|
Going Abroad to Stay
Home
A Business Model Under
stress
There is no denying the
fact that major private
universities in Lebanon,
as indeed elsewhere,
have to find their way
into sustainability
sooner rather than
later. Nearly four years
of crisis have taught us
valuable lessons of
experience in the
dynamics of survival.
Perhaps the major lesson
is that in order to
remain true to our
mission we have to
identify and tap new
revenue streams. If
there ever was a day
when tuition fees were
enough to keep major
universities running,
that day is well past
us. In fact, our shared
current business model
was perhaps fit for a
small Liberal Arts
College but will
certainly fall short of
meeting the requirements
of a major comprehensive
university with several
professional schools.
It is important to point
out that the issue runs
deeper than just a
business model to cover
operational costs and
ensure solvency. It
forces us to ask the key
question: What kind of
university do we want to
be? If the answer is a
major comprehensive
research-active,
innovative, world-class
institution then the
current business model
will undoubtedly be
found wanting. It will
certainly fail the acid
test of sustainability.
If this is true across
the board the world
over, it is even more so
in crisis-ridden Lebanon
where the higher
education sector had to
bear the brunt of a
total collapse. It is at
the moment in a deep
crisis far graver than
anything it has
encountered during past
Lebanese wars and
crises.
The
Sustainability
Factor
Though quite fashionable
today, “sustainability”
is often not understood
as thoroughly as it
should be. It surely
should not be limited to
meeting operational
expenses as we also have
capital and growth
expenses linked to
global positioning.
These include research,
physical and academic
infrastructure,
necessary expansion, and
certainly innovation
needed to be fit for a
future that is unfolding
at a dazzling rate.
Sustainability means,
first and foremost,
building immunity
against existential
crises that threaten the
very being of academic
and healthcare
institutions.
Elements of the New
Business Model
The situation outlined
above affects major
private universities at
the international level.
In the US, some leading
universities have a
strategy of becoming
totally non-dependent on
tuition revenue. They
plan on meeting the
entirety of their
financial needs through
endowment proceeds,
fundraising, grants,
patents and IP rights.
Pressed by the worsening
crisis, major private
non-profit universities
in Lebanon have no
choice other than to
start a process of
changing their business
model which is
tuition-driven and no
longer tenable. The new
business model should
have three key
characteristics:
-
Diversification
in the sense of
providing
multiple sources
of revenue to
lessen
dependence on
any one single
source,
particularly
tuition fees.
-
Stability i.e.
making it as
much as possible
minimally
vulnerable to
crises and
susceptible to
major and abrupt
fluctuations.
-
“Benchmarkability”
in the sense of
comparing to
best practices
followed by
leading
international
private
universities in
the American
tradition.
As such, the alternative
business model we are
seeking should have
specific revenue streams
namely: tuition fees
with a declining
percentage, grants with
an increasing
percentage, fundraising
also with an increasing
percentage, and
endowment proceeds based
on a properly managed
investment portfolio
that is as least
risk-exposed as
possible. It should also
aim at generating new
streams linked to
patents, IP rights and
R&D work.
How
Can the Alternative
Business Model
Emerge?
Transitioning from the
current to the needed
business model is bound
to be challenging and
not risk-free. It
involves serious work at
three interrelated
levels:
-
Governance
involving BOT
policies,
strategic
options, and
difficult
decisions made
at the highest
levels, whose
full impact will
take time to
become apparent.
-
Executive
involving the
President and
his/her
immediate
assistants in
working out
strategies,
models,
allocation
percentages,
needed
structural
changes, and
budget
architecture.
-
Managerial
involving details of
operational
procedures and
systems to make the
new model workable.
Some of the work
needed at this level
involves offices
that not all
universities have:
Advancement, Grants
and Contracts,
Business Development
and IP and
Technology transfer.
Some of these
functions can
involve incubators,
accelerators, and
industrial
parks.
-
Beyond these
three levels,
the new business
model needs
capacity
building
and acquisition
of additional
expertise in
several new
areas
including:
-
Grantsmanship
-
Fundraising
-
Business
Development
-
Industry
Interface
-
Effective
Networking
-
Commissioned
Studies
-
Case and
Translational
Research
-
R&D Work
-
Patents and
IP Rights
LAU
Plans Its Leap
Forward
LAU is determined not to
be derailed by the
crisis, severe as its
impact was and continues
to be. Our mission is
the pursuit and
achievement of academic
and professional
excellence at a
state-of-the-art level.
To be sure, the crisis
has had its toll, but we
are now in the process
of putting it behind us
through a number of
measures. Primary among
them is rethinking our
business model to make
it less dependent on
tuition revenue. Our
students and their
families have counted on
us for a century to
stand by them as a
source of affordable
quality higher
education, and more
recently, advanced
medical care. This trust
is for us a source of
inspiration we cherish.
It is in equal measure,
the source of a sense of
responsibility that has
a defining influence on
us. The effect of the
two factors combined is
to propel us toward a
situation where tuition
fees would be less of a
burden on families and
higher education will be
accessible to greater
numbers.
For these reasons and
many more, we want to
continue to be the
bulwark institution our
local society can count
on come what may. To do
so, we need to rethink
our business model as
suggested earlier and
tap business development
opportunities outside
Lebanon. This will be
necessary to bolster our
position in Lebanon,
help more students, and
assist more patients.
The more fresh dollar
earnings we can
repatriate back to
Lebanon, the stronger
our safety net will be.
It is as simple as that.
LAU Without Borders
The practical way of
translating our position
to reality on the ground
is adopting a policy of
“LAU Without Borders.”
This was a major pillar
of our third strategic
plan (SPIII) and still
is a pillar in our SPIV.
We have gone a long way
toward studying
different possible
campus venues in several
MENA countries. A
decision has already
been taken in favor of a
venue in the region. The
result will be another
LAU campus outside
Lebanon to join our
existing campus network
in Beirut, Byblos and
New York in addition to
the two medical centers
in Beirut and Jounieh.
Our regional campus
outside Lebanon will be
an assertion of
Lebanon’s regional
educational leadership,
a statement about LAU’s
educational and
healthcare prominence,
and a monument to our
dedication to this part
of the world.
It is also expected to
be a step toward freeing
ourselves from the
constraints of the
current business model.
It should generate a
revenue stream that will
be very helpful in
funding our future
growth and increased
responsibilities at
home. This means
enhancing our ability to
serve more students and
patients and to serve
them better.
The
Future is
Beckoning
The causal link is
crystal clear. No future
for quality higher
education in Lebanon
without a different
business model, and no
different business model
without a new
configuration of revenue
streams. New revenue
streams translate to
enhanced sustainability
which is what we need
for serving our local
community better. Going
abroad is now for us a
prerequisite for doing a
better job at home.
Spreading our wings
ensures our ability to
come back to a better
nest. The future is
beckoning, and we are
well on our way.
|