Coming Avalanche – Part II

Michael Metzger

Standing still is not an option.

That’s one of several warnings in “An Avalanche is Coming: Higher Education and the Revolution Ahead,” a report detailing the challenges facing the traditional university. Moving to stable ground makes the most sense, but how is that done?

Michael Barber, Katelyn Donnelly, and Saad Rizvi are researchers at the Institute for Public Policy Research in London as well as the authors of “Avalanche.” The nub of the issue is that education is being unbundled. Global competition is taking what schools traditionally offer – content, faculty counsel, and community – and unbundling these products, selling them separately. The Internet is opening the educational market to a range of new players offering similar fare for less cost. This is producing instability.

Until recently, few colleges noticed. Traditional universities operate as nonprofits, in what Jim Collins calls “the social sector.”1 They don’t think like for-profit businesses, where revenues and performance are connected. In business, if you run a crummy coffeehouse, you lose customers. Markets are ruthlessly efficient. Colleges and universities don’t operate this way. Revenues and faculty performance are disconnected. “Most professors at big universities love research, are lukewarm about teaching, and loathe service,” writes Marshall Poe, a former professor.2 This means most schools don’t deliver on content, counsel, and community – but they do stay in business.

Students at top-tier schools hardly complain. They’re not there for content or counsel. They’re there for the networks. Since the 1960s, UCLA’s Higher Education Research Institute has conducted the most comprehensive assessment of the nation’s incoming freshmen. In 1967, 85.8 percent said they’re in school to “develop a meaningful philosophy of life.” In 2003, only 39.3 percent saw that as an important goal. The percentage has been dropping every year. Today, top-tier schools offer what top students want – access to an elite community, or social network.

Lower-tier schools can’t compete. They’re vulnerable in three ways: 1) Content is ubiquitous. You can get essentially the same content from a Dartmouth online course or by attending Dordt College. 2) Access to faculty is equally limited in lower and upper-tier schools. 3) Lower-tier colleges can’t offer elite networks. They’re vulnerable.

For-profit universities were the first to capitalize on these vulnerabilities, making content available online. In the 1990s, the University of Phoenix targeted working adults for whom higher education was inconvenient. They wanted content, not counsel or community. Enrollment grew to 460,000 by 2010. That number has since declined as Congress has stepped up scrutiny of for-profit colleges, but traditional colleges and universities took notice of the online market, especially the potential revenues.

Top-tier universities have jumped on the MOOC bandwagon write Clayton Christensen and Michael Horn, “creating a hodgepodge of these massive open online courses for public consumption.” Even the venerable Harvard Business School has ceded ground to online instruction, with students directed to learning modules on the web.3 But this is imitation, not innovation. HBS is offering what Phoenix offers – online content – while maintaining the system of minimal counsel and networks only HBS can offer. To innovate is to renew, and this requires disrupting the system.

Christensen has long maintained that outsiders are best at introducing “disruptive technologies.” The traditional university typically doesn’t look to outsiders, preferring to work “within fixed bounds,” preserving the integrity of their content but capping the capacity for innovation.4 The Internet is breaking down those boundaries. Outsiders are introducing disruptive alternatives, aiming to renew the original offerings – content, counsel, and community. They include Peter Thiel, co-founder of PayPal.

Thiel Fellowships award 20 students $100,000 over two years to drop out of school and start something innovative. It’s a sentiment similar to one expressed by President Lee of South Korea: “Skip college and go to work.” Thiel Fellowships are “a new breed of learning providers that emphasize learning by practice and mentorship” according to the Avalanche” report. The students receive faculty counsel and work in community.

Another outsider example is The Minerva Project, a start-up headquartered in San Francisco that aims to provide an affordable liberal arts education. The company enlists operators to create mini-campuses around the globe where clusters of Minerva students live and socialize together in residence halls, as well as take online courses and work together on projects. It’s content, faculty counsel, and community.

The “Avalanche” authors conclude that “a new phase of competitive intensity is emerging as the concept of the traditional university itself comes under pressure and the various functions it serves are unbundled and increasingly supplied, perhaps better, by providers that are not universities at all.” Christensen predicts that as students adopt these disruptive technologies, “a host of struggling colleges and universities – the bottom 25 percent of every tier – will disappear or merge in the next 10 to 15 years.”

This is why standing still is not an option. When warned of a coming avalanche, the best move is move – get out of the way. Wise educators will get out of the present model, looking to outsiders to disrupt it and help develop better ones.

Follow me on Twitter: @Metzger_Mike

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1 Jim Collins, Good to Great and the Social Sectors: A Monograph to Accompany Good to Great (Boulder: www.jimcollins.com, 2003)
2 Marshall Poe, “Colleges Should Teach Religion to Their Students” The Atlantic, March 7, 2014.
3 Clayton M. Christensen & Michael B. Horn, “Innovation Imperative: Change Everything,”
The New York Times, November 1, 2013.
4 Clayton M. Christensen & Henry J. Eyring, The Innovative University: Changing the DNA of Higher Education from the Inside Out (San Francisco: Jossey-Bass, 2011)

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9 thoughts on “Coming Avalanche – Part II”

  1. Great article, but I would add that a major problem is that we have relegated education to ‘educators’! Christian leaders (including parents) rather need to jump ‘into the fray’ rather than ‘out of the way’ in the creation & expansion of integrated & effective models.

  2. The university of life is becoming more relevent than the institutional herding preferred by the elite. Open access to some information has broken down some of the divide.
    A key barrier is accreditation of achievement.
    Privileged access to networks of influence demonstrates the dysfunctionality of the system with respect to quality discernment and empowerment. A clear indication that provision of open access and transparency is far from endemic.

  3. Great second post Michael. I hope I can get some of my peers to read it. You are on track. Think only 25% will disappear? Seems like more are vulnerable. At our College (really a community college, though Florida allowed our type schools to drop the “community” and include some bachelor’s degrees), some of us notice…though I think that the local will always be an attraction to some.

    Your point here–“In 1967, 85.8 percent said they’re in school to “develop a meaningful philosophy of life.” In 2003, only 39.3 percent saw that as an important goal. The percentage has been dropping every year. Today, top-tier schools offer what top students want – access to an elite community, or social network” is what I was trying to say in my comment in the last post. That, it was around the 1950s that Americans made a turn away from the traditional college goal of (as you said) developing the mind, a worldview. Yes, back in the 19th century, and especially with the Land Grant schools, the idea of “college as the place to get a job” was emerging, but the majority of schools did not. You nailed it though that since that time through today, most students do not see that they should come to college for anything other than a path to a job. And, that contributes to our problem about the point of college, and if the idea of college no longer delivers on any real value, then the avalanche really will sweep much away.

    Of course, that could be a good thing…. 🙂

  4. Mike Metzger

    Carl – Good points. We’re going to see creative destruction, and that is always a good thing. We’ll pick up this thread next week, when we consider an article Alan Deutschman wrote in 2005 for Fast Company titled “Change Or Die.” If your business isn’t changing, it’s dying. But that’s not correct. We’ll discuss further next week.

  5. The real obstructions to this “avalanche” is requirement that students get a degree to get a job. Granted, students from top universities get top jobs, but a degree from any university is better than none.

    Alternative educational institutions need to become accredited before students will turn to them. The more radical they are, the harder it is to get accreditation.

    As a result, the change we look forward to may be a long time coming.

  6. Mike Metzger

    Tom:

    Your point on accreditation is critical. And yes, this sort of change, since it is institutional, will take a considerable amount of time. I would modify only one of your points. This week’s edition of The Economist lists a series of colleges where the cost of of the degree outweighed any income boost. A degree from any university might not be better than none.

  7. I am right with you Michael. That article in FC was very powerful. http://carlcreasman.com/blog/?p=1682 I wrote about it; I look forward to seeing your thoughts on it. The idea of dying is present in many thinkers looking at higher ed. It was Thrun, from Stanford, the guy who started Coursera who once said he saw a future with only a few (wasn’t it less than 10) institutions of higher ed in the entire world within 20 years. I think he backed down from that prediction, but the idea remains. I will read your thoughts with interest.

    I just can’t get my peers to pay attention, and that is where the real crux lies to me. I blogged about that part here :http://carlcreasman.com/blog/?p=2073

    And to Tom Nesler, you have sir hit on the one remaining bulwark that higher ed clings to. As long as businesses demand that piece of paper, we have some solace. However, the signs are clear that many are shifting gears and I think it is possible that more industries could turn. Right now its mostly in the tech industry, but still…. I won’t say it WILL happen, but I think higher ed clings to that concept just like journalism clung to the notion that “everyone will have to get their news from us.” Turns out, people eventually shifted, over about 1 generation, to accepting “news” from a variety of other sources.

    Business could make that same shift in about the same amount of time—20 years or so–to where they hire someone who can do the job (proven, of course, through some pre-job test or internships or apprentice-type things) REGARDLESS of the piece of paper. Or better (or worse for higher ed people like me), based on a different piece of paper that says the person got classes from iTunes, Coursera, TED-ed, some credits from a community college and some other industry certifications. No degree, but something that looks a lot like one.

    As that day comes, the avalanche will indeed be upon higher ed.

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