What to Expect in an Era of Disruption in Higher Education

Dr. Jim Black

Dr. Jim Black
President & CEO of SEM Works

The following is an excerpt from a Dr. Black’s forthcoming book, Managing the Student Enrollment Obsession. The book is expected to be released in the fall of 2018.

Fortunately for higher education leaders and enrollment managers, the academy is not the first to undergo a disruption. Therefore, you can benefit from the lessons learned in other industries. An overview of relevant industry lessons is presented herein.

There is an old African proverb that states, “The animals on the Serengeti begin to look at each other differently when the waterhole begins to dry up.” This proverb can be viewed as a metaphor for a dwindling customer base in other industries and a shrinking pool of students in higher education. In these scenarios, the natural consequence is heightened competition. So, expect and plan for more intense competition for a limited pool of students than your institution has experienced to date. To gain and sustain competitive advantage in this emerging environment, your institution must innovate, invest strategically in the initiatives and programs that matter most to your potential and current students, remain true to your mission and leverage institutional strengths to the degree possible, and focus on delivering a value proposition that aligns with the needs of the market (e.g., preparation for academic, career, and life success).

Expect an increasing number of alternative educational providers. Given the growing credibility and adoption of online learning by for-profits like the University of Phoenix that enrolls some 200,000 students or free online courses delivered by edX for elite institutions such as Harvard, MIT, and the University of British Columbia, these online providers present a legitimate threat to lesser known brick-and-mortar campuses, even those that offer an extensive array of online courses and programs. Specialized providers, such as coding boot camps, also have entered the higher education landscape.

For most of these organizations, their business models were designed from the ground floor up to offer convenience, flexibility, affordability, and streamlined pathways to the credentials sought-after by the masses. Moreover, their offerings are often scalable—something that traditional institutions have struggled to emulate. The ability for students to bundle educational credits across a variety of educational providers will further accelerate the expansion of this trend. The good news for traditional colleges and universities is that they often possess a superior quality product as well as the required technology infrastructure and instructional expertise to compete at some level. However, to do so, they must overcome internal cultural barriers, leverage market research to pursue the opportunities that have not been saturated by competitors and build on institutional strengths, and have the will to stay the course when the market opportunities are identified.

While competitive threats abound, they are often symptomatic of more deeply rooted issues within an industry sector, including higher education. New competitors typically rise from the smoldering ashes of a troubled sector, where gaps and thus, opportunities exist. Other lessons learned from industry disruptions made possible by competitive gaps and opportunities consist of the following:

  1. Determine what the customer craves and deliver it. 
    In the case of college and university students, there are limits. Balancing student wants and desires with what they actually need to be successful students and engaged citizens can, in fact, be extremely challenging. “The customer is always right” philosophy practiced by many businesses simply does not fit with the mission of postsecondary institutions. Instead, the role of educators is to advance and apply knowledge, facilitate the exploration of ideas, foster cognitive dissonance, prepare students as lifelong learners and productive workers, and even hold them accountable for their actions or inactions. Ideally, the college experience should be transformational — helping students become the best person they can be. With that said, failing to align teaching methods, curriculum, academic programs, and institutional services with the needs and expectations of students is a perilous path.
  2. Create unexpected value. 
    Incumbent institutions tend to focus on known problems (e.g., student attrition causation factors, poor service delivery, cumbersome processes, undersubscribed programs, insufficient class availability). True disruption seldom occurs in this space. Creating value where it did not exist before or was not expected spawns disruption. In the private sector, such intuitive value ideation is seen in Disney’s “Imagineering” the attractions in its theme parks, Apple’s invention of the iPhone, and Airbnb’s alternative to staying with the multitudes at expensive, disturbingly uniform hotel chains. This is what the authors of Blue Ocean Strategycharacterize as swimming in the “blue ocean”, where there are few, if any, competitors (Kim, W. C. & Mauborgne, R., 2005). No disruptor is found in the “red ocean” crowded with similar competitors.
  3. Avoid being average. 
    If your school is one of the elite, well-known few, with highly selective admissions, it is not average. However, the vast majority of colleges and universities do not fit this profile. They have to find other ways to distinguish themselves. A capstone student experience, an innovative curriculum, guaranteed internship placement or study abroad, digital career portfolios, or a unique pricing model represent just a few examples. While it would be ideal to find something that makes your institution distinctive throughout the nation or the world, that is highly improbable. A more attainable goal is to position your institution uniquely among your direct competitors.
  4. Identify the potential for expansion. 
    As it relates to student enrollment growth, expansion opportunities are usually found within one or more of four domains: (1) thorough penetration of your existing primary market, where the institution and its academic programs have a strong presence, (2) the introduction of new programs into your primary market, (3) promotion of the institution and existing programs in a new market, and (4) diversification—new programs and new markets. Each domain has inherent risks and potential rewards. Risk levels are illustrated in Figure 1and are described here.

Primary market penetration possesses the lowest risk, requires the least investment of resources, and has the fastest return on investment. Depending on an institution’s primary market, this domain also may produce only modest new enrollments. Option two, mounting new programs in an institution’s existing primary market has risks associated with conducting the proper market research to determine student and industry demand as well as market saturation. Another common risk relates to the degree to which new program offerings are adequately promoted. An obvious upside to this domain is that the institution already has visibility in the market. Taking the current program array to a new marketrequires the time and resources to develop a presence where none has previously existed. Sending recruiters to a new territory once or twice a year is woefully insufficient. Creating such visibility requires a sustained physical presence with area recruiters or alumni volunteers, targeted advertising, networking with schools and other organizations in the region, and strategic partnerships. Finally, diversification carries with it the highest level of risk because it involves assuming all the risks of launching new programs in a market with no prior visibility. If executed effectively, however, this domain can generate an abundance of new students.

Figure 1: Market Expansion Risks

Market Expansion Risks

  1. Disruption always comes at a cost. It is true that your institution may create a disruption by leveraging existing technologies and human capital. Yet, no organization can avoid the cultural and real costs associated with unlearning old ways, creating new programs and business models, scaling innovations, or marketing a new approach. These costs must be weighed judiciously against potential benefits of such a paradigm shift. Once a decision is made to pull the trigger, the change process must be managed carefully with the upfront inclusion of key stakeholders.
  2. Equate disruption with innovation, not extinction. The rise of educational disruptors can be unsettling. If disruption is simply perceived as a threat to the way of life in the academy or ignored, the results will be devastating for many higher education institutions. Conversely, if disruption pushes college leaders and enrollment managers out of their comfort zone and they reinvent their institutions, the educational experience of students will be greatly enhanced. In a time of creative destruction, the winners are those who exert extraordinary efforts to go beyond traditional norms, which is not always the early adopters of a new educational model or practice.

Some industries have witnessed longtime incumbents disappear into the ether. In other sectors, however, this has not been the case. For example, the rental car business has retained the same industry leaders for decades, even though many operational fundamentals have evolved or have been disrupted. Take the core value proposition of rental car companies—how they facilitate a customer’s travel to a desired destination. Not that long ago, rental car agents would provide their customers with a map and sometimes, highlight the directions to follow. Then came GPS. The rental car companies responded by renting GPS devices. Many continued this practice even after smartphones with GPS capabilities became ubiquitous, and the service was no longer needed. In the near future, we can expect rental car corporations to offer self-driving cars, where smartphone GPS apps will not be required. The point is that rental car companies have not gone extinct. They have evolved using technological advances to improve the customer experience. Higher education institutions have similar opportunities.

  1. Successful disruptors pursue four disciplines simultaneously. The four disciplines translated into the higher education lexicon include low costs, relational connections with students, program innovations, and rapid time-to-market. Of these, student connections is the only discipline college and universities excel at consistently. To thrive in a future with a seemingly infinite number of nimble disruptive innovators, educators must compete in the other three disciplines as well.

 

Follow Dr. Jim Black on LinkedIn or visit the SEM Works website.

 

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