Tuesday, November 26, 2013

Should Branch Campuses Consider Separate Accreditation?

Over the past year, I’ve spoken with several people whose institutions are considering whether to pursue separate regional accreditation for their branch campuses.  The University of South Florida did that, just a few years ago, but now I wonder if there might be broader interest in the idea.

In the past, I’ve made a strong distinction between multi-campus institutions, such as the University of North Carolina, where campuses have a relatively high level of autonomy, and institutions with a main campus and branches.  Shared accreditation and curriculum oversight from the main campus are almost part of defining what it is to be a “branch.”  (See my previous posts on branch characteristics; the blog is searchable.)

Nevertheless, I can understand why separate accreditation for branches might be attractive.  As branch campuses become more deeply engaged in their communities and mature as institutions in their own right, they need to provide those courses and programs that students seek.  Separate accreditation might provide relief from arbitrary, unreasonable interference from main campus departments. 

In addition, the most attractive programs on branch campuses are likely to be in business, health care, and education.  In other words, programs that often are accredited at the program level, as well as falling under the broader umbrella of the institution’s regional accreditation.

In many cases, the requirements of program accreditors apply on all campuses, and at times they may be difficult to achieve on branch campuses.  For example, if your business program is AACSB accredited, your branches should meet the same requirements for faculty credentials as your main campus.  If that means hiring faculty with Ph.D.’s in business, it can be very expensive, provided you can even recruit qualified individuals.  Other AACSB limits placed on teaching loads may make it difficult to work efficiently with main campus faculty members, as well.

A third consideration is that more institutions seem to be developing unique programs on their branches.  I don’t believe unique programs necessarily require separate regional accreditation—it certainly didn’t at Ohio University—but maybe there are some advantages to giving campuses more freedom to develop curriculum, without undue interference from the main campus’s process.  I can imagine this being especially true if the branch is in a clearly distinct service environment.

I still believe that branches gain more than they lose by being an integral part of their home institution.  The “brand” supports marketing and recruitment, a single curriculum helps assure quality, and most institutions award the same diploma to students, regardless of which campus they attended.  Much is at stake in a world with heightened competition, and many students care more about program, flexibility and cost than they care about brand.  Leaders should take care about seeking separate regional accreditation, but maybe it isn’t the non-starter that I thought it was.

Monday, October 14, 2013

Where are the Tipping Points?

If you don’t know much about branch campuses, you could be forgiven for thinking that the only innovation in higher education is happening through MOOCs (massive open online courses) or the creation of branch campuses in Asia and the Middle East.  It’s not nearly that simple.

MOOCs will continue to evolve in interesting directions, including the direction of awarding academic credit for course completion and offering badges or certificates for completing a set of related courses.  I find international branches much less interesting, because I think other countries will develop their own programs, over time, and invite American institutions to go home.

More importantly, however, there is much, much more going on than MOOCs and international branches.  The range of online and hybrid/blended programs is astonishing, and no one knows which approaches will prove to be most attractive.  For sure, however, we know that online enrollment continues to grow faster than other categories, and my personal sense is that, when all is said and done, the cost of enrollment in online courses is likely to be much less than the cost to attend a physical campus.  In fact, it won’t surprise me if the price of online general education courses falls to near zero, which would create a budget nightmare for a lot of institutions.

There also are complicating conditions that have all sorts of implications.  The 18-year-old population is declining, which is a negative for traditional enrollment, and that knowledge led many institutions to work harder to attract adult learners.  But, then, this fall there was a nation-wide decline in enrollment of approximately 500,000 students, and about 80% of those were adult learners.  Distinguishing between macro and micro trends isn’t easy!

Moreover, although lots of people worry about the way tuition has increased faster than almost anything else, the implication is subject to debate.  Certainly, the trend for athletic spending and spending on student “amenities” continues to grow, and many institutions continue to take on debt that I believe will become a heavy anchor if competitors begin dropping prices.

In the private non-profit world, a small but growing number of institutions are choosing to dramatically cut their so-called “sticker price,” instead of stating a high price, presumably to demonstrate quality, then discounting that price by 40% or more.  The effectiveness of deep tuition cuts vs. the risk of maintaining the higher rates is yet to be determined.

Finally, there are those pesky accreditors, legislators, and both state and federal bureaucrats.  To me, they represent wild cards that can distort, slow, or speed up change, but they are unlikely to determine the ultimate outcome.  Employers, another important stakeholder, could have significant impact, but I’m not convinced that people in business have any clearer idea of what they really want than do governors and legislators.  All of them would do well to take a refresher course on the difference between causation and correlation.

Remember, tipping points only become apparent after the fact, and in a disruptive environment, risk is high for everyone.  Pay attention!

Friday, September 20, 2013

Getting Strategic With Branch Campuses

How strategic is your institution in considering the role of its satellite operations?  Based on my experience, I’d guess that the answer for most is “not very.”  (I'm not addressing the recent trend of some institutions opening overseas branches, which I assume involve more strategic considerations.)

Typically, branch campuses and other outreach programs were created to serve some relatively specific purpose:  To block expansion of another institution, to respond to political pressure, or (most commonly) to pick up additional revenue.  In that context, branches have much in common with main campus programs for adult learners, as well as those sorts of online programs that represent a cautious exploration, rather than a major strategic commitment.  And none of these efforts has been approached strategically at the highest levels of leadership, at least at most institutions.

Given the relatively radical experiments that we’ve seen in the past few years, it is easy to imagine that cash-strapped institutions might prefer to focus on scalable online programs, investing in course design and student support, rather than considering growth at branch campuses.  Indeed, at first glance, main campus academic units might imagine that online programs will do more for their budgets, depending on how revenue is shared and expenses recognized.  It’s that phenomenon of being drawn to bright shiny objects:  The new stuff seems sexier than empowering growth on the branches.

As I’ve written many times before, the development of branch campuses reflected the technology of the time.  Branches provided a space for faculty members to teach, advisors to offer advice, and so on.  Interactive television brought an additional element of cost effective outreach, but branches remained a relatively straightforward extension of what happens on the main campus, and generally, institutional leaders didn’t expect them to grow all that much.

Today, a comprehensive enrollment strategy might well include new recruitment and retention strategies at the main campus, as well as the selective pursuit of online enrollment from students located almost anywhere in the world.  Nevertheless, I think most institutions will find that branches still bring certain advantages that should be developed, not marginalized.

At least at present, there is a strong argument to be made that blended or hybrid programs are more appealing and tend to produce stronger learning outcomes than fully online programs.  Note also that, with hybrid delivery, commuter campuses can expand their recruitment radius to 75, or even to 100 miles.

We know that adult learners and other place bound students are concerned about flexibility and price, in addition to getting access to the program they want.  All the pieces for a strong branch strategy are in place:  Pick the right programs, develop focused services and an aggressive marketing plan, and provide a facility that is comfortable and includes state of the art technology.

Given the opportunity, branches can attract more enrollment than ever.  Institutions still can seek growth online and at the main campus, but there is no reason to hand over your potential branch enrollment to more aggressive institutions that recognize the hybrid advantage.

Monday, May 20, 2013

Five Concerns That Can Interfere With Branch Campus Growth (Continued)

Last time I wrote about two concerns I have, regarding branch campus administration, if institutions hope to see an entrepreneurial attitude and significant enrollment growth.  These choices stem from not understanding innovation and entrepreneurship, and they get in the way of an outreach mission.

My third concern came as a shock to me, when I began consulting.  Many institutions actually have their academic departments at the main campus develop the class schedule for their branch campuses.  This never, ever works well. When the schedule is set at the main campus, I hear about courses required for graduation that are scheduled at 10:00 am, when the intended audience is working adult learners.  I hear about courses added and deleted, without anyone bothering to tell the branch administration about the changes.  Even worse, I hear about programs being offered without any predictable plan for delivery of required courses, at all.  Stop it!

The fourth concern may be less certain, but it reflects my strong opinion about the importance of establishing structures that encourage collaboration.  I believe it is unwise to have separate units pursuing online and branch campus growth, without some structural element that assures cooperation and cost efficiency. 
Expecting these units to partner in good faith generally will not work.  They need to see each other as collaborators, and there should be financial advantages to the online unit for supporting growth at the branches, through hybrid courses that make use of online content.  Without an executive (not the academic vice president, who lacks the necessary time) bringing oversight, they are more likely to compete than to collaborate.

Finally, in nearly all cases, marketing and recruitment need to be audience specific.  Understaffed main campus offices that are not engaged in the branch communities on a daily basis cannot effectively recruit or make marketing judgments for their branches.  They can and should partner, and the main campus has a legitimate need to insist on consistency of messaging and design, but people who get up every day thinking about the branches, not something else, should lead the principal work.

After more or less ranting in my last few posts, I think it is time for me to take a break and concentrate on other projects, for the summer.  Creating access and opportunity is important, and if I can be of help, either as a consultant or as a coach, please get in touch.

Monday, May 13, 2013

Five Concerns That Can Interfere With Branch Campus Growth

If it isn’t apparent, my recent posts reflect growing concern and frustration with the way institutions administer their branch campuses.  Having spent some years working with online programs, as well as studying the implications of disruptive environments on organizations, I also see important strategic connections between branches and online delivery.

Moreover, virtually every consulting role I’ve filled was at least in part tied to a president who wanted to see enrollment growth at their branches and in their online programs.  Although I’m pleased and impressed that these presidents recognize the potential significance of branch growth, the press of day-to-day crises at the main campus makes it nearly impossible for presidents to personally lead specific initiatives.

I should add that, again in my own experience, provosts or academic vice presidents seem less consistently concerned than presidents about enrollment growth through new audiences.  Deans have been mixed in their engagement, as well, but typically seem most focused on their main campus mission.  (This is not meant as a sweeping generalization, but simply my own too-common observation.  I’ve known and worked with some terrific deans and vice presidents.)

Although this is understandable, given their background and priorities, it means that presidents and branch campus leaders may be on one page, whereas the administrators between them are, at best, less committed to branch growth.  That is just one reason for my belief that presidents and boards should create relatively autonomous units to attract and serve adult learners and others who prioritize cost and flexibility over a residential experience.

With that overview, in this post and the one to follow, I will raise five concerns I have about the way branch campuses are administered that will reduce the likelihood of enrollment and revenue growth.  Similar points can be made about online programs, as well.

The first concern is that branches typically are buried in an institutional structure that is designed for predictability, not entrepreneurship.  The branch structure should allow nimble, quick response to opportunities, assure that branches can offer the courses and programs for which they have local demand, and encourage deep, engaged partnerships with the community served.  Moreover, both branches and online program executives should understand entrepreneurship and be aggressive in pursuit of enrollment growth.

The second concern arises if the budget covering faculty salaries and the delivery of courses on branch campuses resides in the main campus academic units.  Truthfully, this seems so obviously wrong to me that I’m stunned by how often I see it happen. Deans and department chairs need to see clear financial benefit from supporting branch courses, or else they will see branch courses as a drain on their resources.  

Put the academic budget on the branches, and then let units receive a share of the revenue generated, outside of their normal operating budget.  If you choose to pursue responsibility-centered budgets, which I endorse, treat branch campuses and online programs as revenue centers, not as service units.  The dollars still can eventually wind up in the academic units, but it is those units that are serving the branch audience, not the branches that are serving academic units.

Next time, three more concerns!

Thursday, May 2, 2013

The How of Disruption in Higher Education

I have not written about innovation or disruption in higher education, on Creating the Future, for a while, although I do write about it on my branch campus blog.  This post will be published on both.  (The blog addresses are www.branchcampus.blogspot.com and www.drcharlesbird.com/creatingthefuture.)

I’m intrigued by the rapid progress of MOOCs (massive open online courses) and other online options, but the trigger for this post is the pushback we see, especially from some faculty members.  The defense of traditional classroom education seems disingenuous, appearing to suggest that all faculty members create vibrant learning environments and transform students into sophisticated critical thinkers, even as students also acquire undefined benefits from the residential experience.

Actually, there are remarkable professors out there, and I know full well that important growth can come through the traditional experience.  The issue is how consistently this happens, whether we might find less expensive ways of creating these experiences, and whether the level of debt students are taking on is worth the gain (still undefined and unmeasured).

That said, I also think many defenders of the status quo fail to understand how new developments will disrupt traditional higher education.  Remember, disruptive improvements begin by serving current nonconsumers.  In this case, they attract audiences that are unserved or poorly served by traditional options.

In the case of higher education’s future, like it or not, the issue is money.  Residential education, specifically, has become so expensive that nearly all non-elite institutions fail to cover their cost of operation, especially given declining state support for public education, without extraordinary increases in tuition.  What some have called an “arms race” to compete for students has gone too far. 

The result, as I’ve written many times, is that many institutions require the revenue from branch campuses, online programs and other sources, to survive.  If the “primary” activity is going to lose money, then something else has to offset that loss.

To cause disruption, it isn’t necessary that most students turn to MOOCs or other low-cost options.  All that has to happen is for main campus financial losses to grow larger, and for enough nontraditional students to choose lower cost routes to their goals, to cause many institutions to begin a slide into oblivion.  Add in the developing trend of some employers to value the credentialing of skills over degrees, and we have the opportunity for disruption.

Once institutions pass the tipping point, change will seem to come quickly, but the reality is that it is happening across a much longer period of time, as a result of traditional campuses over-reaching.  This is why second- or third-tier institutions will suffer the most.  Elite public and private institutions will be fine, although they will need to make some adjustments.

Finally, when critics attack new delivery options, especially with regard to quality, they essentially are attacking a straw man.  Disruption moves upstream, from serving nonconsumers to serving traditional consumers, by improving quality through experience.  I believe our culture values education, and few are addressing how the “psychology of going to school” will impact choice.  Nevertheless, even if many people prefer a traditional, residential education, institutions have an unworkable financial model that seems ready to collapse.

As always, leaders who understand how to empower branch campuses and online programs for entrepreneurial outreach have the advantage.  Some institutions will thrive, but to do so, they must understand the challenge.

Monday, April 22, 2013

Revisiting Revenue Sharing and Entrepreneurship as Tools for Branch Campus Growth

The second most viewed post on this blog is titled, “Revenue Sharing and Support for Branch Campus Growth.”  (http://branchcampus.blogspot.com/2010/02/revenue-sharing-and-support-for-branch.html).  I tend to write shorter, more focused posts, these days, but so it goes.  Among other things, I described the approach to funding in Ohio, which worked well for a very long time.  Unfortunately, recent changes may make things harder for university branches; I am concerned about the long-term implications for enrollment.

In the same month, I also wrote a post titled, “On Being an Entrepreneur in Higher Education.” (http://branchcampus.blogspot.com/2010/02/on-being-entrepreneur-in-higher.html)  That post stemmed from my frustration with institutional leaders who claim to be entrepreneurs, but do not appear to understand what it means to empower innovation, especially in a disruptive environment.

Good information is available on how to develop and empower strengths-based teams that can release energy and creativity in organizations.  There are people who really “get it,” and they are more likely to be found on branch campuses and in those units that have experience in continuing education or lifelong learning than in the offices of those whose career focus has been within traditional academic units.

I do not question the good intentions of presidents, vice presidents, and deans, but in typical academic fashion, too many try to be “innovative” or “entrepreneurial,” without ever talking seriously with people who have been there and done that.  It’s frustrating, in part because I believe there is a lot at stake for most institutions.

Entrepreneurial efforts are intended to develop products and services that will attract new audiences to the institution or that will significantly change its competitive position with existing audiences.  Therefore, units charged with innovation require autonomy to allow flexible, quick engagement with audiences and partners, as well as the ability to make investments consistent with their rate of growth.  When universities bury these efforts in their colleges or hinder their progress with policies and practices that are inconsistent with speed and responsiveness, innovation will proceed slowly, if at all.

I think most institutional leaders would be well served if they think of their institution as a kind of holding company, with a variety of businesses, each of which can and should be managed on its own terms.  (I know some people don’t like business-related metaphors, but I’ve long since stopped worrying about that.)  Each “product line” requires structure, policies and practices that enable success within its own market.  Each requires leadership that understands the specific mission, the competitive environment, and the elements of a successful strategy.

That’s not to say that leaders shouldn’t insist on appropriate internal partnerships or that some activities and services shouldn’t be centralized, but the effort should emphasize the word “partnership,” and should serve the legitimate interests of each partner.  (With respect to academic programs, I’m suggesting that faculty still should lead and oversee program development and quality, but decisions about offering programs at branch campuses or online should be market driven, and processes for program development and approval should be streamlined.)

Give branch campus leaders an opportunity, and many will understand how to engage with their audiences in a high quality, high touch way that can succeed.  Keep them under the control of mid-level main campus administrators, and they will not be able to compete effectively with newer options.  Force innovative initiatives to fit within your academic, financial, human resource, and political traditions, and you will be on a very dark road.

Monday, April 1, 2013

The Accelerating Rate of Change in Higher Education

A few years ago, I wrote a piece for this blog titled, “Rate of Change and Predicting Which Institutions Will Thrive in the Future.”  You can find it at http://branchcampus.blogspot.com/2010/05/rate-of-change-and-predicting-which.html.

The post was based on a quote from Jack Welch:  “I’ve always believed that when the rate of change inside an institution becomes slower than the rate of change outside, the end is in sight.”  Sobering words, but the logic is compelling.  Over and over again, we have seen that established organizations in a wide range of industries lose out to more innovative, nimble organizations with an idea that disrupted the status quo.

I am revisiting this topic, because the rate of change in higher education clearly accelerated in recent months.  The stories are stunning, as the availability of MOOCs and other online options are expanding.  The emergence of “free” courses has rapidly spawned remarkably low-cost options to turn those non-credit experiences into credit-bearing courses; we see more interest than ever in credit for prior learning; and we see a move toward awarding credit and degrees that are based on competencies, rather than on completed coursework.

I could go on, but I no longer have any doubt that higher education will forever be changed.  As I’ve written before, the problem for most institutions is that their traditional, residential programs inevitably lose money, in large part because of the nearly insane competition to expand amenities.  However, if you want to see real confusion about the challenge of serving traditional audiences, while encouraging innovation and attracting new audiences, look at state-level policy makers and boards of trustees.

Here’s the rub:  The institutional financial engine requires increased income from non-residential audiences.  I believe those audiences will be drawn to online or branch campus-based hybrid programs.  Unfortunately for the institution, those students will have excellent options to meet their needs that will be very low cost.  Established institutions will find it difficult to charge enough tuition to meet their broader financial needs, unless they have a very special brand.

We don’t know yet just which of the emerging options will be most attractive to students.  For myself, I wonder exactly how the psychology of going to school will interact with the efficiency and cost advantages of technology-driven choices.  How will students combine various modes of delivery and learning to create what may well become customized lifelong learning portfolios?

I anticipate that students will chose different delivery modes for different purposes and topics, depending on their strengths, interests, and life circumstances.  Degrees may actually become less important than building a portfolio of competencies, although adult learners may aggregate such competencies, add some missing pieces, and eventually claim their diploma.

Monday, March 18, 2013

More Attention From Institutional Leaders May Not Benefit Branch Campuses

Through most of my career, I both enjoyed and benefited from the fact that people at the main campus paid little attention to their branches.  For all the frustration and difficulty of getting programs or courses approved, the circumstances worked to our advantage.  In addition, because we were financially separate from the main campus, we developed a deeper understanding of higher education finance than most of the chairs, deans and vice presidents with whom we worked. 

(Not bragging; just sharing the facts.  My experience with finance or budget administrators really was no different, because they tend to focus so strongly on cost control and risk avoidance that we found negotiations usually worked to our advantage.  Keep in mind that I am a devotee of mutual gains bargaining, so our success was mostly a matter of careful listening and addressing the interests of others, but with a strong understanding of our own interests.  Thus, it was the lack of others’ understanding of our interests that gave us an advantage.)

I’m saying this, because I am concerned that “flying under the radar,” or being “out of sight and out of mind” have become liabilities.  Branch campuses, along with online learning programs and main campus programs for adult learners, can best serve their institutions if they aggressively pursue an entrepreneurial tack.  Being entrepreneurial and highly service oriented tend to be natural for people who have served for a long time on branch campuses.  Bluntly, however, although I meet a lot of institutional leaders who talk about entrepreneurship, I meet very few who really get it.

Given the growing importance of outreach types of initiatives, we can expect institutional leaders to take more interest in branch campuses.  However, to the extent that they do not understand the mission, the student populations, and other elements that make branch campuses a unique form of delivery, branch leaders can expect some unfortunate choices to be made at the main campus.  Put another way, if main campus administrators do not understand the interests of branch students and communities (i.e., do not understand what they value or how they make decisions), those administrators will make assumptions that are off the mark, leaving the branch all that more vulnerable to competitors.

All of this makes me believe that the need for good research and literature on branch campuses will only increase.  It also suggests to me that the main campus individuals with oversight responsibility of branch campuses need to have a legitimate background in the area, or at least to have strong support people who can deliver good advice on important decisions.  Institutions need their branches and online programs to thrive, but thriving can only occur when there is deep understanding of those adult or non-traditional audiences we hope to attract and retain.

Monday, March 4, 2013

Organizing Thoughts on Delivery and Assessment

There is no question that lots of things are happening in higher education.  New programs and new strategies show up at a rapid clip.  As you think about the future, you will necessarily make choices about course and program delivery, and those choices will have a major impact on how attractive you are to prospective students.

Consider this range of possibilities for delivery:
·      Face-to-face in a traditional classroom
·      Synchronous delivery with some students in the same classroom as the instructor and others participating through interactive video
·      Hybrid delivery, which may include asynchronous streaming videos, online elements, and occasional classroom meetings, which themselves can occur in a variety of forms; this might include use of the “flipped classroom,” which offers significant creative opportunities
·       What I’ll call “traditional” online, with an instructor teaching 15-25 students
·      Scalable online, enrolling, say, 75-300 students in each course, with one instructor and facilitators supporting smaller “sections” of students
·      What I used to call “massively scalable” courses, with a thousand or more students per section, but still supported by a team of facilitators, working under the supervision of a faculty member
·      Massive open online courses (MOOCs), sometimes with more than 100,000 students enrolled, usually for free, but typically not offered for credit

Now, consider how students might be credentialed for their work:
·      Traditional grades, leading to a degree
·      Traditional grades, leading to certificates that document specific skills and experiences
·      No grades, but the awarding of a badge (similar to a certificate) or a certificate of completion; students might receive traditional course credit through some additional process, probably for a fee
·      Recognition of prior learning and the awarding of academic credit for that work

And how might we assess student learning?  How about:
·      Traditional exams, projects and papers, perhaps with exams taken at a testing center
·      Portfolio assessment
·      Demonstrated competencies

Then, how will institutions generate revenue or otherwise cover their costs?
·      Through tuition, fees, state support, and endowments
·      Employers pay a fee to access resumes of top course/program completers
·      Content producers, such as Coursera and Udacity, license high quality course content to institutions, which then provide support and flipped classroom experiences to students; colleges and universities can create niche opportunities to do the same, including internationally
·      Industries/employers “sponsor” courses and programs, covering the cost of development and delivery
·      Students pay a fee to have competencies assessed and “certified”

Each of these lists can be expanded, and some of my bullet points may need further description to be clear.  My advice is to read newsletters, surf the Internet, and network with creative people.  I don’t think it is all that overwhelming, explored in a thoughtful way, but it does take time and energy.  Hence the concerns I expressed awhile back about making sure that you focus on the so-called “important but not urgent” items that will create your future. 

As you consider audience, cost, price, content, delivery and support services, you can work your way through the options.  You may well make different choices for different programs and audiences, and your competition will affect what makes sense.  It’s important to be nimble and engaged!

Monday, February 18, 2013

A Leadership Dilemma for Branch Campuses and Online Programs

When I suggest that most institutions of higher education are in trouble, I am in good company.  Many people say the same thing, and most point to the remarkably rapid emergence of very low cost alternatives for earning credits, especially in the lucrative area of general education, as well as alternative ways of certifying learning that tie to the needs of employers.

For example, at StraighterLine, one can earn a full year of general education credits for about $1000, and those credits will transfer to many institutions.  Companies, community colleges and a few universities are breaking new ground by providing free non-credit options that can be turned into transferable credits, through exams that may cost less than $100.  In short, the higher education financial model is breaking down.

Moreover, because leaders are convinced that spending on “amenities,” (athletics, additional buildings, etc.) is necessary in order to compete for residential students, they are increasing the cost of operation, at the same time their traditional revenue sources are under pressure.  With the eighteen-year-old demographic declining in many parts of the country, we are bound to see winners and losers, whether we look at the public or private sphere.

Just at the time that leaders need to reframe their thinking, they are, instead, trapped by the need to save their “brand.”  (And this trap is real.  I do believe that the main campus residential program creates the institutional brand for most universities.  Leaving aside political issues, alumni, donors, and everyone else, it would be foolish in almost all situations to close the main campus.  Thus, presidents and boards are locked into a “loss leader” as the activity on which they concentrate their time.  That’s a classic example of why established institutions struggle in a disruptive environment.)

I hear presidents say they want growth at their branch campuses and in their online learning programs.  Unfortunately, for the most part, they invest very little of their personal time or their political capital to get the point across to vice presidents, deans, chairs, alumni, or others.  Revenue sharing models either do not exist or are ineffectively designed, and few traditional educators understand the audience that chooses to enroll online or at branches.

Bottom line:  We have the perfect context for the emergence of new providers.  If institutions lose general education students, just as one example, it will be tough to replace that revenue, without pricing in a way that makes the competitive situation just that much worse.

Given the rapid engagement of elite institutions in the online market, it makes sense to aggressively identify niche opportunities and to empower innovation teams.  Unfortunately, I don’t see much evidence that is happening.  On the contrary, most efforts at “innovation” are kept on a very short leash, for political reasons, as much as from a lack of understanding.  What we see are linear improvements and incremental change, slowed by complex governance processes, when we need something much more creative.

Monday, February 4, 2013

Two Examples of Emerging Challenges to Traditional Institutions of Higher Education

Today (February 4, 2013), there are several stories in Inside Higher Education that illustrate the point of my last post, and I want to use two of them to express a relatively strong statement of concern.  I simply do not believe that many leaders in higher education understand the train that is bearing down on them.

The first piece is titled, “Free Course, Inexpensive Exam” (http://www.insidehighered.com/news/2013/02/04/free-online-course-providers-pair-credit-bearing-exams).  The story describes the decision of a student to take a free online course, and then receive three credits at his home institution by taking a CLEP exam, for just $99.   The piece then discusses some of the many options that more and more students undoubtedly will choose over paying much higher tuition at a university, or even at a community college. 

The course was a general education course in psychology, and the student makes a perfectly understandable point that it made no sense to him to pay tuition to attend a large lecture class, in which personal attention or interaction would be limited.  However, my own observation is that general psychology is an enormously profitable course at most institutions, as are many other general education courses.  Indeed, a full cost accounting view of most upper level courses at universities would reveal that nearly all are offered at a deficit.  Take away the lucrative general education courses, and it may become impossible to balance a traditional residential institution’s budget.

The second piece is titled, “If a School Adds an Amenity and No One Knows, Does it Really Exist?  ( http://www.insidehighered.com/blogs/stratedgy/if-school-adds-amenity-and-no-one-knows-does-it-really-exist#ixzz2JwPL6XBs).  It caught my attention, because it is a blog post, commenting on a recent study that argues it may make economic sense for institutions to spend more on amenities than on improving academic quality.  (A story on the original research can be found at http://www.insidehighered.com/news/2013/01/29/many-students-opt-colleges-spend-more-nonacademic-functions-study-finds) 

Leaving aside all sorts of things one might say about the implications of this study, my take is that it illustrates another reason that most institutions are in trouble:  They have bought into a war of competition, to fill first-year classes by building the “next new thing” that will draw students.  Regardless of whether the strategy works to attract students, it certainly increases the cost of operations and contributes to escalating tuition.

These pieces illustrate the dilemma faced at most institutions.  In effect, people are working harder and harder to fill their first-year class, with what may well be negative financial implications in the long run.  Some will succeed; some will fail.

The potentially good news is that many presidents and boards now understand the need to create new sources of revenue, and that could be helpful to branch campuses and providers of online courses.  Unfortunately, however, most leaders are trapped by their frame of reference, and outside of those of us with a branch campus or continuing education background, most leaders at traditional institutions do not understand how to build innovation teams and release the power of entrepreneurship.

Next time:  The leadership dilemma