Last time we talked about bad timing: why announcing a million-dollar rebrand during massive staff cuts is a bad idea, even if the rebrand itself is a good call. This time we’re gonna be talking about maths.
Unlike the decision to rebrand, the decision to set a budget is rooted firmly in calculations. These economic balance sheets and extensive formulas are meant to be the reason we pay our executives so highly, and why economic contractors charge such a premium. It’s sort of like paying a fortune teller or a psychic; you need to pay top dollar to have someone come in who can understand the hidden meaning of the universe, or who can parse through tables and tables of data to present the best financial course forward. It’s financial divination.
But if you’re paying top dollar, they’d better be correct. And here’s where we come to the second mistake that I’ve got a problem with. The current $60 million hole is due, in large part, to dramatically lower-than-expected domestic enrolments and bad financial divination.
Last year, someone in our arcane circle of economists worked out a forecast of 4% student growth, an extra few hundred. This was meant to come from a 50% growth in international students and a 1.8% increase in domestics. And while we crushed the international number (it ended up being 57%), the domestic enrollment rate absolutely tanked to -0.9%. We thought it would go up nearly 2% but it didn’t even get off the starting line - we ended up losing students. New internationals aren’t enough to prop up the uni so, with a 4.9% total decrease in real enrolments, we’re left with a whopping 6.7% difference from the forecast. 6.7%!
Despite the millions of dollars we spend on financial management, despite the massive salaries paid to top-level executives, and despite priding ourselves on our commerce department (which isn’t seeing very many cuts), we’ve somehow fucked it up. The only two explanations are that this massive shortfall was intentionally induced to encourage government funding and to consolidate courses (which would be crazy) or that the people at the very top of the pyramid were completely off the mark (which is also crazy, right?).
I just want you to think of it this way: if this scenario was on your commerce exam and you got your forecast off by 6.7%, they would probably fail you. 4% student growth is an egregiously high estimate to make in the middle of a recession, especially considering the fact that every academic on campus probably could have told them that domestic students were dropping their courses. It’s like if all your crewmates saw a storm on the horizon and instead of battening down the hatches, the Clocktower went full sail. It was an unbelievably bold call that has absolutely failed to meet reality.
And now, the same people that signed off on that 4% estimate are the ones who are choosing where to cut savings. Their target is the very product that they’re advertising to students. Will that encourage domestic enrolments to rise?
I dunno, what does the multi-million dollar crystal ball say? Because honestly, at this point, they might as well be forecasting off our horoscopes. They’re about as grounded in reality as that 4% forecast.
But at least when our horoscopes are wrong we don’t fire our staff.