How Innovation and Shared Governance Influence Turnaround Success
The experiences of National Louis University (NLU), a private institution with four campuses in Chicago, demonstrate how innovation and shared governance can influence turnaround success, even in the face of significant program cuts. Despite not having complete buy-in from faculty and staff, NLU was able to successfully reinvent itself into a truly innovative school, proving that presidents and decision-makers make a difference.
NLU is the poster child of a university that successfully shakes the status quo. It provides no-cost tuition and grant-covered programs, supports an unprecedented student-first culture that promotes continuous change and accessibility, and has adopted a data-informed mentality to facilitate equity.
It wasn’t always this way. Twelve years ago, NLU was on the brink of closure.
Now, it has doubled its enrollment and created an institution that lives its values of innovation, excellence, access, and equity.
For example
- NLU’s undergraduate student body is majority low-income (approximately 70% Pell Grant receiving), majority students of color (about 70% Black and Latinx), and majority first-generation college goers (about 70% first-generation).
- The university has among the lowest tuition cost in Illinois and is financially self-sustaining.
- NLU was recently recognized 18th nationally in the Washington Monthly 2022 College Rankings (among prestigious schools including all eight Ivy Leagues) and second in the Midwest for “best bang for the buck.”
- The vast majority of its graduates are debt-free upon graduation.
This is the story of how President Nivine Megahed turned around National Louis University and brought it back from the brink of closure to become one of the top universities in the mid-West.
Collaborating with Faculty to Make Cuts
Dr. Megahed became NLU’s president in 2010, and she inherited some significant challenges from the Great Recession.
Although most colleges and universities suffered during the Great Recession, NLU faced additional challenges that only worsened in 2010–11. NLU was tuition-driven, revenue had dropped approximately 30%, and higher ed recognized the school as a teacher-prep institution. As a result, enrollment was down, finances were struggling, and the board wondered if it was time to close this fabled university after 200+ years.
Megahed said no.
To begin the turnaround process and help NLU survive, Megahed started a strategic planning process by holding campuswide five-week talking sessions. She eventually concluded that she would need to reposition the institution while reducing programs and staff. Surprisingly, she cut 25–30% of the programs, with help from program enrollment and student success data that faculty had gathered for her.
Megahed said, “I remember bringing faculty members together and telling them, ‘So you understand that if we cut these programs, we’re cutting the faculty and staff affiliated with it.’
One of the keys to these cuts being successful was that Megahed told faculty that she was very much committed to a shared governance approach that included them. Surprisingly, the faculty declined, saying, “We gave you recommendations. We can’t wait; you just do it. We don’t want anything to do with this because our peers would kill us.”
Gaining Board Support and Rebuilding Trust
Securing her board’s support was crucial for Megahed to move forward. Although there were disagreements, every board member was convinced by the numbers that Megahed had no choice but to make the cuts she needed to make. Megahed was even willing to take full responsibility for the rising backlash and volunteered to step down as president, but the board refused to allow her to do so and remained loyal to her.
Despite facing criticism from other college presidents in the Chicago area, Megahed took the time to rebuild employee trust through organization alignment, which involved maintaining transparency about future strategies that were and weren’t working. For the next two years, Megahed also hosted monthly dinners at her home with groups of faculty members. Many of these occasions were emotional and sometimes therapeutic. Faculty members who had been critical of Megahed apologized and admitted that she should stay despite the blowback.
She recalled the dinner events, stating, “This happened on more than one occasion, but I remember one of them was crying to me, saying, ‘I’m so sorry. I know we’re so mean to you. Please don’t leave us.’ And I just said to them, ‘We’re in this together. We’ll get through this.’ And what do you know? We did. And I’m so glad because so many wonderful things have happened since then.”
Reinventing NLU’s Mission
After the cuts, Megahed led many group meetings about updating the brand positioning of NLU. During one gathering, she presented the five best ideas based on campuswide feedback but allowed her team to choose only three to effectively communicate how little monetary support they had at their disposal. She also created drastic scenarios to demonstrate how dire their situation was.
She recalled, “My line was that if God told you to make a choice today and that you would live or die by what you chose, what would they be? This effectively freaked out everybody and helped them realize just how dire the situation was and that they had to figure this out.”
They eventually chose:
- Building online capacity
- Providing distance education for NLU’s Florida location
- Lowering the cost of undergraduate degrees to prevent students from either dropping out or struggling to gain employment while increasing the quality of education
Creating a Tuition-free Curriculum with Relevant Career-prep
To address the third change, NLU created Pathway, a $10,000 program wholly grant-supported for high-needs students. Pathway first attracted 80 students the first year when Megahed only expected 25 or so. Approximately 370 students enrolled in the second year; an additional 550 more came in the next year, followed by 700 students during the fourth year.
To ensure students completed their degrees and gained employment upon graduating, the mission-driven Pathway curriculum was embedded with career-prep courses relevant to each student’s degree. In addition, every student was paired with a success coach. A predictive analytics approach that assigned students to “red,” “orange,” and “green” zones based on their success rates enabled coaches to proactively intervene whenever grades or attendance dropped. The program remained mission-relevant because Megahed’s team believed in and nourished the success of these students who otherwise never saw the prospect for themselves.
Defining Innovation and Adopting a “Fail Fast” Mentality
Although higher ed already considered NLU innovative, Megahed felt that NLU was practicing what she referred to as “innovative chaos,” where leaders would embrace any innovation so they could communicate how NLU was innovating education. Megahed believed it was essential to clearly define what kind of innovation NLU needed to pursue and chose to be innovative on behalf of their students to improve student outcomes, learning, and experience.
This, however, required NLU to pursue change management and adopt a “fail fast” mentality, which has been a difficult concept to grasp in higher ed overall. Megahed took it upon herself to attend every new hire orientation over the next ten years to ensure this culture would thrive. Megahed discussed how success is built on a mountain of failure rather than success and encouraged employees to take calculated chances and decisions on behalf of students. As a result, she oversaw approximately 70% of NLU’s current faculty and staff body orientations.
Over the next 10 years, every new employee would get a symbolic “Get Out of Jail Free” card, representing Megahed’s belief that almost every wrong decision could be fixed. This encouraged faculty and staff to act whenever students asked for help. Megahed feels indecisiveness is much worse than making a wrong decision since it can undermine her university’s culture of taking risks and failing fast.
NLU also pilots a new governance structure annually that faculty review at the end of the year. Initially, faculty rejected these pilots because they felt processes and procedures needed to stay the same even if they didn’t like them. But now, faculty embrace them.
Being Data-informed Helps Improve Equity
Because NLU is an equitably focused institution that strives to create a sense of connection for all students, Megahed was surprised one year when internal data matched the national trend that male students of color were failing and dropping out at higher rates than their peers. After conducting interviews campuswide, Megahed learned there wasn’t a sense of belongingness for male students of color. She later reversed attrition rates after creating a program called the Eagle Brotherhood, an affinity group for male students of color led by one of NLU’s success coaches, a male of color.
However, low academic performance continued to persist for these students. NLU later built co-curricular courses after additional research suggested increasing curricular studies since male students of color weren’t as prepared for college work. Megahed refers to this as being data-informed instead of data-driven since the data shouldn’t be the only evidence that drives change.
Accolades for NLU’s Turnaround Success
This co-curricular program’s success partially contributed to NLU ranking 18th in Washington Monthly’s college rankings, which feature many prestigious Ivy League schools. Additionally, students remain debt-free even though NLU recently had to raise yearly tuition from $10,000 to 11,000 since reimbursement also rose to match the increase.
NLU also recently hired more student affairs employees who provide additional co-curricular support to help ease the transition for students into employment. Looking ahead, NLU is working on accelerating the learning process with a three-year degree program, providing effective competency-based learning, and launching short-term stackable credentials.
“That’s what I mean by innovation on behalf of our students. What is the modeling going to look like now to address the needs we’re seeing with the students that we have?”
Three Recommendations for Higher Education Leaders and Boards
- Stop accepting existing norms. It’s essential to rethink the higher ed business model.
- Culture always trumps strategy. Don’t shortchange culture because there will always be resistance that could jeopardize it.
- Embrace data to inform decisions.