Would Marcus Lemonis of The Profit Pass on Investing in Your Alma Mater or the College For Which You Work?

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The question Marcus might pose is, “Who is your college’s customer: the student who pays tuition, or the company that hires that student?”

marcus lemonis smallEvery business has a culture that either propels the organization and its people to greater heights– or ends up destroying the company, along with the jobs and the lives of the founders and investors.

Although my wife does not have an interest in starting a business, she has become a huge fan of Marcus Lemonis, a successful entrepreneur and host of the hot TV series The Profit.  Marcus has received inquiries from more than 40,000 small business owners who are struggling with the various skills and funding sources one must have to run a business.  They know if Marcus gets involved with their companies – they’ll get an infusion of both!

At nearly every business Marcus visits, he finds a culture that is either dysfunctional or out of touch with its customer base.   If the business owner is willing to listen to the advice he gives and implement his suggestions, Marcus will invest up to a million dollars – or in some cases– even more.  To many companies, his advice and direction is even MORE important than his financial commitment.  While his goal is to make money, one of the key reasons he gets involved with small business owners is to protect jobs.

Once on board, Marcus brings in the best minds he can find in finance, operations, data analytics, and consumer behavior, and helps to re-engineer, refocus, and reboot the company systems, procedures, and culture.  He reminds business owners to focus on inventory control, and to re-evaluate the product, the quality and the competition, as well as to know their numbers and, most importantly, to listen to their customers.

It’s fun for members of the audience to see the effects he can make on a business within a 60-minute show.  I have to imagine it is tremendously painful for the business owners, their employees, and Marcus to struggle through the process of making the changes that are needed to protect jobs, their customer bases, and the lives of the companies themselves.

Business owners are entrepreneurial, hardworking, committed people who in nearly all cases have bootstrapped their organizations from the ground up.  Their single-minded visions and stubbornness are the primary reasons that small businesses survive.  However, the same personality traits and drives can also lead to a company’s downfall.  This can be especially true if the entrepreneur begins to believe that the way he or she is doing business is the only way to do business.

From watching numerous episodes with my wife, I sense that Marcus has a great deal of respect for what the entrepreneurs have accomplished, but he also can see what needs to be fixed and or changed if their companies are going to survive.

So enough background on the show:  You’re probably wondering how that relates to your alma mater, or the college you work for…

Is your alma mater’s future at risk?

Author Nathan Harden estimates that in 50 years, half of the approximately 4,500 colleges and universities in the U.S. will go belly-up.   According to Harden, the emerging pressures colleges are experiencing– virtual classrooms, lectures through streaming videos and online exams– will proliferate on a much larger scale and disrupt the higher education system as we know it.  In an era where software like Siri and Cortana are replacing white collar jobs, there is a risk that over the next ten years the economy will not need the 3 million US graduates, nor the tens of millions produced in universities around the world.  There could be a point where the escalating price of an education will not support the current fact that it pays off in the end.

Mark Cuban has compared the higher education system in the U.S. to the newspaper industry, and Harvard Business professor Clayton Christensen predicts, “wholesale bankruptcies” among standard universities over the next decade due to online technologies.

With jobs, reputations, and alumni support at risk if this happens, I started wondering what Marcus would think if a college came to him and asked him for advice about how it could gain control of the multiple forces that are threatening its survival.

What would Marcus think about the higher education industry?

First of all, I think that Marcus would like the fact that it only cost between $3,000 to $3,500 for a private college to land a client that has the potential of spending $150,000 or more on campus related revenue areas– books, fees, tuition, room and board, etc.  For most businesses, the cost to acquire a customer can be much more than the initial cost of the product itself.

However, that’s where his positive impression would end.

When he stepped on campus to dig in to see where he could help control costs, and realign products and services, he would very likely run into challenges that would really tax his entrepreneurial savvy and business acumen.

The first thing Marcus would be sure to find is that the college is not focused on the customer’s needs, but it seems to be more focused on its administration, faculty, operational, capital and fundraising needs. If the college is like most, he will not like the fact that administrative positions rose 369 percent (AAUP report) between 1978 and 2014 and full-time faculty increased just 23 percent.

I imagine one of his first questions to the executive team might be something like,

“Who is your customer?”

After spending some time on campus, he might privately be thinking that the college culture behaves as if the faculty is the focal point of that culture, but he would patiently listen as the executive team collectively suggests that students are –of course– their number one focus on campus.

It seems like Marcus is always one step ahead of his business partners, so he might respond with something like,

“What do you think about the companies that hire your students?”

Not giving the executive team time to respond, I could imagine Marcus would suggest that if he were going to invest in the college that it would have to change its focus and begin paying more attention to the companies that hire its students.  To drill in his point, Marcus might say something like:

“The way I look at your business is that your students are your product.  It’s what you produce.  Based on the Higher Education Research Institute’s annual Freshman Survey, 86 percent of students are going to college to better their employability.  They are attending your college because they are entrusting you to hone their skills and give them the knowledge they need to launch and lead successful careers. They are not attending your college to become better citizens or learn how to volunteer. They are attending your college because they EXPECT to launch and lead successful careers. If you are with me on that, then –from my perspective– the companies that hire your product are your customers!”

In order to emphasize this point, his expert might share the following information:

  • Research and a subsequent report by Maguire Associates & Chronicle of Higher Education (What Do Presidents Think?) found that more than 80 percent of college presidents think they are doing well in providing academic programs to meet economic needs. However, more than 60 percent of employers say they find it difficult or very difficult finding qualified candidates to fill jobs.
  • In another report, the Accrediting Council for Independent Colleges and Schools showed that 39% of business leaders say colleges do an “only fair” or “poor” job of preparing students for their business careers.

After some heated debate, Marcus might follow up by suggesting that the college needs a plan to get out and to listen to what the customers (organizations that hire their graduates) think about the preparedness of their graduates (product) and to ask if there is anything the college can do better to improve its product.

Without leaving room for more debate, Marcus might move the group on to another issue that his research team has uncovered:

“If you agree with my assessment that your students are your product, let’s discuss what kind of investment you are making in them to improve their overall quality.  Our research is showing that your peer institutions over the past seven years have cut the career center budget by an average of 22 percent.   Can anyone here tell me what we’ve done here?”

Marcus’s expert would chime in with some data and facts for the executive team to think about.  He’ll say that his initial discussion with the career center director suggests they have made arbitrary cuts based on the budget and revenue, with a guess that it is about 25 percent.   The expert will remind the executive team that the job search process has significantly changed in the past seven years.  Graduates, as well as alumni, need to know how to adapt to building a series of online presences that amplify their skills, experience, and knowledge.  They need to know how to create keyword-laden resumes, build LinkedIn profiles, clean up their Facebook pages, and use other social media tools like Twitter.

Marcus might ask the team to raise their hands to see how many have changed jobs in the past seven years.   No one will raise his or her hand.

He then says:

“Folks, it appears you are completely out of touch with the realities of the issues and pains your customers are facing in today’s employment and business market. The job search process has been totally transformed in the past seven years.”

He continues:

“Let me ask you this?  What discussions, taskforce, departmental changes, and/or strategies have you implemented to show our customer base that we are listening to them and – as a valued partner – leverage the enormous resources we have to take an active role in their success?”

The room was silent.

Marcus would probably go on to suggest that we have a great deal at risk if our product does not make a fantastic first impression and he will emphasize the risks we are facing.  I can sense he’d be building up to make a point that enrollment, reputation, graduation rate, student, employer and alumni satisfaction, as well as contributions are at risk.

To give himself a minute to cool down, I can see him turn to his expert to share a few more facts.

The expert will likely cite a number of research reports that show graduating seniors are failing miserably at the job search process.

According to the Career Advisory Board:

  • Nearly 57 percent of career center directors did not think their graduates’ resumes were at the level they needed to be to start their job searches.
  • Over 50 percent of the same career center directors did not think graduates were ready for their first professional job searches.

The expert reminds the group that this was a survey of career center directors.  He suggests that these facts to show there must be a tremendous moral problem in the career center.  He asked everyone to raise their hands if they had a conversation with a neighbor, friend, relative or business associate about career centers.  The expert suggested in every conversation he has had the career center gets blamed for not doing anything to help graduates launch their careers.  He suggested this is entirely unfair and creates a stressful situation for career professionals and its not a situation the career center could control on its own.  Case in point: A study by NACE found out that over 61 percent of graduating seniors either NEVER went to the career center or only visited once or twice.

Marcus, catching his breath, steps back in.

“You see, I don’t see this as the fault of the Career Center, it’s a problem that we all share.  Folks our culture is focused on everything BUT careers.”

Marcus continues,

 “How good do you think our product looks to our customer base – based on this information? Could we have a strategic advantage if we rebooted our campus culture and focused on careers so that we could give our students the knowledge, soft skills, and critical thinking that the businesses that are hiring them expect?”

In the moments of silence that would certainly follow, the expert might say that this has a couple of ramifications.  He’d go on to make the following points:

  • If our customers (hiring authorities) see too many ill-prepared resumes and graduates who have little to no interviewing skills, they could potentially overlook future graduates from our institution. That could be one reason the average grad will take 7.4 months to find a job.
  • A study by the John J. Heldrich Center for Workforce Development found that 58 percent of graduates felt their alma maters did not prepare them for their first professional job searches.

“Do you realize the ramifications of these facts,” he’ll ask?  

When there’s no response, he’ll continue.

“This is already affecting our reputation, enrollment, customer satisfaction, and contributions.  Life has been easy to this point, but we are going to be facing market forces that will require us to fight for every student and contribution we can get. 

If we do not do something to help graduates get jobs faster, get jobs relevant to their careers, and stay with them to help them throughout their careers utilizing our vast network of alumni and leveraging our enormous campus assets, we are doomed! You cannot stay in business when studies like the Heldrich research shows 58 percent of our graduates think we took their money and did not support their number one reason they went to college!”

Let me repeat!

This is going to affect our revenue and contributions.   Graduates that are not happy are not going to engage in the alumni association, will not HIGHLY recommend our college, and will potentially have stunted careers that will not provide them the resources they could achieve to support our giving programs.

Marcus will continue with a question:

Have you heard of Richard Bolles, the author of the book, What Color is Your Parachute?

“Richard Bolles said something that I’d like to make a credo that infects every department and person on this campus.  He said something that is so powerful, so simple and yet so on the mark that it should find its way into our mission, vision, and goals.  

Richard said,

̔A working alum is a giving alum.’

Think about that! 

If we make a small investment or rearrangement in where we invest our resources, so we help students prepare for their careers, develop career plans, and launch successful careers– as well as support alumni through the transitions of their careers– we will not only give them the ability to support our scholarship, annual giving, and capital campaigns, but their positive experiences will drive our enrollment too!”

One member of the executive team at this point would interject,

“What you are suggesting is going to require the entire campus community, faculty, staff, parents, departments, alumni, and even hiring authorities to buy into this.  I see some roadblocks ahead.”

Looking askance and rolling his eyes, Marcus pauses and then fires back with,

“Let me ask you this.  What are the risks if we do nothing?

Folks we have to address the elephant in the room and do something. What are you doing to make sure your faculty, staff, alumni, hiring authorities, parents, and –yes– students are focused on exploring career opportunities, career planning, and career exploration while they are on campus– or after they graduate for that matter?  

Go with me for a few minutes and share with me what you are doing to:

  1. Reduce the average of 7.4 months it takes students to get a job? (NACE)
  2. Reach the 61 percent of graduating seniors who either NEVER go to the career center or only visit once or twice their senior year? (NACE)
  3. Change the average career counselor to student ration of 1 to 1,650? (NACE)
  4. Change the fact that 56.7 percent of career center directors do not think graduates resumes are ready for prime time OR, that over 50 percent don’t think graduates are ready for their first professional job searches? (CAB)
  5. Help the 53.6 percent of grads who are under 25 that are either underemployed or unemployed? (AP, New York Federal Reserve)

Realizing the executive team is pensive, Marcus might continue with something like:

“From my perspective, Mr. President, your culture is broken. 

It’s served you well for decades– if not a century– but times are different today.  Not only are you not focusing on who your customers are, but your culture is totally out of date and no longer relevant in the times.  Your campus, like those with which you compete, is still living in a Leave it to Beaver era when there was one car in the driveway, one phone on the kitchen wall, and a black and white TV with rabbit ears in the living room.  Your customer base and their behaviors have changed.  Sure, the traditions and activities you have developed over the decades are great and have become a part of the fabric of campus and culture, but is any of that helping your students achieve what they are here for?   Does any of this provide the skills, knowledge, or experience they need to handle the requirements employers will be looking for on day one of their jobs?”

Continuing his rant, Marcus might take the conversation to the next level.“ 

“…and Mr. President, what are we doing to support alumni success?  Speaking of living in the Leave It to Beaver era, do you think your alumni are facing a new reality today?  What has your college– or more importantly your alumni association– done to change up the product and services mix for them? Are we offering relevant services and support or are we continuing our decades-old strategy of laying a guilt trip on them that they owe their success to the college?

 Let me ask you this, “Are you familiar with the Alumni Attitude Study or the Olson Zaltman Study, What do Alumni Want From their Undergraduate Alma Maters?”

Marcus asks the group.

“Are you aware:

  • That research by the Alumni Attitude Study found that at nearly every college that participated in a broad survey of alumni attitudes found the number one thing alumni felt their colleges failed to deliver on was career support while they were in college and after they left?
  • Of a survey by the John J Heldrich Center for Workforce Development that found 58 percent of college graduates did not think their career centers had prepared them for their first professional job searches?

To me, this is evidence that we are not listening to the needs or the pain our customers are facing.  That goes for students, grads, alumni, and employers.”

To wrap up his day on campus, Marcus will challenge the group to quickly mobilize a taskforce that will involve all constituents both on- and off-campus and to come up with a strategy to reboot the culture on campus to support careers.  He also gave them an assignment to talk to neighbors, friends, relatives and anyone they meet that went to college and ask them what their opinion of how their college and it’s career center has supported their careers.

In his parting bit of advice, he suggests that they put themselves in the shoes of their customer base by first listening to their complaints, their needs, and what roles they would like to play in transforming the culture on campus to focus on what their customers’ needs are.

Did you make it this far?

If you made it this far with me, it shows you are concerned about the issues your customers are facing.

Lao Tzu said,

“If you do not change direction you may end up where you are heading.”

If you are concerned about the direction your college or alma mater is heading, and the issues your culture and strategies are creating for employers, students, grads, and alumni, I encourage you to ask the tough questions Marcus Lemonis would ask of your faculty, administrators, and top management! If you don’t, your college is likely to end up where experts are predicting, a place you do not want it to be.

CLICK HERE  TO JOIN A GROUP OF PEERS WHO ARE DEVELOPING STRATEGIES TO CREATE A CAREER-CENTERED COLLEGE CAMPUS!

 

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Don Philabaum
Love to find ways to use technology help more grads and alumni develop successful career strategies.
Don Philabaum
Don Philabaum
Don Philabaum

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