NATIONAL UNIVERSITY’S takeover in 2008 by the SM Group’s Sy family was one of the higher-profile corporate acquisitions of recent years, not just because SM transactions are always big news, but also due to NU’s status as a card-carrying member of the booming UAAP sports league. The potential to use athletic success as a means of polishing the NU brand was foremost in the minds of the principals from day one. But beyond athletics, the University’s prospects were transformed dramatically by access to SM management expertise and resources. Yet having resources isn’t everything, as Agbayani P. Pingol II reports after conversations with key NU officials:

FIRST IMPRESSIONS
Teodoro Jhocson-Ocampo, NU president:
“Before the Sys came in, during the process of the negotiations, I identified three majors that we needed to address. One was infrastructure, number two was academic quality, and number three was our performance in the UAAP. Within the university belt, it’s a given that how you perform [in the UAAP] has a direct effect on your enrollment. When the partnership happened, the first thing that they addressed was infrastructure.”

Renato Carlos H. Ermita
NU executive vice-president:
“Infrastructure [is] really about building capacity. We knew that we needed to build up enrollment by building capacity. Part of that is really bringing people to manage the business side. I came in as the operations person.”

“A finance person was also introduced. The background here is that NU was a family-run institution so coming from the SM side — which is also a family, but very corporate — they are used to very systematic processes especially in spending. So I think that [apart from] the infrastructure, part of the process was establishing a clear financial picture of the institution.”

IMPROVEMENTS
Mr. Ermita:
We determined an improvement plan… for us to be able to attract better faculty members because the rates at that time were really not competitive. Secondly, we had to tap academic managers. The third person hired was an academic, following operations and finance officers. Those were the first three hires of the group.”

Mr. Ocampo:
“You have to bring in enrollment — whatever marketing strategy to attract them. And then if that’s successful, simultaneously, we try to improve on the quality of the faculty. The only way you can get that is to increase the rates you pay, the compensation of the faculty. You have to get good deans, good academic managers.”

“You have to find the match. If you don’t have students, then you don’t have enough revenue, then you don’t have enough to build a quality educational experience. You can’t compensate the faculty very well. We were in that situation. When you start leveling up, and the finances improve, then it’s your objective really…to give value for money for your students, which we are [doing], which is what SM also wants. We really have to level up.”

“Everything in business is what you generate. You have to be about what you spend. You have to have…extras to improve facilities and infrastructure. And of course the marketing side where you need to bring in the ‘warm bodies,’ the students that give you the revenue.”

THE SM ‘ADVANTAGE’
Mr. Ermita:
“In NU, we have the advantage of having access to the SM Group of Companies. Because of that, we are also able to get feedback faster. Also, we are able to get our students first crack access to employment.”

“SM [is also able] to send their managers to give talks here. They come up and we’re able to learn from them also as to what they expect of the graduates and the kind of background or knowledge that we need to impute to the graduates before we get them into the mainstream — the work force.”

Mr. Ocampo:
“Now that we’re doing well in the UAAP, the marching order from the board was to uplift and level up on academic quality. It was on the management of NU to improve. SM was an instrument because we were able to get the better faculty and facilities but again it was left upon to improve whatever was needed on the academic side. From your academic managers, to your faculty, and reviewing the curriculum and aligning it with the times.”

“We are all aware as schools that… graduates were generalists and their knowledge were not focused and aligned to the [needs of] certain industries. But right now, our deans are able enough to [know] the current situations in their industries. So they add on subjects and content that are tweaked towards the needs of the industry — be it engineering, HRM (hotel and restaurant management), pharmacy, and so on. I think with most schools now it’s been the demands of the industry and their call for graduates that are more focused.”

GROWTH AND ACQUISITIONS
Mr. Ermita:
“Right now, we don’t mind acquiring more properties and building more infrastructure to increase our enrollment (Note: NU’s pre-SM enrollment was over 1,000 and has risen to 7,000, with a short-term target of 8,000. Enrollment growth in 2014 was 27%.

We’re trying to expand towards the south. But we’re open to getting more schools that are up for sale that are aligned with NU’s model.”

‘QUALITY IS EVERYTHING’
Mr. Ocampo:
“We really need more funds. Quality is everything. Even the faculty, you still need to educate them to improve. Learning is continuous. You have to keep up current times and the only way to do that is to continue developing your faculty and that takes money.”

Mr. Ermita:
“We’re hoping that with our operating and business model,…we can prove that we are a private institution that can produce. The typical mind-set of the academe is that ‘a private entity does not translate to quality.’ If you are for-profit, your quality is low. That’s how they stereotype it. What we’re saying is we’re out to prove that’s not true. On our part, it makes business sense to produce the quality because it will sustain the institution.

“There’s no trade-off as long as you eliminate waste. Efficiency has got to always be a part of it without sacrificing the quality. Efficiency I think is the key, it’s also…learning from the business side.”

FOCUS ON SUSTAINABILITY
Mr. Ermita:
“Whether you’re a religious or a non-sectarian institution, staying relevant is the question. You would have to really focus on things like processes, efficiency, sustainability, and ways to achieve that. I think that it is not a choice. We’ll have to really all go there. Overseas they would say that most successful academic institutions are run like corporations. I think it’s the reality. On our level we see it’s working.”

BUILDING A STAND-ALONE BUSINESS
Mr. Ermita:
“That’s what we’re looking at — doing it on our own. It’s also similar to the way SM did it. The way SM looks at the market, the way they were able to grow. The malls grew even through the hardships of the ’80s. It’s a view of the future, a particular kind of outlook, and the potential of a particular institution.”

“Having said that, I’d say that basically schools cannot stay operating the way they are used to for the past 30-40 years [if they want to] stay relevant.”

INTERNATIONAL COMPETITIVENESS
Mr. Ocampo:
“Some tradition…will always be there to keep you sustainable. Some schools are crying about [moves to] take away a lot of things from the general education curriculum. To be able to have a student compete in other countries and to be employable, your ways and your curriculum need to be more attuned to [international competition] also. “

HURDLING THE BUREAUCRACY
Mr. Ocampo:
“Even if you have the funds, one has to be accredited to become autonomous and you’re able to offer anything that will be competitive and in demand globally. It’s not all financial really. You really need to be able to bring up your quality to be able to…go through things like accreditation. There are certain government regulations also [that a university has to comply with] to be autonomous.”

“Right now we are not, we are still getting there so everything is regulated by CHED. So even if we have the money to do what we want to do, we’re still under CHED, we need their approval. To sustain quality, there are other things outside of CHED that we might want to bring in but we cannot because we are regulated. When we’re able to offer things without CHED’s approval, then it will be faster for us to be able to tweak our offerings that will be more modern and current with the times. There are a lot of things in the curriculum that need change but because we are being regulated, hindi pa pwede