Three Ingredients for Higher Education Survival

In his recent well-crafted article, “Higher Education Seeks Answers to Leaner Years,” Jon Marcus of The Hechinger Report has provided a resonant clarion call for higher education leaders. Marcus quotes one administrator who acknowledges that, “We inherited a system largely conceived in the 1960’s … but times, society and students have all changed dramatically.” Marcus describes an industry wide seismic shift that continues and has not yet resolved.

So where this is all headed might not be apparent for quite some time. What is clear, however, is that the current model for providing education and degree qualification is facing huge decreases in demand and rising costs of doing business well above the level of inflation. Those two market keys signify that higher education is no longer viable in its current form. The question with which schools must wrestle is whether they are Blockbuster Video or Old Spice.

Blockbuster Video was entrenched in its video rental model and was late to the digital subscription market. While Netflix was skyrocketing, Blockbuster stores were closing. Old Spice, on the other hand, while remaining true to its core product, recognized it was outmoded and revamped to communicate with its next-generation market, successfully building market share. Blockbuster’s product was no longer desired in the market. Neither was Old Spice’s. Blockbuster didn’t adjust quick enough. Old Spice did.

Jon Marcus observes that one currently effective maneuver for universities and colleges is merging in order to reduce costs. While this does relieve some of the market pressure, mergers aren’t changing the game enough to keep up with the changing market. They offer a Band-Aid for institutions that can participate, but are not a resolution. While the next generation model of higher education may not yet be easily identified (if it was easy, everybody would be doing it), there are three key ingredients that I expect will be part of the recipe for survival and success:

  1. Recognition that the market is changing — building market share is one approach, but if the market is changing so rapidly and so significantly that it really becomes a new market altogether, then building market share in a dying market is pointless. New wine doesn’t work in old wineskins.
  2. Agility and ability to change — only those that are able to change quickly will be able to weather the changing market. Those that are slow to recognize the urgency or that require more time to retrofit will likely dry up before they can implement the next model. Those who move to new wineskins quicker will have a much better chance of being able to make new wine.
  3. Proper planning for implementing the core in the new era — those that stick to their core (mission) and recognize how to implement it and bring that core to market will have an excellent opportunity to find a seat when the music stops. What’s inside those new wineskins matters.

The temptation for higher education leaders — more so now than ever — is to chase what appears to work for someone else. The recipe for success in next-gen higher education will likely not be found in following the leader. That works in a booming market, as there are always some crumbs that fall from the table, but it doesn’t work nearly as well in a shrinking market. Thus, as it has always been in any business, success is usually associated with providing a quality product that is needed and that is presented well to those who need it.

Christopher Cone 2016


Dr. Christopher Cone serves as President of Calvary University, and is the author or general editor of several books including: Integrating Exegesis and Exposition: Biblical Communication for Transformative Learning, Gifted: Understanding the Holy Spirit and Unwrapping Spiritual Gifts, and Dispensationalism Tomorrow and Beyond: A Theological Collection in Honor of Charles C. Ryrie. Dr. Cone previously served in executive and faculty roles at Southern California Seminary and Tyndale Theological Seminary and Biblical Institute, and in pastoral roles at Tyndale Bible Church and San Diego Fellowship of the Bible.

459 reads
1606 reads

There are 7 Comments

Jim's picture

https://www.cnet.com/news/blockbuster-laughed-at-netflix-partnership-offer/

Blockbuster CEO John Antioco was approached in 2000 by Netflix CEO and co-founder Reed Hastings about forming a partnership, recalled Barry McCarthy in an interview he gave to the Unofficial Stanford blog two years ago. I turned up McCarthy's interview while researching a story about why he's leaving Netflix after 11 years as chief financial officer.

"I remembered getting on a plane, I think sometime in 2000, with Reed [Hastings] and [Netflix co-founder] Marc Randolph and flying down to Dallas, Texas and meeting with John Antioco," McCarthy said in the interview "Reed had the chutzpah to propose to them that we run their brand online and that they run [our] brand in the stores and they just about laughed us out of their office

http://www.businessinsider.com/blockbuster-ceo-passed-up-chance-to-buy-n...

Former Blockbuster workers all over the world must cringe every time they hear the words "online streaming" and "on-demand."

That's because back in 2000, Reed Hastings approached former Blockbuster CEO John Antioco and asked for $50 million to give away the company he founded — Netflix.

Antioco, thinking that it was a "very small niche business," ended the negotiations and didn't buy Netflix, which at the time was a DVD mailing service, according to Variety. 

Susan R's picture

The attitude I frequently see is "change is bad", especially with regards to how technology has altered how our society communicates and accesses information. 

Whether or not this is the case is another discussion, but at this point, change is inevitable, and there is no sense railing about it. If higher ed wants to remain relevant, it's going to have to adapt.

The factor I think is going to be most difficult for many institutions is to remain focused on their niche, even to the point of narrowing it. The 'General Store' approach is much less effective in today's market. The current trend is to niche down, and not attempt to broaden your services or appeal. 

Bert Perry's picture

....my grandfather, great uncle, and great aunt all graduated from one, now Western Illinois U.  Back in that day, teaching was an associate's degree, and anybody who made it to the 8th grade was literate...now it's a master's degree within ten years, and....yeah, things don't always change for the better.

Which is to say that the besetting credentialism we have today is one of the biggest issues schools need to deal with.  Either we "go with the flow" and have a lot of people there with little hope of graduating, or we don't and get a reputation as a nose to the grindstone school, risking bankruptcy because the easy cash flow from the kids who are going to leave in two years is not there.  No easy choices there.

Joeb's picture

Except in the Hard Sciences Engineering and Medical Employers don't need people with all sorts of High End Degrees.  On Wall Street one of the entry level jobs for an MBA from the ticket punching schools was the job of being a Stock Analyst.  They used to give these guys and gals a 60 g signing bonus and 100 + gs to start.  

Now they hire people at the top of their class with a BS in business and train them and pay them 70 gs to start and no big bonus.  Companies are realizing they just need someone that can do the job.   

My brother was pretty high up in the Pharma industry and made a quarter mil a year as a Director.  My brother has Masters in Micro Biology from Northwestern and an MBA from Wharton.  At one time he worked at two different companies for two years with a 2 years Severance built in his contract ie when they laid him off they had to give him a half a mil as he went out the door.  

Presently the Pharma companies are dumping  all these people with big degrees and getting some kid right out of college with a BS and train them for a specific job. So people with all these big Degrees from Harvard Yale whatever are a dime a dozen.  My brother is just happy now making half what he did before and having a job besides working at K Mart.  

The only exceptions to the rule are the areas that I cited above.  As Bert has said in other threads people need a trade or skill that fits a specific job.  So Christian and Secular Colleges need to adjust.  I think the days of where you went does not matter as much in the areas outside the Hard Sciences Engineering and Medical.  

So if not involved in the above in my mind learning on line is part of the future along with a short campus stay.  

So the big question is what do the Bible Colleges whose target students are the middle class from a particular group of churches.  As an example Cedarville has a lot of Southern Baptist churches sending their young people to it.  So much so that in 2006 the GARB gave them the boot.  This happened because the Southern Baptist Colleges at the local level are controlled by the State Boards which can be very liberal. Cedarville tapped into a market that had a need and has done so very successfully. 

Now some other Christian Colleges I know of are struggling big time. They may have missed the bus and not have changed quick enough.  To dependent on their feeder churches and Christian schools which are drying up.  So instead of making themselves more attractive to others outside this market.  They have stuck to their old ways and associations as not to offend their old market.  This is understandable to a point but it is also a way to shoot oneself in the foot especially if your revenue stream comes from just tuition 

I now attend a bible study just outside of Trenton NJ with my best man and best friend who grew up with me at my church and high school in Princeton. In this bible study is an Inter Varsity Representative for Mercer County Community College.  At my local community college they have a independent Christian ministry similar to Inter Varsity.  To me unless your taking separation to the enth degree this would be a great place to recruit for Bible Colleges.  Yet with my contacts I have found that certain college recruiters won't recruit there because they don't want to upset their old source of students.  They take this loyalty to a point that it will probably crush a struggling school. 

If someone could comment on this I appreciate their  input.  If these people at these community colleges are committed believers in our Lord why would you not want them at your college.  To me it would be a great opportunity to build them up in a positive way. 

Bert Perry's picture

I am one who has benefited a LOT from remote instruction, and who quite frankly talks with people halfway around the world routinely, but it strikes me that there is some limit to the efficiencies of scale you can get in education--at some point, you need that one on one interaction.  I remember being a math TA as an undergrad, and the lecture/recitation format they used (and the video format other schools used) has killed more STEM careers than anything else I can think of. 

Not that there aren't disruptive changes coming, but I think there are limits.  They are especially keen as I consider some young people I know who really, really, really need little more than another adult inviting them out of their room to take part in family life/chores/etc..  Baumol is a benefit, not a disease, in this kind of case.

Help keep SI’s server humming. A few bucks makes a difference.