Published on 2016/09/23

Unbundling and Rebundling: The Lasting Impact of Alternative Credentialing on Higher Ed

The EvoLLLution | Unbundling and Rebundling: The Lasting Impact of Alternative Credentialing on Higher Ed
As alternative approaches to postsecondary education become more common, the fundamental work of the higher education institution will evolve.

Alternative credentials are changing the face of the higher education space. New, unaccredited providers are appearing on the scene and succeeding. More questions than ever are being asked about the value of the traditional degree, and fingers are being pointed at the cost of acquiring one. Colleges and universities are in a position of having to reflect upon their core product, and how that offering might evolve over time. In this interview, Michael Horn shares his thoughts on how this alternative credential trend is likely to reshape the postsecondary space over the long-term, and discusses whether those changes are a good thing.

The EvoLLLution (Evo): What is unbundling in the context of higher education?

Michael Horn (MH): As usual in higher education, the answer is: It depends. In this case, the definition of unbundling depends upon which level we’re looking. A given class? A degree? From an institutional perspective?

Primarily though, when we’re talking unbundling in higher education, we’re talking about pulling apart the components of a postsecondary degree or certificate. That could mean offering standalone or isolated sequences of courses, targeted job training, assessments separate from instruction, and alternative certifications and credentials. The costs of these components are often much lower than a full degree from an existing institution. And although pulling them apart cannot deliver all of what a traditional college or university does today, it allows for greater affordability, flexibility and customization or personalization.

Many see these attributes as being critical in an era of rapid technological change in the workforce—and are looking to online and mobile course providers as well as new bootcamp programs as the future.

Unbundling isn’t just beneficial for students, though—unbundling can benefit institutions as well. For example, over the past couple decades, most traditional universities have used online program management (OPM) companies to help them develop and offer online degrees. These OPM companies did everything—from marketing and enrollment services to program design, faculty support, and, in certain cases, the technology to optimize performance and deliver a good enough solution for universities.

But as the underlying technologies have improved over the last decade with a plurality of independent solutions emerging for marketing and enrollment, academics, retention, career connections, data analytics and more (these include everything from Helix Education, Canvas and Schoology to Greenwood Hall, Inside Track and Smart Sparrow), universities increasingly do not need to partner with a full-solution provider to move online—and they certainly do not need to reinvent the wheel from scratch.

In the years ahead, we can therefore expect to see an unbundling of the OPM market as traditional OPMs increasingly overshoot in terms of prices and features that a university needs. Already Noodle Partners, where, full disclosure, I am a board member, has stepped in to do just this. The disruptive impact on the OPM market will be significant.

Evo: What are some of the benefits of greater credential diversity?

MH: Let’s put it this way—if colleges and universities don’t create greater access to alternative credentials for their students, then they are at risk for students going elsewhere (to new entrants doing the unbundling). If, on the other hand, colleges and universities do lead the wave and create alternative credentials—likely through their continuing education programs in most cases—then they stand to become the destination for lifelong learning for their traditional students as well as students they never could have dreamed of serving in the past.

With alternative credentials, powered by solutions like Credly, colleges and universities can basically give their students and alums more currency to represent what they can know and can do—a great way of increasing the college or university’s own value.

Creating alternative credentials could also allow colleges and universities to strengthen their ties to their communities, as they create credentials that more specifically represent what those communities need—such as from a regional employer perspective or from a community development or engagement perspective.

Evo: With more and more alternative credentials on the market, how is the value of the traditional degree changing?

MH: The rising demand shows that the market is increasingly questioning the value of a degree in and of itself.

Historically, the degree has served as a signalling mechanism to help employers make decisions about whether to hire prospective employees. A degree by itself though has always been a highly imperfect signal, as it does not denote what a student knows and can do. And hiring remains very imperfect—as evidenced by the failure rate of trying to find the right person for any given job.

In his book The End of Average, Todd Rose writes about how many employers are beginning to look for more precise signals to understand if someone will be successful in a given job. Ryan Craig has also written about how employers—such as Google, Ernst & Young, PricewaterhouseCoopers, and Penguin Random House—are moving beyond degrees and the false positives they produce in the hiring process.

Increasingly other signals are emerging to solve this problem and fill in the picture of what students know and can do—and to help them and employers find better fits. Companies are working directly with providers like Udacity and Knod, where I’m an advisor, where students tackle projects and solve problems directly connected with what they will do in the workforce. New assessment providers are emerging to capture students’ knowledge. And companies are emerging to capture a student’s portfolio of work and help represent that work to employers in ways that allow them to quickly make matches.

Evo: How might alternative credentials precipitate an unbundling of the traditional degree?

MH: Certificates have long shown how alternative credentials can precipitate an unbundling of the traditional degree. To get a Cisco certification, for example, you don’t have to take a course offered by Cisco—or a university. You have to master the skills in question and then demonstrate mastery on an assessment. Where you learn to master those skills is on you. It can be through Cisco NetAcad, but it doesn’t have to be.

The big idea is that the credentialing and assessment function must be separated from the learning itself. Once that happens, it creates lots of possibilities. Credentials can be more discreet and smaller than a traditional degree—so-called micro-credentials or badges. This in turn could allow you to create stackable credentials—credentials that fit together in well understood ways such that students could assemble them together to create a bigger representation of the expertise they have.

If you have just-in-time assessments to determine the awarding of credentials, then you can create a world of just-in-time learning in which students can learn when they are ready and show mastery when they need to—not based on a set clock that may or may not correspond to the progress they need to make in their lives at that specific time.

This flexibility can be key—and quite disruptive to the traditional degree.

Evo: To your mind, would this unbundling be a positive or negative trend over the long term?

MH: This would be a positive trend on balance. Students would have access to lower-cost offerings that they can customize and personalize more to fit their specific circumstances. They also wouldn’t have to pay for things they don’t want or will never use. For example, some students want an accounting credential, but they also have to pay for the football team even if that isn’t something from which they benefit in their circumstance. And for people who still want the bundle, they can of course pay for and benefit from it. There are many people who will not want to cut the cord and go fully into an unbundled world.

That said, there are cautions with unbundling that receive far less attention:

As a service’s architecture becomes modular, its performance becomes determined by the raw performance of its subcomponents, which consequently become interdependent—or re-bundled—as the entities making these subcomponents need to wring every ounce of performance out of them. In other words, as one stage becomes modular, an adjacent stage becomes interdependent.

In education, my sense is that as things like content become unbundled, there will exist a need for subcomponents that bundle things together like coaching, mentoring, communities, personal learning plans, and employer connections, as these areas are critical for student success, but the ways in which they fit together are not yet well enough understood such that there can be clear standards at their various interfaces. Standalone, modular solutions in these areas will struggle to succeed. Creating standards at their interfaces before we know what the standards will be similarly unsuccessful.

Similarly, too few are thinking about how to help students make sense of and navigate this emerging, unbundled world and integrate the modular pieces together in ways that help them carve out a coherent and sensible life path. This is critical because it appears that in a personalized learning future, every single learner will have a custom fit educational pathway.

Just as Dell emerged in the modular age of personal computing to integrate disparate pieces into a coherent whole, the upstart band of online competency-based educational providers—folks like Western Governors University and Southern New Hampshire’s College for America, and other enterprising universities—could certainly emerge to fill this gap.

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Key Takeaways

  • The growth in popularity of alternative credentials speaks to a wider distrust of the value of the traditional degree.
  • Unbundling different aspects of the traditional degree to create more on-demand approaches to learning could make postsecondary education cheaper for students and more effective for institutions.
  • As postsecondary content becomes unbundled, institutional subcomponents will need to be bundled together in order to ensure the programming has maximum value.