Mindful of increased competition in higher education and changing appetites for business education, Stefanie Lenway concluded that the University of St. Thomas business school needed a makeover.
The dean of Opus College of Business since 2014, Lenway unveiled a plan in February that shakes up the organizational structure, places a heavier emphasis on technology and online courses, and offers “stackable credentials” in popular areas such as business analytics.
Lenway also is phasing out the full-time MBA degree program, because of dwindling enrollment, but the school will retain four other MBA offerings. St. Thomas is not alone in seeing diminished interest in MBAs. Across the United States, applications for MBA programs have declined for five consecutive years.
A resolute and reflective Lenway met with Twin Cities Business for an interview in mid-March in her office suite on the Minneapolis campus. It was a somber day for Lenway, because she and other University of St. Thomas leaders had just decided to shift their students to online learning because of the coronavirus threat.
Nevertheless, Lenway struck an optimistic tone about the capacity of St. Thomas to educate students from a digital platform. She also explained how and why St. Thomas will pursue a new business school strategy.
“If you think about the world that the MBA was designed to address, there’s not that much of that world that’s left.”
Q | At the Opus College, you recently revealed your restructuring plan that will take effect July 1. What were the two chief problems or challenges you were trying to address?
A | One is the decline in demand for some of our programs, especially full-time programs where students are in class full time to complete their degree. One program being cut is the full-time MBA, which was 18 months. We went from 24 to 18 months to try to get students through more quickly. That attracted more students temporarily, but then we just watched enrollments go down.
I want to emphasize that this wasn’t related to quality. Our students have been snapped up in both programs that are being eliminated, the full-time MBA and the master’s in accountancy. Ninety-plus percent are employed immediately.
The factors are partly demographic, partly visas for international students, and partly there just are a lot more choices for how to get a business degree.
Q | What about a second major challenge?
A | The cost of higher ed. We have to bring it down. We had to rationalize some of the internal teams we have at Opus, specifically external relations, career services, and alumni relations. We had to move that capability to the central university. But I think the increasingly unsustainable cost of higher education is a huge issue.
Q | What are the biggest changes you are making in your business program offerings?
A | Let me talk first about what’s going to stay the same. We have four MBA programs, so the MBA is not going away. We’re offering different delivery models to different demographics. We have an online MBA, and it is preceded by a three-day residency, but basically you can take the whole degree online. It’s designed that way.
We have a part-time flex MBA, which is partly face-to-face, partly online, very flexible, and you can customize it to whatever it is you want to specialize in, or be a generalist. We have an executive MBA for more senior students. It’s a cohort program, and they learn a lot from each other. There are colleagues in other sectors of the economy. And we have a health care MBA for people in health care who need to learn about business.
What is fairly new is the master’s in business analytics. We went from zero to 200 students in two years in the area of analytics. We just have been given authorization by the university to hire two new tenure-track faculty in analytics, which shows that the university is willing to invest in growth areas.
Q | I assume business analytics is an example of how the marketplace has changed for business education.
A | Right. Also, we are offering a joint program with the School of Engineering. If people want to learn some coding or take data science courses, they can, and that will count toward their degree in business.
Q | If you had to crystallize the changes, will there be more courses offered online? Are you pumping up certain programs? What are the key substantive changes we’ll be seeing?
A | First of all, we have to respond to what the students need. What we see that they need are shorter, more focused, and more online programs. These are the signals we are getting, and it is not just us. It is really across the country.
What we are looking to build is a portfolio of certificates that can stack to degrees. [The certificates] are either a third or a half of a degree. Twelve credits times three, and you’d get the right stack and you’d get a master’s degree.
The business world, business processes, are changing so quickly that we have to be flexible. This is challenging to the faculty because there is a legacy of fine-tuning a course and sticking with it for a while. The first flexibility is going to come from bundling existing courses. We also have a very successful program of matching professionals with professors. Professors teach the theoretical piece and the professionals talk about the application. So we have innovative teaching partnerships.
Q | Can you offer an example of how someone might take stackable certificate courses and later decide to pursue a master’s degree?
A | For instance, we have a master’s in health care innovation. What we could do is have a certificate in innovation, in design thinking, strategy, entrepreneurship, and maybe some type of agile operations. That would be a certificate in innovation, and then we could have another certificate in health care management. That covers health care policy, health care finance, health care operations, and maybe a capstone experience where you do a project.
Instead of having one degree, we take these two certificates. A student who chooses to complete both of them, with the right approvals, we could create a new master’s in health care innovation. It might be more useful [for some students] than the one we have now.
Q | You became the St. Thomas business dean in 2014. When you think about the market demands for business education, what are the most dramatic changes you’ve seen in what companies and students want in master’s level programming?
A | First of all, I think the demand for online is going up. People are busy, traffic is bad. It’s hard for students to show up unless you are in the skyway.
Q | You seem to be saying that it now takes much longer to get to downtown Minneapolis for a St. Thomas course if you are trying to drive in from a big company in the suburbs. What are people saying about time-consuming commutes?
A | “I want the flexibility.”
Q | Is it also the case that because of their job demands it’s difficult for many people to leave work at a given time to get to a class?
A | Yes, and they travel for work domestically and internationally. Or they used to, and they hopefully will again [after the coronavirus pandemic has been addressed].
Q | Does that mean large volumes of business students commuting from work to school was a good model 10 or 15 years ago but it is not practical now?
A | Yes. We don’t have the transportation infrastructure to get people here anymore. The other thing is people graduated in 2008, ’09, and ’10 in a down market and have a lot of student debt. Their ability to take on another student loan payment is compromised seriously.
When I was at the [University of Minnesota’s] Carlson School [of Management], which admittedly was almost 20 years ago, we could assume somebody could take out a home equity loan if they wanted an MBA. And they’d get a raise and they’d pay it back. We could advise that in good conscience.
The pool of students we recruit from are mainly those who completed their bachelor’s degrees about 10 years ago. They are in their early 30s. Those students just can’t afford to pay for a master’s degree. They want to do it, so we need to find other products for them that they can afford.
Q | Where do their employers fit into this funding mix? A few years ago, you told me that post-recession companies were providing a smaller subsidy to help students get their MBAs.
A | There’s been a decline in employers who pay for the MBA. We used to have large corporations who would pay the whole cost for high-potential employees. Now there is a federal government policy that says companies can give about $5,000, which is not taxable as an education benefit.
It’s rare to find a fully funded student. I think that’s because there is so much mobility among employees. They don’t stay, so companies don’t necessarily see the return [on paying for an MBA].
Q | Across the nation, St. Thomas and other schools have seen a decline in applications for MBA degree programs. Ten or 20 years ago, was the MBA a passport to a certain level of leadership in a major corporation? Have the benefits that have historically flowed from an MBA degree been diminishing?
A | What it might be is business is changing so quickly that in the beginning of your career, you need more technical skills. So you might want a certificate in business analytics or digital marketing, something quite specific.
As you build your career, you might want more general management education, leadership, strategy, and competitive analysis. What the MBA does is bundle all of that together. Because things are changing so quickly, we might have to separate the technical part, which is the core, from the more general management piece and leadership. You still need both, the question is how you package it.
Q | Is it possible to expand the time frame in which a student can stack these credentials?
A | It could be. We’re going to look at it for sure. We are looking at creating a master’s in management for liberal arts students. I have to say that is slowed down with all of the changes. But we are still planning that.
And if they come back seven years later and earn a general management certificate, that could stack into an MBA from St. Thomas. We haven’t looked at the regulations, but we’ve thought about it. We want people to get the skills they need when they need them.
It’s harder to plan. If you think about the world that the MBA was designed to address, there’s not that much of that world that’s left.
Q | How would you define what that world was?
A | It was a world in which you could forecast. You could optimize operations. You could optimize supply chains. You could do strategic analysis to predict or identify future opportunities. There was a sense that every year things would get a little better. Then you have the internet, and things changed, there were some shocks.
Q | Change in business used to occur more incrementally?
A | Measured, if that makes any sense. Now it’s just every day you almost have to start over again and create contingencies and mitigate risk. And the MBA, it was designed for Fortune 500 companies that could plan and execute plans and evaluate plans and plan again.
Q | Who was the full-time MBA program targeted to, and were international students a part of the full-time MBA enrollment?
A | Certainly, international students were part of the full-time MBA until fairly recently. The challenge is, if we can’t get them jobs, which has always been difficult because companies have to spend a lot of money getting them work permission, it’s a hard sell. They come to get jobs with American companies.
Q | Was the full-time MBA targeted to people from public corporations? Or did some people enroll a few years after getting their B.A. or B.S. degree? A | Most people went into the full-time MBA in five to eight years after [earning their bachelor’s degrees]. They got some work experience and they found that business was exciting and they had an aptitude for it.
Q | In addition to responding to different market demands from students, did you have a specific financial goal you needed to hit in creating the restructuring plan?
A | It was more demand-driven than financially-driven. We need to create an organization that is more in touch with the market and what students want. If we do that right, I think the finances will work out fine. But we have to think quite differently. We have to look into new opportunities from new angles that we may not have used before. I think we also need to use our alumni.
Q | How many positions are you cutting and how many are you adding? Initial media reports on your plan indicated 19 job cuts.
A | For the faculty, there were no tenure-track cuts. The only possible reductions might come with adjunct faculty, and we are looking for ways to include them in the certificate programs. This does not touch the tenure-track, which is about 75 percent of our faculty.
Q | What about the 19 position cuts?
A | Those are staff.
Q | That’s primarily in some of the services that you were talking about?
A | Those functions, including external relations and career services, are going to the central university.
Q | So you are consolidating some of these services within the university to avoid duplication.
A | We can’t duplicate. The university is starting up a College of Health, and we have a new athletics initiative.
Q | When you announced the restructuring plan in February, you wrote that “the impact of digitization and demographic shifts have only begun to become visible in higher education and are here for the long term.” Elaborate on how those trends are affecting Opus College.
A | We need to use more data or be more data-savvy to identify potential students. We advertise, we do various sophisticated digital placement of ads, but we need to really find out what people need. We need to find out who they are, what they need, and how to reach them. That can be digitized to a certain extent. We’ve got huge databases, and we need to start figuring out how they can help us meet our market. We are still somewhat traditional.
Q | You want to gather better market research data so you can improve your targeted marketing and offer students programs that they want.
A | Yes. That’s what we’re going to digitize. We’ve talked about creating a platform to identify our students. We’re still going to have real people deliver the classes, and all platforms have a conventional organization attached to them. We have St. Thomas, which has a certain culture that will imbue whatever we deliver.
Q | In the fall of 2019, you had 430 students enrolled in your part-time MBA program, which was vastly more than enrollment in the full-time, online, executive and health care MBA programs. What is the appeal of that program?
A | You can customize it to your own interests. You can go at your rate, you can do it online, you can do it blended, you can do some of it face-to-face. It is the signature program of St. Thomas. Before the AACSB accreditation, St. Thomas had a huge part-time MBA, and it was very practical and delivered primarily by practitioners.
Q | What’s been happening with part-time MBA enrollment?
A | It’s been slightly decreasing because we have a lot more competition from other unaccredited programs. We are the only private school in Minnesota that is accredited.
Q | We talked earlier about the cost of education. Tuition for St. Thomas MBA programs, with students beginning in the fall of 2019, ranged from $54,810 for a part-time MBA to $89,550 for an executive MBA. Are higher education institutions pricing themselves out of the market? What are your objectives in terms of cost?
A | We’re trying to offer more choice. We think of our product as comparable to the University of Minnesota and more price-competitive. We have tremendous respect for the University of Minnesota programs, and we think we provide a very high-quality alternative.
Q | Are you priced somewhat lower than Carlson?
A | Yes. Intentionally, but above Hamline and some of the others.
Q | Does the implementation for the restructuring plan start on July 1, the beginning of your fiscal year?
A | Yes. One thing to the credit of St. Thomas is every employee [whose job was cut] not only gets a severance but has the option of staying until July 1. That fact signals that it’s not mainly a financial issue. The first priority is to figure out how to design the Opus College so it can create a sustainable, competitive advantage for the next five to 10 years. And then somebody else is going to have to do it again.
We’ll have new leadership positions, a new associate dean for graduate programs, and a new associate dean for undergraduate programs.
Q | Anything more you want to share about where Opus is headed?
A | I heard CEO Beth Ford talk about Land O’Lakes, and she said there was disruption and they had to innovate. And I thought, perfect. Seriously, we are facing disruption with new online providers, a reduction in foreign students, a lot more training in-house in companies. We’re disrupted by technology. We’ve got to innovate. And to the credit of St. Thomas and Opus faculty, they are willing to do new things in new ways.
The MBA that was here when I arrived wasn’t that different from the MBA that I got, and I won’t tell you when. [Laughs.] You can look it up. It just hadn’t changed that much. I have an excellent MBA from the University of California, Berkeley, and it served me well. [Lenway graduated from the Berkeley MBA program in 1977.]
Q | How is St. Thomas taking a different approach to its program requirements?
A | A lot of MBA students have undergraduate degrees in business. And a lot of undergraduates took business in high school, so we couldn’t in good conscience make them sit through everything all over again. We can get them through the business core pretty quickly as undergrads. And we did the same for the MBA.
If they’ve already had operations and they want to be a finance major, they just have to have the basics of operations and supply chain management and that frees up elective credits. That’s for undergraduates. The same mindset applies to our graduate programs. By streamlining the core requirements, it frees up a lot of time for students to design their own specializations. We want to get them through the core quickly so they can get what’s new.
Q | You previously mentioned disruptions. The coronavirus is one of the biggest disruptions we’ve ever seen. We’re talking on a day when St. Thomas decided to shift to online programming. How will the pandemic affect St. Thomas and its business programs in the coming year?
A | We’re focused primarily on the health and safety of our faculty, staff, and students. Period. We made the decision to go online. We don’t know what the world is going to look like. It’s not that planning world that the MBA was built for, where you could forecast.
Q | What about the effects on your ability to execute on your restructuring plan for the new school year?
A | This will set back some of the transition, although we can interview people on Zoom. We can work from home. We can teach remotely. We can teach virtually. Part of the reason at Opus we can do that fairly readily is we’ve been working on it for five years, and faculty have been developing online courses.
Q | So expanding online teaching capacity was one of your overarching goals as the Opus dean?
A | Yes. When I first came, I said 50 percent of our graduate courses should be online, and they are. And the rest are primarily blended. We have some face-to-face, but we need to be more creative about how we design courses.
Q | You’ve suspended in-person recruitment events because of the coronavirus, but I take it potential students can learn more about St. Thomas and apply for admission online?
A | Yes, and maybe we’ll have chat groups online. The fact that we can work remotely doesn’t stop us from working. We’re good. I study tacit knowledge [knowledge gained from personal experience], and a lot of tacit knowledge is stuff that happens unconsciously. Maybe that is more difficult to transfer in a virtual environment.
Q | Is the coronavirus the biggest challenge you’ve faced as an education leader?
A | It’s the biggest challenge in the sense that uncertainty is the greatest.
Liz Fedor is the Trending editor of Twin Cities Business.