Universities: You are not being disrupted, you are getting a promotion
Disruption is not happening any time soon if universities step up their value. Eight ideas to increase competitiveness.
There’s a lot of talk about colleges and universities being on the cusp of disruption, and many administrators and faculty out there are either freaking out or putting their heads in the sand. My message to you is just chill and read on.
Andrew Carnegie and the Rise of the Modern University
Let’s take a superficial stroll through American education history. Starting in 1883, there was a tremendous explosion of free public libraries fueled by self-made billionaire philanthropist Bill Gates, oops I mean Andrew Carnegie. It turns out that Carnegie had never attended school but was a product of self-education through a free library. He was the living and breathing evidence that formal education was absolutely unnecessary—at least for him. A few decades later, half of America’s public libraries had been started and funded by Carnegie. He had broken the monopoly of educational institutions over information. Now anyone could walk a few blocks down the street, check out a book, and start learning anything they wanted, anywhere they were, at anytime they felt like it, for free. BAM! Free, convenient, and ubiquitous education. Universities, you are so disrupted!
Well, not so fast. At the same time, universities were undergoing a radical transformation by implementing several innovations that increased value for students. For example, in 1893, ten years after Carnegie first started his push for libraries, the university credit hour was introduced to the world by Harvard president Charles Eliot*. It mandated “contact hours” (lecture or lab) in order to improve quality, and to standardize and spread the elective system—an improvement over the older one-track system. This allowed undergraduate students to pursue their interests, gain recognition in particular fields of study, and transfer schools. A new model of university arose, which was a much better fit for its time. Clearly the spread of public libraries proved no threat to this new American university model.
The take away: changing times might bring cheap substitutes, but they also bring opportunities to provide more value than ever before.
History Repeats Itself
We live in a time very similar to Mr. Carnegie’s and Mr. Eliot’s. Advances in information technology spurred a new productivity revolution comparable to the industrial revolution. The existing education system has not effectively adapted to the new economy yet. The latest wave of titans of industry can see that and some of them want to help fix the disconnect. On top of that, we have new advances in education: now you get the book and the lecture for free online.
What did universities do last time this happened? They increased the value they offered. What should they do this time? The same.
Increasing value can be dangerous, however. The theory of disruptive innovation predicts that if an organization increases the “performance” of its products through sustaining innovations, it risks increasing its costs only to provide benefits that customers don’t actually value. In other words, customers get over-served and over-charged. This further opens the market to newer and cheaper options that only focus on core benefits, eventually enabling the entrant to disrupt the incumbent. The key insight is that sustaining innovation can be expensive and dangerous if you are over-serving your customers, but essential to survive if you are under-serving them.
Are Universities Over-serving or Under-serving? That Is The Question
So, the big question is, are colleges and universities over-serving their customers, and hence on the cusp of being disrupted by a lower cost, lower value option? Or are they under-serving their customers, and hence in need of sustaining innovation?
These stats might answer the question:
· 44% of college students drop out (don’t graduate within 6 years)[1]
· 8% of recent college grads are unemployed[2]
· 48% of employed college graduates in the US are in jobs that don’t require a college degree[3]
That means that if you are a college freshman wanting to work in your field after graduating, your chances of succeeding are about 27 percent. Some would consider this a 73 percent failure rate for colleges and universities. So are higher education institutions over-serving or under-serving their customers? I think it is safe to say that they are under-serving close to 73 percent of their customers.
The good news is that there’s lots of room to innovate and improve before risking over-serving and disruption!
Some might ask, how is it possible that these institutions are under-serving their customers if the cost of tuition is increasing so fast year over year? (Tuition has increased almost 3 times as fast as inflation over the last 30 years, effectively tripling the cost of a degree.)
The answer is simple. Higher education institutions are over-charging for some services and under-serving in other areas.
Note that the organizations most at risk of disruption are those that are over-charging and over-serving, but the higher education industry is actually over-charging and under-serving. I know this sounds like adding insult to injury. But stick around. The reason I make this distinction is because the prescription for an organization that is over-charging and over-serving is vastly different than for one that is under-serving and over-charging (and the answer is not lowering tuition).
Are Colleges and Universities Really Over Charging? They Have Such High Costs!
Are you one of the few out there that doesn’t believe universities are over-charging? Take the example of lectures. If a student can get a lecture online for free, then whatever percentage of tuition is being allocated to pay for a similar lecture on campus is an overcharge. In other words, if your customer can easily get something for free somewhere else, you shouldn’t charge them for it. That’s called ripping someone off. Of course, professor out there, no one lectures exactly like you do, but I’m sure it’s pretty close.
Am I saying we should get rid of the people who lecture to lower costs and thereby lower tuition? Absolutely not. I am saying, however, we should eliminate the task of lecturing whenever it is redundant.
So, am I saying lecturers in community colleges should be transformed into teacher assistants for fancy Ivy League professors taking over their classrooms through Coursera? Also not it. If that were the case, what would students that work as teacher assistants do then? I say we let those poor students keep their jobs.
What I am saying is that the task of lecturing is taking up time, space, and resources that could be used for value-generating tasks that are currently being left undone or underdone. These tasks could include: finding and supervising real-world projects with local companies, overseeing independent study projects, engaging more students with research being done on campus, and providing individualized mentoring to at-risk students. All these would better prepare students to succeed in school and in the job market.
Focus on Tasks
The example above shows how one task, lecturing, can be a source of over-charging and under-serving at the same time. It also shows how adopting “threatening” innovations can actually open up resources to engage in tasks that increase value for students and help institutions retain their competitive edge.
The strategic point is that if you are running an organization that is over-charging and under-serving, your go-to strategy shouldn’t be cutting costs to stay afloat while you wait to be eaten up by new and cheaper technologies. You don’t even need to find a way to disrupt yourself (as organizations that over-serve and over-charge need to do). The answer is much simpler. It is tried and true in the business sector, though often tough to pull off. It’s called resource reallocation. And what you need to pull it off is real leadership.
So these are the basic steps in resource reallocation. The first step is to identify all tasks that are currently being done. Second, identify tasks that could be eliminated completely, done more efficiently, or automated through technology (ie: lecturing, grading math homework). Third, identify tasks that generate value for your students (or the Dept. of Ed. or employers) that are currently being left undone or underdone. Fourth, reallocate the resources freed up by step 2 to the tasks identified in step 3.
Sounds easy enough, right? Not at all. That’s why you need real leadership. Remember that if you don’t do it, others will, and you and your organization will be left behind.
Now, it might be the case that the same amount or type of human resources necessary to complete the “old” tasks will not be necessary to complete the “new” tasks; but, with 73 percent of college students being under-served, there’s plenty of room to make very valuable contributions for everyone who is willing and flexible enough. But if you hate upping your game, well, you will be replaced by technology sooner or later.
The point then is that universities can transform today’s potentially “disruptive innovations” into simply “component innovations”. Component innovations improve the products and services of smart industry incumbents, rather than making the incumbent go out of business. This is the example of LCD technology eliminating Cathode-Ray Tube technology from TV sets. At the end of this war of technologies, we are happier with our TV sets, and they are still being made by the same companies—except for those that stuck to their old ways.
So What Are Some Strategies for Colleges and Universities to Increase Their Value?
There are a myriad of things higher ed institutions can do. Below is a list of ideas, some strategic, some tactical, and some in between. Clearly not all will apply to all institutions of higher learning.
1. Shift from informative to transformative. Universities always said they were, they always aspired to be, but they rarely purposefully did much about being transformative experiences. Most of the time, higher ed institutions have been so occupied putting information inside their students’ brains, that they end up simply hoping that transformative experiences will happen along the way. Now that the information can be put in students’ brains with less effort on the part of schools, the opportunity for value and differentiation resides in being transformative. And by that I mean, helping students become powerful communicators, effective leaders, collaborative team members, critical thinkers, ethical decision makers, tenacious workers, and creative.
2. Utilize your convening power. Bringing people together is hard. As a recognized institution in your sphere of influence, you have a power that is difficult to replicate. Maybe you can bring in the mayor or governor to give a speech, or local business leaders to participate in a panel, or visiting professors from a foreign university to lead workshops. Students greatly value these experiences, as they provide insight and inspiration to succeed, as well as a forum to network with like-minded people and potential employers. The more you use your convening power, the more it grows. It is a self-reinforcing action that entrenches you as the platform where valuable connections and opportunities occur.
3. Squeeze the full value out of your real estate. Most institutions have large properties that go underutilized, especially during evenings, weekends, and summers. Not utilizing your assets at full capacity increases your average cost per student, driving tuition up and leaving opportunities for added value untapped. Can you think of added value activities that can occur during current downtimes? This is especially important if an institution starts leveraging online resources to replace lectures. In a worst case scenario, can you at least rent some of the space to generate additional revenue and relieve pressures to raise tuition?
4. Build partnerships with institutions that are different than yours. Institutions across town and across the world are always looking for partnerships to help them compete. If you are an arts institute, can you partner with a technical college in town to allow your students to diversify their curriculum and explore niche interests? If you are a state university, can you partner with a university in a foreign country for a dynamic, 21st century exchange program? Partnerships like this can provide valuable, unforgettable and transformative experiences for your students that empower them to thrive in a globalized, interdisciplinary world.
5. Leverage your research. Involve your students in helping hypothesize, design, execute, and analyze research. Pushing the boundaries of knowledge can be quite fun, and make your graduates a lot more valuable to employers in the field. Research also helps students develop attributes employers value, such as critical thinking, attention to detail, technical writing, and perseverance.
6. Think interdisciplinary. One of the awesome things about a university is having such a diversity of disciplines in one location. Too bad these people rarely talk to each other on campus—it would make for a valuable experience MOOCs couldn’t easily imitate. Getting people together from different backgrounds to help solve real-world problems is exhilarating and drives student engagement. It also helps develop attributes such as team work, intellectual humility, initiative, and creativity. Universities rarely do enough to cultivate and reward this kind of interdisciplinary experiences.
7. Focus on populations that need you the most. Most Ivy League professors would not even be able to understand the way many high school drop outs speak or the challenges they face to stay in school. If you are a community college professor or administrator, I hope you are able to. Making sure your institution understands the needs of its students very well is the only way you can stay relevant. If you are an out-of-touch professor or institution, you might as well be replaced by a MOOC. But, if you actually know how to speak to, motivate, and empower underprivileged communities, you are incredibly valuable to every stakeholder in the education system: local, state, and federal governments, students, employers. Part of the problem is that many administrators and faculty don’t want to make the effort to bridge the cultural divide between them and the populations that need them the most. Some aspire up instead of reaching down, when reaching down makes you far more valuable.
8. Querer es poder. That’s one of my favorite sayings in Spanish. It means that you can accomplish anything you set to do in your heart. It can also be translated as “desire is power”. The idea is that each has their own onus of power. As a higher education faculty or leader, you have the power to bring about the changes that need to happen in your institution. A big part of that challenge is helping your students understand that they also have the power to succeed, no matter their circumstances or how flawed their educational institution might be. Just think of Mr. Carnegie.
