What I Learned From 2008 and How It Can Help you Pivot Your Program Portfolio
Like many of you, I have been processing the unfolding events around COVID-19 on a daily and sometimes hourly basis.
I’m writing this message to you on day 10 of my family’s self-quarantine. It’s quite the full and sometimes crazy house with my toddler twin daughters, 8-month old son, wife, (who also works full time) and our 75-pound airedale terrier. But it’s also, more importantly, a very healthy house, which is our number-one priority for not only us but our extended family and our wider community. I’m fortunate my wife and I have jobs where we can stay home to help #flattenthecurve, and it’s not for even a second lost on me that there are others in our country who aren’t as lucky.
Because let’s be clear – there are many who aren’t as lucky.
I’m not talking about healthcare workers, which are in a class of heroes all their own. But I’m talking about the thousands of people across our country who abruptly lost their jobs with recent school closings and shelter-in-place orders. You probably know some of them, as I do. The ripple effect of shuttered businesses, high unemployment and slower consumer demand could bring the economy to a screeching halt for the foreseeable future. Last week, J.P. Morgan said the economy is going to take a bigger hit from COVID-19 than in the great recession of 2008. Some particularly ominous reports estimate that up to 50 percent of American jobs will be at risk.
(Also, if you haven’t checked your retirement accounts this last month, don’t.)
So even if you quibble over the exact length and magnitude, let’s all agree a significant disruption is coming, and that it has implications for how all of us in the education space do our jobs and maximize the value we can add. I think it’s fair to assume that almost everyone reading this is old enough to remember what happened in 2008, so I’d like to share what I learned and a few pieces of advice on where to go from here.
What to remember about 2008
The years leading up to 2008 were great ones. I was a Director of Programming at a 4-year, public university. Enrollments and revenues were up in every category. We were hiring new people every month to support the growth. Needs assessment and feasibility research were rarely used because cancellation rates were low.
Then it all came crashing down, in the form of subprime mortgages. Homes were foreclosed on. Unemployment hit double digits. Net worth fell by about $16 trillion, yes trillion dollars. Poverty rates skyrocketed, with many unceremoniously kicked out of the formerly robust middle class.
By 2009, Continuing and Professional Education (CPE) units were feeling the sting. At my university at the time, our enrollment dropped significantly. Cancellation rates hit the double digits. Revenue flattened. Those employees who were the most recently hired were often the first to be let go. In a matter of months, I would go from newly-minted Director at a four-year university to a Thai food delivery driver. (Pride aside, I would do anything to support my family. And actually, I do have some good stories from that four-month stint, which you are fully welcome to ask me about over a beer.)
My point is, I know what it’s like to personally be the casualty of the national economic crisis. And I want to help my colleagues in education help those people however we can. So here’s what I know.
What we learned from 2008
1. As disposable income goes away, people begin cutting out the non-essentials like eating out, new clothes and activities. In our little corner of the world, it means cutting out all educational programs or courses they were taking for fun or development, also known as personal enrichment courses.
2. On the flip side of the coin, when people lose their jobs, they are often willing to invest in themselves in a way they hadn’t felt was a priority before. In being pushed back down the hierarchy of Maslow’s needs, their focus becomes on how to get back into the workforce as quickly as possible. We call these professional development programs.
3. And in a fact of life that I’m even more acutely aware of now as a father of three, parents still need to do something with their children even in a down economy. Youth programs, done the right way, become critical.
What we did (and should have done) in 2008
Almost overnight, the composition of our program portfolio was vastly changed. In 2007, half the programs were personal enrichment courses.
We should have cut almost all of them.
I know that may sound draconian. But think of all the aggressive social distancing policies you’re seeing now that when you first heard about, you were a little skeptical or maybe just incredulous. And then, if you’re like me, you saw the numbers behind the decisions and understood the need for drastic, uncomfortable action.
In order to survive in 2008, we had to spend all of our time refining our professional development and youth (aka childcare) classes. For our personal enrichment programs, we only kept our year-after-year winners.
And then the real work began: research. There was market feasibility research to understand our demographic, competition and the market. We began talking and working with local businesses to understand their needs. We got out in front of these needs by making sure our programs met hiring requirements in various industries.
With all this information, we began to build new programs. In a matter of weeks, we had programs developed and instructors hired. We began the marketing process and figured out funding opportunities for qualified students. We applied for Workforce Investment Act (now named WIOA) certification. Our professional development offerings were ready to go.
Finally, we made a concerted effort in helping families with child care. So we started with a summer youth program where we were able to run profitably and still keep the hourly rate less than a babysitter. It was a no-brainer for parents to send their kids, who were able to take educational programs while having a blast as their parents began the process of getting back to work.
Where to go from here?
I don’t share all of this to be self-congratulatory. Trust me, even though I felt we acted in an extremely agile and decisive manner, I still eventually got laid off. So you can’t control for every single external factor, including those pesky mandated state budget cuts.
But there is a solid chance that, with the right action, you should be able to maintain the vast majority of your revenue. And more than revenue, you can change the lives of a student population that you can support through challenging personal and professional times.
The writing is on the wall: a recession is coming. You’ve probably already had to make significant changes to how you do your work, but don’t stop there. It’s time to protect your community and your teams.
Take care of yourselves and stay safe and healthy. I will sincerely miss seeing everyone at the spring conferences. And I’m always here for comments, critiques, challenges or anything else you’d like to share.