Responsiveness, Rigor and Student-Centricity Will Spell Success for Business Schools
The higher education marketplace is evolving and, with it, business schools are shifting as well. Like their colleagues across the institution, business school leaders are in a new position where they have to define and prove their value proposition, respond to shifting market demands and stand out against massive competition and brand confusion. In this interview, Alex Sevilla reflects on a few of the key trends that are impacting the business education marketplace and shares his thoughts on what it’s going to take for institutions to succeed over the long term.
The EvoLLLution (Evo): Why is it important for business education leaders to stay apprised of major changes happening in their space?
Alex Sevilla (AS): From a leadership perspective, every industry is changing and higher education is not immune to this. There may have been a time when things moved slower in education settings—that the ivory tower protected or incubated us from significant changes outside of the university that would allow higher institutions to maintain the status quo—that’s not the case anymore.
I don’t know if this is a tectonic plate shift. I’m not suggesting that we’re going from one end of the spectrum to the other. However, people’s expectations for what undergraduate and graduate-level education should be has changed.
The rising cost of education across the board has forced institutional leaders to ask, “Who are our consumers?” “What are students, parents, companies or executives getting out of this exchange?” “What’s the value proposition for each consumer, and is it the same?”
This is a critical conversation to be having. Knowledge is far more accessible today than it was previously. When I was a student, I had very limited ways of acquiring knowledge on my own. That is no longer the case. Expectations have changed, and now our consumers want a clear picture of the net gain from their investment in formal higher education compared to someone doing independent research and self study, learning and growing independently. We need to understand what a university provides and do it in a way that the basic tenets of consumer behaviour are being met. Customers need to be sure of what they’re paying for, they need to feel good about their investment, they need to feel like the school or the program understands what they need and that it is delivering that in an effective way using technology.
Basically, our students want to make sure that this is a reasonable investment because now they have other options and now their expectation lens has changed given how the world around us is changed.
Evo: What do you see as some of the most significant opportunities today’s market presents for business schools?
AS: The appetite for graduate education is strong. We take our lumps here and there and the value proposition ebbs and flows with the economy, job growth and the manner in which other programs are pivoting or positioning themselves, but the market for graduate education is still there. That market is robust, but the challenge is that there’s massive brand confusion in this space because the traditional lines of competitive play have shifted. A lot of that confusion stems from the growth of online programs, hybrid programs and schools catering to individuals that continue to work while studying, rather than enrolling in full-time programs.
All of those different cuts of the market create a nice portfolio for schools to be able to push forth into the marketplace—but the numerous approaches also create a lot of confusion. We’ve gone from having a few cereal boxes on the shelf to having several thousand on the shelf and that level of choice can cause decision paralysis like it does in any other consumer market.
The opportunity here is for schools to assess their own portfolio and develop a market matrix that determines whether each institution is investing in the spaces that they think will generate a reasonable interest and return. It also drives leaders to understand whether they are just trying to do what their neighbors are doing, and to understand how their activities fit within their own areas of strength.
Then, the opportunity more specifically evolves into figuring out how technology can be leveraged along with some of the more sophisticated guiding principles of program design to meet customer needs in a personalized way while still building to scale?
That’s a tough thing to do. On the one hand, we want to be more accessible, we want to expand our markets and we want to attract as many people as possible. But is it realistic to do that if we offer a homogenized product on the back end, where everyone gets the same thing, everyone takes the same courses and everyone goes through the same experience? The current consumer really wants a program that fits right in their wheelhouse, fits into their work life and fits into their family life but they want to learn specific things for their job, industry and the roles they want to have in the future. Developing an experience like this is truly a tough nut to crack.
The schools that are able to do this better than others—create sophisticated programs that allow scale but at the same time have students feel like they’re the only person in the universe—will capture a great opportunity. They will be at the intersection between technology, creative school leadership, faculty and programs, differentiating themselves from institutions who decide they’re just going to continue to roll down the rails offering the same product that they’ve had for the past 30 years.
That’s where you may see some winners and losers in the next 10 to 15 years.
Evo: Who needs to lead that charge in order to ensure that the business school is keeping up with the times and with the trends?
AS: The easy answer is to say it begins with college level leadership, but I think university and college leadership begins at the dean and the associate dean level.
The reality coming to the doorsteps of public institutions is that we can’t just go to our state capitol with our hands out. We have to start thinking creatively about where we can generate resources. There is greater degree of freedom to be creative in meeting that market need. Over the next few years, deans will have some liberties that their predecessors didn’t have.
Basically, innovation and responsiveness will come from the breadbox of the school and faculty leadership rather than from the university. Deans will need to know how well they are listening to the market, how well they are understanding those market needs and how willing they are to address those market needs. At the same time as taking care of these issues, deans will need to make sure their schools are still doing things that historically they have done, and which remain really important, like generating research and supporting faculty. Deans are going to have more control in that space.
An effective model is when you have associate deans who are running schools or running programs feeding into a dean that is receptive to building and leading that change, helping leverage and broker conversations with faculty committees and with department chairs. Going one level further into the food chain, when hiring faculty, a dean needs to decide how many faculty they want to bring in over a period of a few years and then determine the breakdown between what those individuals are providing the school from a research perspective and from a program delivery perspective. Those things don’t necessarily have to be in conflict with one another but it’s really important that a dean knows how they’re managing their resources in all aspects of the management of the school.
Evo: How do you think these trends will shape the business education space over the next two decades?
AS: Higher education in general is an industry where you see very little, if any, consolidation. There are universities in the same regions operating very similar programs targeted at the same customer bases and industries.
In other industries, there is a merger and acquisition process that can be healthy to the competitive process and also allows for the consumer to get more at the end of the day because you have the right number of competitors in the market who have all gotten stronger and are offering best-in-class products in different spaces. Higher education is less inclined to do that. Particularly at the graduate level and with business schools, we have 3000 to 4000 colleges and universities in the U.S. alone offering graduate programs in business to working professionals. I just don’t know if that’s realistic.
There are going to be some winners and losers who emerge. Schools that have strong reputations and invest wisely will get bigger and will evolve into premium brands that will continue to take a greater lion’s share of the market. This will only accelerate as technology allows those schools to increase their footprint across the US market. In other cases, schools that are really good at offering a solid educational experience for their local market but don’t expect to be national or international players in terms of a reputation and they do really fine work but they’re not expecting to play in that arena.
Between those national leaders and regional dominators, there’s a massive group in the middle that’s going to have to figure out who they are. If they’re attempting to be best in class, they need to determine how realistic that is given the competitive forces. If they are attempting to focus on access and affordability, they need to determine how successful they can be in that space while competing not only with non-profit but also for-profit institutions. Defining the space for these mid-market institutions will take some work.
To prepare for the way the market will shift over the next 20 years, leaders have got to embrace technology in some way, shape or form unless they have a brand that does not require it. And the list of brands that are insulated from this demand is getting smaller and smaller year after year. Second, leaders will have to have an innovative mindset that allows institutions to respect the consumer enough to build programs that meet their needs while not simply handing over the keys to the consumer. At the end of the day, a university is still an academic enterprise; this is not some focus group for McDonalds to determine whether all-day breakfast is a good idea. We have a responsibility to teach the things that we know will help our students be successful. We should never go so far into the consumer dynamic where we make it too easy or too accessible. We cannot turn our offerings into the Reader’s Digest version to try to capture market share.
How do we use technology effectively, how do we get students interested in our programs, how do we prove our mettle in terms of student’s ROI and our value proposition? How do we do all this in a way where we still have full control of the curriculum, we still have control over what is being taught? How do we deliver these programs in a creative way that leverages technology, highlights innovative thinking and moves towards a mass-customization model? These are the questions leaders are batting around.
Great schools also have an effective blend of curricular and co-curricular priorities. How is the school leveraging and engaging their alumni? How is the school engaging the corporate community around them? How do you keep prospective students focused on the curriculum while still offering an array of additional benefits that allow them to be far more connected to the institution? A quick example of that is career support for executive and professional programs. That really didn’t exist 10 to 15 years ago, if you were an executive student you came and you got your classes and that was that. Now, that market has demanded this additional service and schools are slowly rolling it out.
This will continue to happen over time: The market will demand additional services and the institutions will respond. Schools that are responsive to those market needs while still delivering rigor in their curriculum and content will be the ones that are successful over time.
Author Perspective: Administrator