Managing P3s (Part 2)

This is the second article in a two-part series by Tonya Neumeier, Vice President of University and Client Relations at COCM (bio below). The first article, which explored the importance of focusing on management during the design and development phase of a P3, can be found here. Part 2 below explores topics specific to once a community has become operational.

 

The following comes from vast experience across a wide range of campuses, all of which had a P3 structure requiring a third-party operational partner, in either a standalone or shared-governance arrangement. In a shared-governance arrangement, both entities are able to effectively utilize their strengths (typically residence life retained by campus and facilities/operations/financials to the third-party), while efficiently and seamlessly providing services to students and campus stakeholders. This structure can be extremely successful and, when done right, makes both the campus and third-party company better together than they were separately.

 

Set clear, common goals for the project, understanding that goals for various stakeholders may diverge during the life of the project. If this happens, keep in mind everyone needs to work toward a “win-win-win-win” situation. Your management partner should be able to help bridge the gap and provide insight from all perspectives (owner, campus, operations, students, etc.).

Real-world example: A campus built a fairly large project as their first housing on campus. Campus leadership chose a P3 structure with non-profit ownership to achieve their goals of increasing recruiting and retention on campus, and providing cost-effective housing to students in a high-priced area. Campus leadership preferred the building be solely inhabited by first-year students, with a set number of upper division students serving as RAs. Ownership, however, needed the building to be fully occupied, regardless of class standing, in order for the financing to work. Luckily, once all the stakeholders were educated on the needs of the others’, a compromise was worked out to allow a limited number of upper division students into the community annually to ensure the complex remained full. This was a win for the owner, a win for the campus since it helps with mentorship and retention, a win for the management team since funds were available to operate the community and a win for students who need housing.

Goals are good. But goals which cannot change or morph over time become a major roadblock and can eventually have a negative impact on a P3, including how it is perceived by various campus administrators and students.

 

Having the right people, in the right positions, involved in a P3 is imperative. When looking at campus team members to involve, you want to have people who: are able to make decisions and are empowered to do so, consider others’ opinions, can analyze data and think logically, have a basic understanding of the P3 structure and have flexibility to participate in meetings, calls and work groups. It is also vital that the stakeholder(s) involved understand that there are tradeoffs between the desire for enhanced amenities, programs and design elements, the cost of adding such items and any subsequent inevitable increase in rent to the residents. Involve additional people as needed, but have a small core group of participants which consists of key stakeholders from campus, ownership and operations.

 

Communication is a necessity, from the outset of the project through on-going operations. Striking a balance on communication can initially seem daunting. If you have the right people in the right places (see above), this makes life a little easier. Create communication protocols (frequency, email, in person, etc.), standard reporting structures, data needs/analysis/decision timeframes and meeting agendas (distributed prior to meetings). If specialty items are being discussed, involve someone who can speak intelligently to the topic (food service, safety, parking, etc.) from campus or the industry. For design issues that will impact revenue and operations expenses for the life of the project, it is often important to make sure that these “influencers” have experience from multiple institutions or projects so as to not let “how we did it” at one or a few locations influence far-reaching decisions. Determine work groups to accomplish tasks which can then report back to the core P3 team, rather than involving everyone for every item. Keep people interested and in the loop and work through organizational silos. Document decisions.

 

With a P3, you may not be able to keep doing things the way you’ve always done them. We hear the phrase, “that is how we’ve always done it,” on campus all the time. Public-private partnerships may, and in some cases should, disrupt doing business as usual. This does not mean a campus has to give up control and revamp every aspect of their student residence experience or restructure; it does mean having the opportunity to look at the “why” of policies, processes and structures to possibly make them more efficient or more student friendly.

Real-world example: A campus had standing room only (SRO) in housing for many years and enjoyed wait lists long enough administrators didn’t need to market housing and, in fact, created liberal policies to allow students out of their housing contracts. Additional beds were developed on campus through a P3 and were successfully absorbed into campus. Jump ahead two years, even more additional beds were added to accommodate a growing enrollment; however, these beds ended up cannibalizing existing beds and the campus quickly ended up with an occupancy percentage in the low 80s. After much discussion and analysis, it was determined no modifications were made to marketing, occupancy management practices or policies to move from a SRO environment to a competitive environment. Staffing patterns and residence life budgets were also not modified to reflect the lower occupancy, which taxed the budgets even further. It took two years, a change in culture and philosophy, and many sleepless nights to plan and implement strategies/policies to increase occupancy and still remain student friendly.

Bringing a housing P3 to campus is a perfect time to review how things are done. As campus administrators, there are always those nagging issues that continually get put off until there “is time to address them,” which rarely happens until something blows up and requires immediate attention. Make the time in the initial stages of operating a P3, but don’t place the “blame” for the change(s) on the P3. Also, don’t be afraid to review policies/processes every couple of years during the life of the project; you’ll be surprised how many things can get easier once the project is stabilized and everyone has gotten comfortable with the partnership.

 

People who are good at operations ask “Why?” a lot, so don’t be surprised when your management partner starts doing so. They also keep asking “Why?” until they dig out a real answer. This is not because they are stuck being 2 years old, it is to understand a process or policy, if it makes sense and how it could be improved or made more efficient. It is also how many policies/processes are made more student friendly without compromising the integrity of the action.

Real-world example: An apartment-style residence hall for upper division students was being showcased during a tour of campus. To do laundry in the building, students passed a desk staffed 24/7 and swiped their cards 3 separate times in less than 50 feet before gaining access to the laundry room where they then had to swipe their card again to turn on the machines. Imagine having to do this while holding a basket of clothes and laundry detergent, which was what the students complained about. We asked “Why?” and received different answers from multiple employees. Eventually, the answer boiled down to “It is a fire marshal regulation” which the operations team believed improbable, but could be looked into. After minimal investigation, it was found this was not the case, but rather the campus card office had been instructed to install card readers on every first-floor door in the building. A suggestion to remove all but the first common room door swipe and the actual laundry machine swipe was adopted and students were much happier with their laundry experience.

Not all “why” questions have easy answers or solutions, but digging deeper into processes and policies is beneficial. Little operational nuisances can add up to be big student annoyances, which influences the overall student experience. Having eyes from the outside oftentimes makes uncovering these issues easier and provides experience from a wide variety of campuses, in turn offering simple solutions which are known to work.

 

P3 partnerships need informed decisions to be made. Making decisions in silos, not using available data, languishing in discussion or engaging in never-ending analysis is not good for anyone or the project.  Silos are one of the bigger aspects of operations which need to be mitigated in a partnership. Everyone involved needs to understand how their decisions impact other departments or the project as a whole. Communication, as discussed previously, is a key component to understanding.

Real-world example: A P3 on campus enjoyed high occupancy from the initial opening of the community. Occupancy was evenly split among new residents (freshman required to live on-campus) and returning residents. Both populations were required to purchase one of two meal plans which were thoughtfully developed at the beginning of the partnership to accommodate students who had kitchens in their suites as well as those who didn’t. Several years after opening, campus administration changed and a unilateral decision was made to have only one meal plan which increased costs to residents by over $2000 annually. This modification was not discussed within the structures provided by the P3 contract and significantly impacted the returning resident numbers (drop of over 15%) as well as increased the number of new students seeking housing requirement exemptions for financial reasons. Although the project is working through the “surprise” change, the long-term impact on occupancy and student satisfaction has yet to be determined.

 

The ten topics covered in these two posts are only the tip of the iceberg for management of a housing P3. There are many more examples and ways to dig deeper into these topics and others. Thank you for sticking with these posts and good luck on your continued exploration into on-campus housing P3s!

 

 

TONYA NEUMEIER, Vice President of University and Client Relations | Tonya currently serves in a leadership role for operation with COCM and has over 30 years of experience in student housing and higher education.  She started her career with a large student housing provider where she gained experience partnering with campuses, management of residence halls and apartment complexes, high- and low-rise facilities, food service, conference services, marketing, branding and university relations. Tonya then went on to work for Duke University where she spent several years managing on-campus housing. Her background and knowledge in the field led her to additional opportunities, including consulting on student housing management and access control systems across the United States and internationally. Immediately before joining COCM, Tonya managed operations and projects for a growing student housing company including system integration, general operations training, as well as coordinated transition and crisis response services.