Posted Oct. 28 2015, 05:53:12 pm

Mihaela Grad

Vice President

Stakeholder engagement is key to strengthening a university’s reputation and managing risk. Higher education institutions operate in a complex universe of stakeholders. On one hand, they must meet the needs of their most immediate constituents: students, faculty and staff. On the other hand, in order to maintain consistent enrollment, they must connect with prospective students, parents and high school counselors. Last, but not least, as entities that largely depend on external funding, they have to be aligned with their boards, private funding institutions, state legislators and industry partners.

These groups’ interests often differ and universities must work hard to cultivate productive and fruitful relationships with each group. For example, cost-cutting measures can cause anxiety among faculty and staff, while increases in tuition are likely to drive away cost-sensitive prospective students.

This year presented a fascinating case of a university’s entire existence being directly impacted by its stakeholders. In the spring of 2015, the administration of Sweet Briar College, a women-only college located in Virginia, announced that the institution will close its doors after 114 years. Among the reasons for the decision were declining enrollment and the lack of sustainability of the discounted tuition model the school had been relying on for many years.

The announcement caused shockwaves among the school’s stakeholders. Faculty found out they would not have a job the next calendar year, and students had to make difficult decisions about transferring to other schools. The strongest and, to some degree, most unexpected response came from Sweet Briar’s alumni community, who mobilized around a campaign to raise $20 million to save the college.

Interestingly, the alumni gesture was a result of anger and disillusionment with their alma mater’s administration. They felt that the decision about the closure should not have come as a surprise and promptly sprang into action.

In a matter of months, Sweet Briar changed its administration and board; and thanks to a significant infusion of cash contributed by alumni, reached a reprieve for at least another year. The long-term future of Sweet Briar, as well as many other small single-sex colleges in America, is still under question as expectations for liberal arts education change.

Sweet Briar’s example highlighted several barriers to successful stakeholder engagement:

  1. Assumptions – Sweet Briar’s former administrations assumed that their decision to close the institution would be understood by their stakeholders. While they most likely expected a strong reaction from faculty, staff and students, they probably underestimated the attitudes of alumni. It is important for organizations to invest the time to understand the interests and attitudes of all their stakeholders so they can determine the most effective ways to engage with them. Through effective stakeholder engagement, organizations can better achieve their business goals and protect their reputation.
  2. Exclusions – Some organizations view engaging with non-supportive stakeholders as a risk. In Sweet Briar’s case, the alumni community felt excluded from the decision to close the college, prompting them to mobilize. While engaging with groups who may have different positions can be intimidating, learning about their concerns and reservations can help organizations build a broader base of support for their strategies.

In order to secure its future, Sweet Briar will have to switch from survival mode to growth mode. This will require a comprehensive stakeholder engagement effort to determine how to stay relevant to the many groups it serves in a fast-changing world.

For more information about how to successfully identify and engage your organization’s stakeholders, download our new white paper, “Authentic Stakeholder Engagement: Essential to Strengthening Reputation and Managing Risk.”

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