim Westerbeck, President
Tim Westerbeck is a leading strategic advisor to higher education institutions around the world. His work focuses on helping institutions grow amidst significant disruption, by defining strategies and new business models aligned with the future.
He has served as a columnist for Businessweek and is a frequent commentator in The Wall Street Journal, The New York Times, and other global media.
Tim is also a regular presenter at global industry forums, such as the Indian Management Conclave, AACSB International, The European Foundation for Management Development, and others.
