Traditional Higher Ed Dying

When I talk with college leaders about the challenges they face from online education--innovative new ventures, scorecards, resistance to higher tuition etc.--many are still in denial. They continue to believe that the traditional higher education model – which with bells and whistles has survived for 1,000 years – will never fundamentally change.

Tell that to a newspaper executive or journalist, who has seen his world turned upside down by web news services and the collapse of classified ad revenue. Or to a former travel agent rendered obsolete by Travelocity.

Higher education is quickly becoming engulfed in a similar tsunami of disruptive innovation. I’ve written on the background to this. And the pattern and reaction in higher education is very similar to other transformed industries. For example:

The disruptive innovator first aims at an unserved or underserved market using a new technology or service. So initially it doesn’t seem a big threat. Sony’s 1950s transistor radio was first marketed to teenagers who had never owned a radio. And MOOCs and other innovations are still mainly aimed at non-users of college.

The innovative product is initially not very good. That allows the traditional suppliers to dismiss it as shoddy. That was true of early personal flight reservation systems. Sony’s early products were cheap but crackly – but good enough for listening to rock and roll. Similarly, cutting edge online education has plenty of hiccups and – for now – isn’t a head-on challenge to established colleges with full-time faculty and impressive facilities. But the experience of other industries suggests that improvements will reach a tipping point where it will indeed mount a full-scale “invasion” of the existing market.

The disruptive innovator also experiments with business models that could transform the very nature of the industry, as Steve Jobs did with iTunes. And new models like Western Governors University, or Southern New Hampshire, or UniversityNow, or the next wave of models, pose an existential threat to the 1,000-year-old model.

Sometimes public policy helps trigger disruptive change. Deregulation starting in the late 1970s opened widening cracks in the Ma Bell monopoly and sharply accelerated telecom innovation. If Congress delinks student aid from the moribund accreditation system, and further encourages meaningful quality scorecards, the same will happen in higher ed.

So leaders of traditional colleges need to think differently about the new wave of competition. They can’t defend themselves with a few technology wrinkles. They have to imagine and plan for a very different world:

A world without accreditation and credit hours as the basic units of service, replaced perhaps by competency measures and independently credentialed courses.

A world in which students customize their degrees (or equivalent) from multiple institutions and experiences, with only a relatively short period in a full-service brick-and-mortar institution.

And a world where students want different products at different prices, just as in other industries. Traditional colleges will have to learn about differential pricing for different levels of educational service.

No wonder an innovator might greet a typical college president with the traditional Chinese curse: “May you live in interesting times.”

Comments

One typical characteristic of industries which get eviscerated by new technologies is arrogance. It is arrogance which allows them to dismiss change, arrogance which makes it fashionable within their circle to deny the threat, arrogance which encourages them to keep operating as though nothing was happening. Most of all, it is arrogance which seems to mandate they remain a sitting duck - a big, fat, costly target - while the something new tests, fails, adjusts, tests some more, fails some more, adjusts some more, and typically grows stronger. It happened to the railroad companies when they forgot they were in the transportation business rather than railroading. Automobile companies are the textbook example, but so to are steel producers, airlines, television stations, newspapers, and even the knuckleheads who assemble music and movies. No group is more deserving of having their head handed to them - with the possible exception of Federal bureaucrats, with whom they have considerable personality similarities - than those who work in so-called "higher" education. I'm not going to hit the normal topics - political bias, a laughable work schedule, a nearly criminal dependence on "adjunct" talent - because you already know about those topics if you've read this far and have already reached your own conclusions. I speak only to arrogance - the kind that confused degrees with "smarts", the kind that assumed their self-evident wonderfulness would keep the masses writing college checks pretty much forever. The big miss of higher education - IMHO - is the failure to anticipate how the world is changing. It's not merely a big miss, it is an astoundingly ginormous huge miss. Most colleges missed how the economy would change, how careers would be redefined, how mobility and mobile devices would cut through decades of business and social practice. They missed the threat and the promise of global competition, the sudden disappearance of whole categories of jobs and opportunities, the sudden appearance of others. And they doubled-down on these ghastly oversights with additions to expensive overhead - more buildings, more facilities, many more admin types, lots more overhead. Most colleges chose - at precisely the time the underlying economy was generating fewer dollars that could be sent their way - to increase their costs and thus increase their prices. Such policies do not suggest that the management of higher education is as smart as they claim. So it's not being liberal or conservative or merely enabling that set the table, as I see it. It was being profoundly, enormously, catastrophically wrong about the direction of the economy and the society that was their biggest flaw. In other words, the very thing they were supposedly equipped to see - the future - snuck up on their butts and is now cutting their throats. Couldn't happen to a more deserving bunch - though the costs of their failure will do incredible damage to our lives for at least a couple of generations - and maybe longer. The only reason for any joy whatsoever in seeing the vast contraction that is heading toward the education business is that the current band of incompetents will no longer be able to do quite so much damage. Those that follow may be just as bad - or bad in different ways - and do just as much harm. But the current bunch has proven unable to deal with change - not merely to deal with it but even see it coming - and for that they've earned a quick exit. Their symposia and studies and multi-colored robes and badges are an indulgence we can no longer afford. They've priced themselves out of the market.
EB. To read a well thought out and structured comment is a joy Thank you!

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Posted by: Stuart Butler

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