4 lessons on financial sustainability and organizational transformation in higher ed

In early 2025, EAB hosted three convenings of chief business officers (CBOs) as part of our roundtable series. Participants gathered in Washington, D.C., and Berkeley, CA, to discuss the opportunities and challenges facing higher education, as well as to share insights and best practices. Sessions focused on:

1. Current and future financial challenges for colleges and universities
2. Optimizing campus space and the built environment
3. Strategies to improve the success rates of organizational transformations
4. The CBO’s role in building an AI strategy

Read below for a recap of the event and the top takeaways from the group’s discussions.

1. Remain resilient in the face of uncertainty

From uncertain federal policy to the looming demographic cliff, higher education is experiencing a whirlwind of pressures that impact already precarious finances. CBOs must maintain clarity and prioritize the evaluation of opportunities and investments now more than ever. EAB experts highlighted four key areas for CBOs to monitor:

• Updates on federal research funding and continuation of projects
• Addressing the changing national and global enrollment landscape
• Ways to engage donors in targeted advancement campaigns
• Considering alternative revenue streams

The Financial State of the Sector featured Inside Higher Ed’s 2024 survey of CBOs that captured perspectives on the financial sustainability of their institutions. 85% of CBOs who responded to that survey agreed with the statement “I am confident my institution will be financially stable over the next five years.” Attendees questioned whether the survey results would differ today due to a wave of federal policy changes since its publication. Several CBOs expressed concerns about ensuring their institutions remain financially viable.

Updates on federal policy and the international enrollment landscape prompted lively conversation as CBOs grappled with how the pace of policy change leaves little room for long-term solution planning. However, CBOs remained positive and recognized that this is an opportune moment to educate others on the financial realities of their institutions. Given heightened uncertainty, EAB recommends financial scenario planning to move from a state of deliberation to purposeful action.

2. Perform evaluations to determine the best use of space

The 2020 pandemic exacerbated existing challenges with unused campus space, resulting in university leaders facing tough decisions on how to best manage the costs and utilization of their built environment. EAB experts offered various strategies, including:

• Analyze and evaluate space usage on campus to initiate discussions on cost-saving opportunities
• Consider incentivizing a move to luxury, amenity-heavy, shared spaces instead of private, single-use spaces.
• Creatively source space funding by activating real estate and engaging donors

CBOs discussed attracting donors to existing spaces and generating revenue from campus facilities (e.g., leasing space for films and summer camps). Attendees had many questions around advancement funding as institutions look for support on existing building maintenance following expert advice on limiting new construction on campus or “no net new.”

You can evaluate space for cost savings in several ways, including occupancy sensors, a self-reporting database, or having Facilities staff conduct inspections. CBOs shared their own space evaluation experiences and tactics, such as conducting a walking meeting through the space to show inefficiencies or opportunities. Others expressed hesitancy to implement automation technologies across campus due to older buildings and concerns about time to completion.

3. Improve the success rates of organizational transformations using change management strategies

Higher education’s complex challenges require a reimagining of people, processes, and technology. EAB’s experts shared case studies and existing EAB resources to help guide CBOs on the road to lasting, effective change.

• Transformation case studies: The group spoke about the University of Auckland’s approach to functional redesign and pointed out how closely their approach resembles out-of-sector project management.
• Change management guidelines: At the crux of organizational transformation is change management. Participants dove into change management advice, such as how to fix a pain point, creating a champion, and showing a proof of concept.
• Administrative Effectiveness Index: CBOs received a preview of EAB’s expert-led solution that helps evaluate critical business capabilities, surfaces process improvement opportunities, and provides a prioritized roadmap of investments to close administrative process gaps.

One CBO shared how securing board support before organizational transformation helped mitigate resistance from campus stakeholders. The group was able to hear first-hand the success story of a profiled institution on preserving change momentum through training transformation teams on culture and institutional needs.

CBOs exchanged ideas on overcoming barriers, such as existing campus culture, to successfully implement organizational transformation, including one institution’s success with an organizational effectiveness squad that drives change in targeted areas.

4. Determine the CBO’s role in building AI strategy

While the initial excitement around AI has slowed, many institutions are still unsure of how to adopt AI on their campuses. EAB’s AI postures helped CBOs understand how to support AI enablement and application development at their institutions.

EAB experts recommended various postures, including:

Several CBOs mentioned establishing AI structures and polices with designated taskforces but noted they are still in the early stages of information gathering for how to implement AI on campus. Attendees raised concerns over the risks of using AI in student interactions, such as eliminating the personalized university touch that students and parents seek.

Navigating the complexities of financial viability, space utilization, and AI advancement is no easy task. CBOs appreciated the opportunity to speak about challenges and discuss collaborative solutions. These conversations remind us that change is the only constant we can expect. And we at EAB look forward to tackling the challenges and embracing the opportunities to work together.