1. The Board of Trustees and senior management must not only be aligned on the plans, goals and objectives of a turnaround, but also be aligned on their respective governance and management roles. The board holds a significant fiduciary responsibility for the future of the institution, yet it must rely on the President and the management team to execute on the plan. Communication, support and coordination between governance and management is one key to success. The buck stops with the board.

2. Turnaround analysis should start with the most recent audit report for a few reasons. One, the audit report summarizes all revenue, expenses, cash flow, assets, liabilities and equity, all of which are key financial metrics in a turnaround. Two, it’s the financial report by which others measure us. That includes our lenders, our accreditors and government agencies. Three, it helps us direct our “deep dive” into the numbers and can be used to establish targets and goals for improvement. And four, it can provide a basis for comparison with other peer and aspirant group institutions. (But just a caution on comparative averages. While it’s helpful to compare ourselves with others using “industry averages” they have limitations especially in an inefficient industry, so strive to look for “best in class” averages as we formalize targets).

3. Get granular and determine surpluses, deficits, fixed costs and variable costs in each major academic program, auxiliary enterprise and all academic and nonacademic departments. This is not easy work as institutional systems don’t often categorize information in this fashion. This will involve estimates, allocations and judgements and there are specific models available in the industry to build the proper framework. There will also be significant items not clearly classified on the audit report, such as deferred physical facility maintenance and deferred technology spending that must also be further analyzed and estimated. The goal here is to take raw financial and operating data and convert it to timely, useful and actionable financial information.

4. Use internal or external legal counsel to thoroughly review all governance documents, faculty and employment agreements and contracts, major institutional contracts and other relevant legal documents. Turnarounds often require negotiation and the potential restructuring of existing legal commitments, some more significantly challenging than others. Legal counsel is critical to the success of a turnaround and attorneys are often well trained and experienced in the difficult negotiations that may be at hand. We also may initiate new new programs and capital projects and need to understand how our shared governance model may impact these decisions.

5. With the proper board structure and support, financial and operational goals developed and an understanding of our legal responsibilities and rights, we’re positioned to begin to make the difficult decisions. Those may involve program and staffing reductions, the sale or repurposing of college assets, significant changes in the way we operate or additional capital investment. It’s critical to have the right support team in place. Higher ed operates under the principles of a shared governance model and representatives from various constituencies are often involved in the dialogue, analysis and recommendations. But remember, in most cases the final decisions rest with the senior most governing authority – the Board of Trustees who have a fiduciary responsibility for the long term health of the institution. Open and honest dialogue with all responsible constituencies is critical.

6. While financial challenges are often the motivating factor for a turnaround, remember turnarounds require money. There’s typically additional professional services required, and a turnaround isn’t always about cutting costs. It’s also about reallocation and the investment of capital. As an example, in support of its continuing turnaround efforts, Albright College’s board has approved a loan of fifteen million dollars from its endowment to “strengthen the College, enhance enrollment, and secure Albright’s future.” (Ben Unglesbee, Senior Reporter, HIGHER ED DIVE, August 27, 2025). New or strengthened sources of capital are often necessary to support turn around efforts.

7. I once listed to Michael Porter from the Harvard Business School speak about strategy as “breaking compromises”. I found the thought intriguing and as it applies to higher ed, for decades our “compromise” with our students was simple. We build buildings, we hire faculty and they teach, the students learns. It was that way for years and remains so at many schools today. Yet in 1976, John Sperling and John Murphy founded the University of Phoenix. At first the change in compromise was simple. They rented branch campuses rather than build buildings, hired part time faculty and they taught and students learned. But as the internet and technology developed, they fully changed the compromise with students. They built classes with technology, hired part-time faculty and students learned from anywhere. It was the strategic compromise that allowed opportunistic schools like SNHU to capitalize and build online enrollment into the hundred of thousands and grow from a small, regional independent college with limited finances to a national online powerhouse. Think carefully as you navigate the waters of a turnaround. Examine your compromises with everyone. You’ll need to do things differently.

8. And a final thought. Remember a turnaround is 180 degrees, not 360 degrees. I’ve witnessed schools and private business execute great turnarounds, only to be back in difficult times a few years into the future. Turnaround efforts need to be long-lasting, flexible and generative.