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Colleges and Universities Can Survive, Thrive and Win
TLDR: Colleges and Universities must be fully engaged mentors and coaches, whose primary goal is to keep students relevant throughout their careers. Create a customized student experience that creates sustainable career relevance. Embrace the unique ability to be ‘World Class’ innovation incubators for fostering portfolio building around dynamic in-demand soft and hard skills. Engaged lifelong learners will result in repeat customers paying tuition which will increase EBITDA and alumni giving.
The Credit Agencies are Sounding the Alarm
According to Moody’s rating services, the 2019 outlook for higher education remains negative with continued low net tuition revenue growth. Both S&P and Moody’s rating services predict the negative outlook for the sector will continue if colleges and universities do not change their business model. Over the past few years public, private and independent colleges have started to consolidate or close. EducationDive.com Staff writers have put together the following charts that represent the changing landscape. (1)
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Mitchell is correct that mergers will not guarantee that the integrated college or university will be sustainable in the long run. Parents and students are becoming more disillusioned and disengaged with the prospect of taking on debt for higher education. According to the 2019 Gallup Inside Higher Ed Survey of College and University Admissions Officials,Gallup asked, “Thinking back, please indicate how concerned you were about meeting your institution’s new student enrollment goals this year.(2019)” (3) The answers represented in the chart highlight the anxiety of admissions officers.
Current headlines don’t create confidence in the system.
References to past studies concluding that earning a traditional college degree will create economic advantages in the long term, may not hold in today’s continuous learning economy.
Colleges and universities will still be vital if they pivot
The hiring skills gap is growing. In July 2019, the number of unfilled jobs reported by the U.S. Department of Labor Statistics (BLS) was 7.2 million. So, what do the numbers mean and where are the skills gaps?
Increase In Customer Facing Jobs
Customer-facing jobs, such as jobs found in the retail and service industries, continue to have the most significant increase in unfilled positions. The largest employers in most states are companies that hire customer-facing employees.
Increase In Hybrid Jobs
The second area of growth in unfilled jobs is hybrid jobs that require a combination of digital, technical, business, and soft skills. According to the World Economic Forum, the top 10 skills for 2020 are soft skills. (7)
Why are Colleges and Universities so disengaged and not claiming their ‘Superstar Potential’ in a knowledge economy?
In Corporate America, employee disengagement results from actions by the top Senior Leaders. It should be no surprise that stakeholder disengagement and related problems in education begin with the Senior Leaders at Colleges. Colleges and universities have a tradition of focusing primarily on attracting high school graduates. That made sense when a college or university education was typically a one-time event to get credentials for career success. The work marketplace has changed and there’s a broader student base, which is not being adequately addressed by colleges and universities. Failure to address this reality causes them to view the enrolled student base as a shrinking market vs. a growth market. So, why do the majority of colleges continue to get it mostly wrong, and how can they correct course to engage students, parents, employees, and employers for institutional sustainability.
The Traditional College system is Killing Creativity and Innovation
According to Vijay Govindarajan, Coxe Distinguished Professor at the Tuck School, there are three boxes of innovation: Linear Innovation, Non-Linear Innovation, and Future Innovations. (8) Colleges and universities have spent many decades perfecting the art of training students to enter the workforce as Linear Innovators. These are the leaders that keep the processes optimized and ensure a well-oiled machine. The higher the degree, the more students learn accepted best practices for performing their job. These experts add significant value in evolving systems but don’t perform as well when systems require rapid transformation.
Govindarajan says to be creative and innovative, this group of workers has more learning and dogma to forget to assure that they:
Unfortunately, top colleges and universities start rewarding one path more than another during the application process. The AP or IB paths, high grades, and top test scores are the benchmarks for entry into top tier colleges that have the most research tools and opportunities for PBL (project based learning). So even though most of the students I spoke with at a recent career day knew that disruptive technology existed, they did not have faith that broadening their learning journey horizon into other areas would help their chances of acceptance into top colleges. Prepared and competitive students know that non-linear innovation and approaches are not valued by the gatekeepers: Admissions Officers and Admissions Committees. The students are correct. The yearly college rankings focus on acceptance tied to “academic rigor,” grades and test scores for rankings, not the skills measured and valued by Corporate America.
Colleges and Universities must address the issue of how the admissions’ practices can change to support Authenticity, Creativity, and Innovation. Stop the race of attracting and giving scholarships only to students that have multiple AP and IB courses and top test scores. Give students the chance to be authentic and pursue other areas. Colleges should embrace and encourage educational diversity. Value students that take a combination of vocation, random electives, earn corporate open badges and certifications and core curriculum classes. Embracing diversity and inclusion does not mean adopting another siloed formula around the right number or type of badges combined with vocation, electives and IB and AP courses or the ‘right’ portfolio. Thought leaders are authentic, not prescribed.
Why colleges must care about Inclusion and Diversity of thought: Corporate America is winning with Diversity and Inclusion according to McKinsey.
Corporations are serious about diversity and inclusion. Several corporations are diversifying their workforce candidate pool by ‘blinding’ candidates’ alma maters when reviewing applications. “Birds of a Feather, Flock Together,” is a competitive disadvantage. A group of Ivy League educated executives who think alike, value, and reward the same type of rigor and achievement are unlikely to connect with a global client base made up of different minds, cultures, and experiences.
Companies in the bottom quartile both for gender and for ethnicity and race are statistically less likely to achieve above-average financial returns. These companies are lagging rather than merely not leading. (McKinsey) Corporations that want to lead will hire employees from colleges that embrace authentic diversity of thought and experiences.
Colleges must pivot, starting with the admissions process. Diversity of thought through different life experiences and educational tracks, should be a critical part of the education admissions process. For those who will counter that colleges must stick with their traditionally defined high level “standards” around test scores and grades for quality students, EY’s 2015 Global HR study speaks for itself.
‘No evidence’ that success at university is linked to achievement in professional assessments.’ ( EY Global) First and foremost, parents and students expect a correlation between college success and professional job success.
Lack of uniformity of standards
It’s no wonder that new collar workers can get hired more easily. When an employer evaluates verifiable corporate certifications or open badges, they know what skill level the candidate has obtained. Colleges routinely do not accept college credits from other colleges because their introduction to ‘whatever’ subject is different. Employers, parents, and students should know what the accepted standards are for primary, foundation, intermediate, or advanced courses. All of the core curriculum courses should be clearly defined and transferable between colleges and universities
Global companies hire employees from universities around the world. The lack of even minimal standardization in U.S. colleges hurts student competitiveness. Employers don’t know what skills they are hiring as they compare a degree from one college with another college. As the practice of ‘blinding’ the college attended by students becomes more prevalent, prestige is becoming less valuable than badging and portfolios. Students that want to achieve a competitive advantage are focusing more on badging and building strong portfolios.
While some colleges are offering Open Badges and similar credentials, many are credentialling non-hirable skills. Colleges and universities continue to measure and reward what is important to colleges and universities rather than what is valued by future employers. This disconnect between corporate needs and those of higher educational institutions practices fosters the devaluation of education
Colleges and Universities must address the lack of standardization. Collaborate as leaders and get out of the red ocean of traditional education and into the blue ocean of credential stacking. The first step is to rethink the 4-year degree or marking time requirements. Hard skills have a short shelf life in a disruptive and transformative environment. The traditional educational structure is not currently suitable to handle continuous change or continuous learning.
Why Colleges and Universities must embrace revenue over tradition: Failure of colleges to pivot is the only reason corporations have stepped into the education lane, and corporations are capturing income opportunities from colleges. Groupthink and ‘tradition’ need to go. The knowledge economy requires that students will be enrolling and investing to upskill multiple times during their lifetimes. The current economy is the ‘GOLD RUSH’ era for colleges and universities that embrace standardization of core courses, credential stacking, and continuous learning.
Failure to embrace technology in teaching
While Corporations have embraced technology and automation to stay competitive in a disrupted Global Economy, many colleges and universities have avoided doing the same. Colleges continue to act in ways that create unsustainable balance sheets of red as they stubbornly resist efforts to address their most significant expenses; tenured professors, and the cost of ‘headquarters’ buildings.
Colleges and Universities must use technology to provide a customized student experience: Technology allows colleges and universities to customize the education experience. Offer hybrid learning opportunities in the core curriculum and hard skill courses. Offer online badging and certification with prerecorded lessons and social learning discussion boards. For students who would prefer professor interaction, offer online courses that have live interactive webinars with discussions and scheduled one-on-one meetings with the professor via video. Let professors and students who prefer the classroom experience choose to go to class. Harvard Business School’s online programs report average completion rates of 85 percent. Creating hybrid learning experiences that allow remote learning will engage more students and most likely increase course completion.
Offering a customized experience will necessitate a change in the number of physical classrooms and professors needed. This will have a positive impact on college and university balance sheets. Actively embracing technology will require many professionals to acquire more robust digital skills. Professors will need to upskill to best practices for delivering interactive content online and running the equivalent of an engaged Facebook Group. Colleges will be able to expand collaboration on group projects through specialized group pages or discussion forums within the online class to create portfolios for future employment opportunities.
Why Colleges and Universities must embrace different methods of delivering instruction: Students of all ages are looking for quality of life, and that includes quality of their educational life which will now be a continuous part of their long-term career sustainability and success. Corporations know that flexibility in the workplace is the number 1 perk for attracting and retaining top talent and next-gen leaders. (Gallup) Colleges and universities must embrace flexibility in learning as a competitive advantage for attracting top talent, next-gen leaders, and repeat customers. Repeat students will increase EBITDA.
Refusal to understand that the Alumni Donor funnel is getting ready to be permanently changed and broken
Disrupted alumni are weakening the future donor pipeline. More than half of workers over 50 lose longtime jobs before they are prepared to retire, according to a recent analysis by the Urban Institute and ProPublica. Of those, nine out of 10 never recover their previous earning power. As stated earlier, “There has been an uptick, for the first time, that recent college graduates are more likely to be unemployed than the rest of the U.S. workforce.” (DataTrek Research) Younger alumni are not going to save the donor pipeline. Unemployment, underemployment, and huge student debt burdens will continue to hamper the ability of alumni of all age groups to accumulate wealth.
Why Colleges and Universities must fix their broken Alumni Donor funnels: Colleges and Universities that offer micro-certifications and micro-masters that help people get paid will steal alumni allegiances. The top colleges are receiving the majority of the large donations and your alumni money by offering online classes through edX and other platforms. Failure by colleges and universities to pivot allows others to fill their pipelines with their alumni and your alumni.
Colleges and Universities Must Embrace Their Role as Lifelong Career Coaches
According to Gallup’s State of the American Manager report, one in two employees has left a job to get away from a manager and improve their overall life at some point in their career. Authoritarian Leaders are out. Engagement begins with Leaders that know how to Coach and Mentor. Colleges and universities that support soft skills training for Professors to become better mentors and career coaches for both traditional students and continuous learners will have a competitive advantage.
Successful innovation and transformation thrive in corporate environments that have team members and leaders with strong soft skills. Unfortunately, soft skills are the hardest skills for corporations to find.
Colleges and universities that pivot to a form of hybrid teaching that combines credentials stacking with projects and innovation incubators will help students develop and continuously upskill their soft skills along with their hard skills. Innovation and transformation increase global competitiveness and multiplies corporate EBITDA and also the EBITDA of colleges and universities.
Colleges and Universities Have All the Tools to be ‘World Class’ Innovation Incubators
The first step needed for colleges and universities to create world class innovation incubators is to transcend from the mindset that students are required to earn passing grades around project rubrics and set outcomes, or fail. Innovation is not supported by approaching everything the same way over and over again. Believe and embrace the mindset of ‘innovating and failing and innovating again’.
Corporations can set up great incubators. In contrast, because of their ability to pull together worldwide resources dedicated to research and innovation, colleges and universities are best suited to establish “World-Class” Innovation Incubators that are truly global in scope and thought. To be successful colleges and universities must embrace the equivalent of the Leonard da Vinci school of thought; He learned from everyone about anything that interested him and tried to figure out everything.
True innovation involves a cross-section of subject matter experts (SMEs). Colleges and universities have cornered the market on employing and accessing the broadest and most diverse group of SMEs. Diversity and inclusion of multiple prospectives are important throughout the innovation process and the process for finding solutions to even the most complex global issues.
If your college or university is ready to execute on a plan to do the intelligent work now, and to engage key stakeholders book a call.
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Scope Mergers & Acquisitions are initiated to transform a company. Successful transformation requires initiating a cultural transformation.