Darwin and the Disruption Cycle: Reframing Higher Education's Value Proposition
For-profit institutions have created a more business-like higher education industry, where institutions succeed based on outcomes and service rather than name and prestige.

Many people assert that the for-profit sector is the driving force behind a dramatically changing value proposition in higher education. I respectfully disagree. The value proposition is changing because it can and it should.

Technology is providing previously unimagined tools that support and enhance learning. And the structure of the old value proposition — essentially, place- and time-based programs on campuses with faculty — is simply not able to serve the wide range of learners’ needs to succeed with an increasingly diverse learner force. Clearly, some for-profit institutions have played a role in changing the value proposition to date. They were in the right place at the right time, with the vision and flexibility to adapt to the changes and serve new students in innovative ways. But to extrapolate too much from that would be an error.

As I understand the world, the for-profit sector has no intrinsic advantage over the others. They may be more flexible and have more money to invest in mining big data for learning advantage or academic excellence. But as recent examples — ranging from the Mozilla Foundation to the Saylor Foundation to Southern New Hampshire University — have shown, there are scalable, qualitative changes coming from all directions. It would be a significant mistake to think that one sector’s model or agency has a predictive advantage in this affair. What is happening, and what will continue to happen, is the unbundling and re-bundling of the traditional value proposition underlying higher education in multiple and ever-diversifying ways.

We are in a time when the pace of change is driving an ever-accelerating cycle of disruption. Here is one example of what I mean: in the 1950s, you could build a regional vocational center secure in the belief the center would be competitive with workforce needs for many years. Today, most such facilities are out-of-date on the day they open. So, in this environment, the larger question for anyone thinking about or operating in this space is, where are you in the “disruption cycle”?

As Christiansen has helped us understand, our products and services — and the culture and economics which allow them to succeed — can transform from asset to fatal liability very quickly. With that in mind, in simplest terms, many of today’s disrupters will themselves be disrupted tomorrow. And the challenge of newer, better, cheaper services will come not only from our known competitors, but also from those who are unknown.

Already the close observer sees new entrants into the space coming from all directions. Most devilishly, survivors will have to not only foresee extraordinary changes in capacity to support learners and learning, they will also have to anticipate significant behavioral changes in what learners want and how they want it. We know the availability of technology and new applications actually changes expectations and aspirations. Put another way, our commonly-held definitions of quality can and will, in all likelihood, change.

I believe, in the end, the race will go to those who can adapt to rapidly changing, indeed accelerating, change in the technologies that support web-based learning. And for those people and institutions who think it cannot touch them because of their size, their perceived quality or their status, I would remind them of Darwin’s determination it was not the strong, but those who could adapt, that survived dramatic change. And though it may seem a bit of a stretch to some readers, we need to remember, with or without Christiansen’s theory of disruptive change, the same has been true with massive empires and global corporations as well.

In my most recent book, Harnessing America’s Wasted Talent: A New Ecology of Learning (Jossey-Bass, 2010), I argued the successful institutions of the future would not have a common form. Instead, I posited they would re-bundle the value proposition in myriad forms for many purposes. I went on to suggest colleges for the 21st century would share characteristics, not form.

So, which institutions or organizations will have to adapt or die? I see at least five different types – public and private non-profit colleges and universities, for-profit universities, non-profit organizations that are not colleges and for-profit organizations that are not colleges. If you are wondering why I have widened the participation list to additional sectors, the answer is they will play because they can. The critical difference in this wave of change from all others is that, for the first time, none of these institutions — regardless of sector — can control the source, the nature or the pace of change.

The technology drivers, and their continuing invention and development, lie beyond the reach of campuses, faculty senates and boards of trustees, as well as legislators. They lie in the larger, global community. In my view, it will be the institutions and organizations that can adapt and address the big opportunities that will survive and prosper. Those big opportunities include:

  1. Understanding the nature of change and the potential to closely re-examine current practices and make significant change.
  2. Using big data to significantly strengthen support and service to all aspects of the learners’ life as they engage with the institution.
  3. Understanding the potential big data has to re-define the meaning of lifelong learning from an institutional to a personal service.
  4. Redefining the meaning and the structure of career and professional development and support through life.
  5. Dramatically customizing services to individuals at a scale unimaginable 10 years ago.
  6. Dramatically improving learning in the humanities, math and science with learners who have not been able to access high-quality opportunities in the traditional system.

Conclusion For-profit institutions are the tip of the spear of change. But many others are following closely behind, and the winners will ultimately be those institutions that can best adapt to the changes around them.

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Readers Comments

Ryan Loche 2013/06/12 at 8:51 am

I agree with Smith’s analysis that the institutions that choose to adapt will survive and thrive. However, a potential difficulty is that we do not yet understand the nature of the beast, or what it is we should be adapting to. Just as we (think we) begin to understand the way the industry is moving, expectations are reshaped and what we considered ‘new’ processes and technologies are thrown out the window. This is the world of online higher education, where the speed of change is one that we have never seen before.

Alicia Ramos 2013/06/12 at 11:29 am

I agree with the commenter above that technology is altering the speed at which things change. At the same time, technology has enabled institutions to respond to market dynamics in a new way. For example, we can now collect and analyze big data, using our results to design programming at different scales. The connectivity of the online world gives us the opportunity to reach previously untapped markets. It seems that for every challenge technology throws at us, it also allows for the solution to address it.

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