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Mergers are a fact of life for some institutions in higher education. Ricardo Azziz, research professor in the school of public health at the University at Albany, says mergers are not always a bad thing. Ricardo Azziz is former founding President, Georgia Regents University; former President, Georgia Health Sciences University; and co-author of ‘Strategic Mergers […]

Ricardo Azziz, University at Albany – Mergers in Higher Education: The Need to Consider

In the summer of 2011, conversations began with the Governor’s office about potential mergers. Toward the end of the year an announcement was made that four mergers would occur. This resulted in eight institutions being merged into four. The most complex merger involved Georgia Health Sciences University and Augusta State University, which created one larger and more comprehensive institution than either had been separately. The University System of Georgia has had waves of mergers. Therefore much of the planning for the merger that resulted in Augusta University was done by the board and the administrative level of the University System of Georgia. Dr. Ricardo Azziz was instrumental in implementing that merger. Azziz continues to analyze the process that was used to create this complex merger. He co-authored a 2017 report for the TIA Institute and a book, Strategic Mergers and Higher Education, published by John Hopkins Press. Higher Ed Mergers: A Leadership Challenge Higher education mergers tend to be tenuous for multiple reasons, the biggest reason being that most mergers are not planned in advance – few institutions take the time to proactively consider the aspects of mergers and appoint appropriately experienced leaders.  Additionally, most institutions don’t have access to consultants with this expertise. Azziz believes that many higher education leaders who guide a merger are not anxious to be part of another merger. At the time of the Augusta merger, there was little information available about how to execute a merger between universities. Institutional leaders had no roadmap – only theoretical research about completing mergers had been published at the time, so leaders were in some ways flying by the seat of their pants.  One thing that helped was that the University of Georgia system hired a consultant to help with the accreditation of those mergers, as it took something off the already overflowing plates of the merger team. Higher education leaders who are leading mergers make every effort to network with those who have guided these types of organizational change and/or use an experienced consultant to guide the process. This will help leaders access the many tools needed to be successful. Seven Essential Elements There are seven essential elements that need to be in place for a successful merger:  Supportive and understanding board The right kind of institutional leaders A vision that encompasses and drives the merger so the university community sees itself as part of the merger A sense of urgency so people understand why this needs to happen A communication plan A robust project management system Resources  Most institutions wait too long to begin the merger process. These institutions may be facing a number of serious challenges, including budgetary issues and/or declining enrollment. The University of Georgia System leadership and state leadership took a proactive approach before the eight institutions were seriously in trouble and had reached a point of no return. However, the system officials had difficulty injecting a new vision or a sense of urgency because much of the data regarding the institutional selections was kept at the system level. Reasons for Mergers There can be many reasons for mergers; first and foremost should be to preserve a tradition or programs for students. Therefore, it is important to bring a focus of what’s best for students and how best to develop a higher quality education, experiences and training for students. This is the right focus that creates both a sense of urgency and focus. Emphasizing financial gain as the primary factor in creating a merger is the wrong approach to creating a sense of urgency because a merger is going to cost money. In fact, there will be additional costs in finances and personnel since the mergers need their own staffing and finances beyond what is available in the two institutions that are merging. Success vs. Failure Success is not an exact term when talking about mergers, but the bottom line should be about the students. If leaders keep the students and the quality of their education, experiences, and programs at the forefront of the vision of the merger, it becomes easier to see how the creation of a larger institution can offer more programs for students as well as more sustainable programs than what each smaller institution could provide. Failures of mergers can mean different things. These failures can include the institutions remaining apart because the administrations never fully combined. Even in cases such as these, whereas some institutions fail at merging, they use the experience to rejuvenate because they are forced to examine themselves carefully. Strategic Planning Mergers are usually discounted (or not even considered) as part of an institution’s strategic plan, but they should be.  The American Quality Foundation and Ernst and Young published a study several years ago that looked across a number of different organizations in the U.S., Canada and Japan. The researchers analyzed what would create positive growth from a market capital perspective. There were three common findings which align with Azziz’s experiences in mergers:  Strategy with good implementation Business process improvement that is focused on the customer Depth and breadth of leadership management practices.  When building their institution’s strategic plan, it is important leaders and governing boards consider all options, including mergers, acquisitions and strategic alliances, in their planning process. This allows these concepts to be part of the lexicon and planning. Transformational Change Many mergers are coming as a result of revolutionary change in the higher education sector, such as some institutions offering free on-line courses or a life-long learning process that is cumulative. Higher education also is under significant pressure with societal changes, including technology, the need and ability of individuals to regularly expand their knowledge base as well as rapidly changing demographics.  Unfortunately, higher education as a whole tends to be more comfortable with incremental change, and its leaders must expand their understanding and in fact embrace transformational change in the form of a merger. Azziz believes that higher education leaders must now adopt a more proactive and transformational leadership approach to ensure that future students get the best quality of education (which may not – and probably will not -- be the same type of education as they receive today).  For example, the current generation of students are hesitant to seek higher degrees immediately – they want to go into the workforce and because they know they will be experiencing a number of jobs during their career, they know they need to take a continuous life-long learning approach to adapt and develop skills and knowledge that haven’t been developed yet. To successfully meet this challenge, higher education will have to adapt by creating different badging and certificate processes, using wider technology and embracing a more diverse range of learning materials. Higher education needs to respond more decisively and planfully in what is happening in the external environment, which is revolutionary. Meeting these challenges requires a visionary governing board and leaders. However, these boards often don’t embrace their strategic responsibilities in relation to the schools they lead – the experience of most boards and higher education institutions is one of times when change wasn’t as radical.  In addition, board members often come from different industries and may not understand what is happening in higher education and don’t take the time to educate themselves. Clear Communication One of the critical things in mergers is communications. It is important to have a comprehensive communications strategy with concise messages that allows all members of the leadership chain involved in the mergers to deliver the same messages consistently. You cannot over-communicate, but conflicting messages and wordings are extremely problematic, especially because in academics, words matter. Project Management Project management is essential for a successful merger. Like dominos, a merger needs to have the individual pieces fall in the right direction at the right time to be successful – there can be severe implications for the institution if something is not done in a timely manner. Azziz was fortunate to have an experienced internal project management team who understood the complexity of the transaction, including having the numerous groups from accreditors to financial institutions involved. This comprehensive approach helped smooth the merger process. He recommended that smaller institutions hire an external project management team if an institution does not have one in-house. Resources Mergers require additional resources, both financial and personnel, beyond the needs of operating the two separate institutions that will be merging. In the case of Augusta, they merged a health sciences institution with a liberal arts / masters institution. The health sciences center had resources that could be diverted to fund the merger, whereas the liberal arts institution had less resources to dedicate. Culture The culture of a university campus is special and recognized. It also can be very difficult to cultivate when doing a merger. It takes a long time for a new culture to develop. Leaders need to remember to preserve the original culture so that everyone feels engaged while also creating a new culture that reflects the merger. These two perspectives do not have to be contradictory. Additionally, leaders need to realize that academic cultures in larger institutions tend to be heterogeneous; the culture in the college of engineering differs from the business school, which differs from the college of liberal arts. Leaders should not try to force the creation of a homogeneous institutional culture that has artificial parameters. 3 Recommendations for Higher Education Leaders Azziz suggested three take-aways for university presidents:  Consider mergers and acquisitions as part of the strategic planning process’s environmental scanning. This doesn’t mean that they have to merge or acquire. However, they will have taken the idea of the merger into consideration. Understand that the external environment is changing in a very rapid pace. Taking an approach that only focuses on incremental change will no longer work.  Bullet Points  Most institutional leaders do not have experience in leading mergers, nor are there a plethora of consultants who can assist in a merger. There are seven elements that are critical in leading a successful merger: Supportive and understanding board; the right kind of institutional leaders; a vision that encompasses and drives the merger so the university community sees itself as part of the merger; a sense of urgency so people understand why this needs to happen; a communications plan; a robust project management system; and resources. Mergers should be undertaken for improving student education, programs and experiences. The primary drivers should not be financial. The possibility of a merger should be considered in the environmental scanning portion of a strategic planning process. This enable institutional leaders to begin to think proactively about this process instead of reactively when it is forced onto them by top leaders or external factors. Institutional leaders need to adopt a transformational change mentality, which differs greatly from the incremental change that has traditionally been taken in higher education. Leaders also need to be aware of and take into account the revolutionary changes that are impacting the higher education sector. Clear, concise and consistent communication is key in the merger process. All leaders need to be on the same page and use the same wording. A project management team – whether internal or external – are invaluable since this team will consider the various complexities of a merger. Additional personnel and financial resources are needed in a merger. These are beyond what each merging institution brings to the table. Creating a vital common culture is critical in a merger. However, it’s important to maintain the previous institutional culture for a period of time as well as not attempt to create a homogenous institutional culture that doesn’t fit every college / department.  Links to Articles, Apps, or websites mentioned during the interview:  Ricardo Azziz  Strategic Mergers in Higher Education  Guests Social Media Links:  LinkedIn: https://www.linkedin.com/in/ricardo-azziz-0a8b0396/  The Change Leader’s Social Media Links:  LinkedIn: https://www.linkedin.com/in/drdrumm/ Twitter: @thechangeldr Email: podcast@changinghighered.com 

In the summer of 2011, conversations began with the Governor’s office about potential mergers. Toward the end of the year an announcement was made that four mergers would occur. This resulted in eight institutions being merged into four. The most complex merger involved Georgia Health Sciences University and Augusta State University, which created one larger and more comprehensive institution than either had been separately. The University System of Georgia has had waves of mergers. Therefore much of the planning for the merger that resulted in Augusta University was done by the board and the administrative level of the University System of Georgia. Dr. Ricardo Azziz was instrumental in implementing that merger. Azziz continues to analyze the process that was used to create this complex merger. He co-authored a 2017 report for the TIA Institute and a book, Strategic Mergers and Higher Education, published by John Hopkins Press. Higher Ed Mergers: A Leadership Challenge Higher education mergers tend to be tenuous for multiple reasons, the biggest reason being that most mergers are not planned in advance – few institutions take the time to proactively consider the aspects of mergers and appoint appropriately experienced leaders.  Additionally, most institutions don’t have access to consultants with this expertise. Azziz believes that many higher education leaders who guide a merger are not anxious to be part of another merger. At the time of the Augusta merger, there was little information available about how to execute a merger between universities. Institutional leaders had no roadmap – only theoretical research about completing mergers had been published at the time, so leaders were in some ways flying by the seat of their pants.  One thing that helped was that the University of Georgia system hired a consultant to help with the accreditation of those mergers, as it took something off the already overflowing plates of the merger team. Higher education leaders who are leading mergers make every effort to network with those who have guided these types of organizational change and/or use an experienced consultant to guide the process. This will help leaders access the many tools needed to be successful. Seven Essential Elements There are seven essential elements that need to be in place for a successful merger: <ol> <li>Supportive and understanding board</li> <li>The right kind of institutional leaders</li> <li>A vision that encompasses and drives the merger so the university community sees itself as part of the merger</li> <li>A sense of urgency so people understand why this needs to happen</li> <li>A communication plan</li> <li>A robust project management system</li> <li>Resources</li> </ol> Most institutions wait too long to begin the merger process. These institutions may be facing a number of serious challenges, including budgetary issues and/or declining enrollment. The University of Georgia System leadership and state leadership took a proactive approach before the eight institutions were seriously in trouble and had reached a point of no return. However, the system officials had difficulty injecting a new vision or a sense of urgency because much of the data regarding the institutional selections was kept at the system level. Reasons for Mergers There can be many reasons for mergers; first and foremost should be to preserve a tradition or programs for students. Therefore, it is important to bring a focus of what’s best for students and how best to develop a higher quality education, experiences and training for students. This is the right focus that creates both a sense of urgency and focus. Emphasizing financial gain as the primary factor in creating a merger is the wrong approach to creating a sense of urgency because a merger is going to cost money. In fact, there will be additional costs in finances and personnel since the mergers need their own staffing and finances beyond what is available in the two institutions that are merging. Success vs. Failure Success is not an exact term when talking about mergers, but the bottom line should be about the students. If leaders keep the students and the quality of their education, experiences, and programs at the forefront of the vision of the merger, it becomes easier to see how the creation of a larger institution can offer more programs for students as well as more sustainable programs than what each smaller institution could provide. Failures of mergers can mean different things. These failures can include the institutions remaining apart because the administrations never fully combined. Even in cases such as these, whereas some institutions fail at merging, they use the experience to rejuvenate because they are forced to examine themselves carefully. Strategic Planning Mergers are usually discounted (or not even considered) as part of an institution’s strategic plan, but they should be.  The American Quality Foundation and Ernst and Young published a study several years ago that looked across a number of different organizations in the U.S., Canada and Japan. The researchers analyzed what would create positive growth from a market capital perspective. There were three common findings which align with Azziz’s experiences in mergers: <ul> <li>Strategy with good implementation</li> <li>Business process improvement that is focused on the customer</li> <li>Depth and breadth of leadership management practices.</li> </ul> When building their institution’s strategic plan, it is important leaders and governing boards consider all options, including mergers, acquisitions and strategic alliances, in their planning process. This allows these concepts to be part of the lexicon and planning. Transformational Change Many mergers are coming as a result of revolutionary change in the higher education sector, such as some institutions offering free on-line courses or a life-long learning process that is cumulative. Higher education also is under significant pressure with societal changes, including technology, the need and ability of individuals to regularly expand their knowledge base as well as rapidly changing demographics.  Unfortunately, higher education as a whole tends to be more comfortable with incremental change, and its leaders must expand their understanding and in fact embrace transformational change in the form of a merger. Azziz believes that higher education leaders must now adopt a more proactive and transformational leadership approach to ensure that future students get the best quality of education (which may not – and probably will not -- be the same type of education as they receive today).  For example, the current generation of students are hesitant to seek higher degrees immediately – they want to go into the workforce and because they know they will be experiencing a number of jobs during their career, they know they need to take a continuous life-long learning approach to adapt and develop skills and knowledge that haven’t been developed yet. To successfully meet this challenge, higher education will have to adapt by creating different badging and certificate processes, using wider technology and embracing a more diverse range of learning materials. Higher education needs to respond more decisively and planfully in what is happening in the external environment, which is revolutionary. Meeting these challenges requires a visionary governing board and leaders. However, these boards often don’t embrace their strategic responsibilities in relation to the schools they lead – the experience of most boards and higher education institutions is one of times when change wasn’t as radical.  In addition, board members often come from different industries and may not understand what is happening in higher education and don’t take the time to educate themselves. Clear Communication One of the critical things in mergers is communications. It is important to have a comprehensive communications strategy with concise messages that allows all members of the leadership chain involved in the mergers to deliver the same messages consistently. You cannot over-communicate, but conflicting messages and wordings are extremely problematic, especially because in academics, words matter. Project Management Project management is essential for a successful merger. Like dominos, a merger needs to have the individual pieces fall in the right direction at the right time to be successful – there can be severe implications for the institution if something is not done in a timely manner. Azziz was fortunate to have an experienced internal project management team who understood the complexity of the transaction, including having the numerous groups from accreditors to financial institutions involved. This comprehensive approach helped smooth the merger process. He recommended that smaller institutions hire an external project management team if an institution does not have one in-house. Resources Mergers require additional resources, both financial and personnel, beyond the needs of operating the two separate institutions that will be merging. In the case of Augusta, they merged a health sciences institution with a liberal arts / masters institution. The health sciences center had resources that could be diverted to fund the merger, whereas the liberal arts institution had less resources to dedicate. Culture The culture of a university campus is special and recognized. It also can be very difficult to cultivate when doing a merger. It takes a long time for a new culture to develop. Leaders need to remember to preserve the original culture so that everyone feels engaged while also creating a new culture that reflects the merger. These two perspectives do not have to be contradictory. Additionally, leaders need to realize that academic cultures in larger institutions tend to be heterogeneous; the culture in the college of engineering differs from the business school, which differs from the college of liberal arts. Leaders should not try to force the creation of a homogeneous institutional culture that has artificial parameters. 3 Recommendations for Higher Education Leaders Azziz suggested three take-aways for university presidents: <ul> <li>Consider mergers and acquisitions as part of the strategic planning process’s environmental scanning. This doesn’t mean that they have to merge or acquire. However, they will have taken the idea of the merger into consideration.</li> <li>Understand that the external environment is changing in a very rapid pace. Taking an approach that only focuses on incremental change will no longer work.</li> </ul> Bullet Points <ul> <li>Most institutional leaders do not have experience in leading mergers, nor are there a plethora of consultants who can assist in a merger.</li> <li>There are seven elements that are critical in leading a successful merger: Supportive and understanding board; the right kind of institutional leaders; a vision that encompasses and drives the merger so the university community sees itself as part of the merger; a sense of urgency so people understand why this needs to happen; a communications plan; a robust project management system; and resources.</li> <li>Mergers should be undertaken for improving student education, programs and experiences. The primary drivers should not be financial.</li> <li>The possibility of a merger should be considered in the environmental scanning portion of a strategic planning process. This enable institutional leaders to begin to think proactively about this process instead of reactively when it is forced onto them by top leaders or external factors.</li> <li>Institutional leaders need to adopt a transformational change mentality, which differs greatly from the incremental change that has traditionally been taken in higher education.</li> <li>Leaders also need to be aware of and take into account the revolutionary changes that are impacting the higher education sector.</li> <li>Clear, concise and consistent communication is key in the merger process. All leaders need to be on the same page and use the same wording.</li> <li>A project management team – whether internal or external – are invaluable since this team will consider the various complexities of a merger.</li> <li>Additional personnel and financial resources are needed in a merger. These are beyond what each merging institution brings to the table.</li> <li>Creating a vital common culture is critical in a merger. However, it’s important to maintain the previous institutional culture for a period of time as well as not attempt to create a homogenous institutional culture that doesn’t fit every college / department.</li> </ul> Links to Articles, Apps, or websites mentioned during the interview: <ul> <li><a href="https://en.wikipedia.org/wiki/Ricardo_Azziz" rel="nofollow" target="_blank">Ricardo Azziz</a></li> <li><a href="https://www.amazon.com/Strategic-Mergers-Higher-Education-Ricardo/dp/1421432609" rel="nofollow" target="_blank"> Strategic Mergers in Higher Education</a></li> </ul> Guests Social Media Links: <ul> <li>LinkedIn: <a href="https://www.linkedin.com/in/ricardo-azziz-0a8b0396/" rel="nofollow" target="_blank">https://www.linkedin.com/in/ricardo-azziz-0a8b0396/</a></li> </ul> The Change Leader’s Social Media Links: <ul> <li>LinkedIn: <a href="https://www.linkedin.com/in/drdrumm/" rel="nofollow" target="_blank">https://www.linkedin.com/in/drdrumm/</a></li> <li>Twitter: @thechangeldr</li> <li>Email: <a href="mailto:podcast@changinghighered.com">podcast@changinghighered.com</a></li> </ul>

Mergers and Alliances with Ricardo Azziz | Changing Higher Ed 031

Ricardo Azziz is one of the preeminent PCOS researchers in the world today.  It was an honor to speak with him this month. Prior to the interview, I asked Divas on Facebook to send me their questions.  I had over 200 submissions!   Listen in to hear our discussion and his answers to some of your burning questions.

8 - PCOS Expert Dr. Ricardo Azziz Answers Your Questions