Delivering the right education at the right time

I have seen a lot of articles about challenges to traditional higher ed recently, and I’m not hopeful for the future of the university given the types of reactions I’m seeing from the field’s “leadership.” Here I show you a little of what I’ve been seeing and give you my take on the matters at hand.

The threat of MOOCs

Let’s consider MOOCs and the Professoriate by Kaustuv Basu at Inside Higher Ed. (This is a reflection on Tom Friedman’s very positive NYTimes article Come the revolution about MOOCs, Coursera, and online education, generally.) While it might be excused for a professor’s first reaction to the reality of online education to be defensive, by now we should be past this reaction. We should have moved on to figuring out how we can be part of the solution rather than part of the problem. By the tone of this article, many professors haven’t taken that step yet. The article ends with this quote from Margaret Soltan, who was the first professor at George Washington University to offer a MOOC:

“Online is clearly inferior, even if done very well, [compared to] face-to-face education and to the social rites of growing up which college represents for many, many people,” she said.

Knowing what the customer values

This is an example of a really dangerous way of thinking. (This is where I put my “business professor” hat on…) This is a very important point:

It doesn’t matter if their product is inferior. It doesn’t matter if a bundled good (the accompanying “social rites”) increases the value of your product. If the customer wants something else, then the organization that provides that new “something else” will win out in the end.

Let’s think about early 1970’s American cars (for example, the 1971 Chrysler Imperial). Was the 1971 Honda Civic a superior car? No, but Chrysler should have been extremely worried about it. Why? Because it addressed a segment of the population whose needs weren’t being met. It provided reliable, economical transportation. It didn’t have a big trunk and it barely carried 4 passengers, but sometimes what it provided was just enough — and it was a lot less expensive.

Or, for another completely different type of example, the 2012 Ferrari FF is clearly a superior car to the 2012 Ford Taurus. But should Ford be worried about the Ferrari? Remember, the Ferrari is clearly a superior product in almost every way. Why isn’t Ford worried about losing all of their customers to Ferrari? Well, the Ferrari is astoundingly more expensive; for many customers, the Ford delivers more value for the money. It is the customer who determines the value being received — not the product itself! Ferrari definitely has a market for their product, but Ford’s product is appropriate for a much larger segment of the overall population.

For an interesting aside, note that Fiat owns Ferrari and sells a variety of cars: Fiat, Ferrari, Maserati, and Chrysler. Not to put too fine a point on it, but this allows Fiat to sell a wide variety of cars to a larger, diverse, global market than if they just sold one line of cars.

In these two examples, if it’s not clear already, traditional universities (that would be me and my organization) play the roles of Chrysler and Ferrari. We have a well-defined product that hasn’t changed much. We are faced with a lower cost, somewhat comparable product (online education in a variety of forms) that provides a different value proposition than we do. We are the high cost provider who tries to integrate all possible benefits into our value proposition. This leaves us vulnerable to the threat of competitors who are able to unbundle these benefits in a rational way.


This analysis leads me to a few conclusions:

  • Not all students in all meetings of all classes need the high end product. Further, let’s stop pretending that all of our classes are a high end product. Have professors recently sat in some of these huge lecture halls where a majority of students receive a majority of their education? After doing so, it would be hard to defend the position that a well-done video lecture wouldn’t provide the same (or even more) benefit in many instances. Yes, small seminars do provide a highly valuable experience. But how many students experience this (and how often) in their undergraduate education?
  • There is a legitimate reason and justification to deliver different types of products (education) at different price levels, even if the same product (some particular piece of knowledge or learning outcome) is at the core. Universities should work at creating different products for different parts of the market, some with lots of human contact, some with less human contact, or maybe some programs with blended delivery. Parts of the market clearly hunger for a lower cost product, especially when they don’t see the value of the higher cost version.
  • Universities (particularly business schools) should think about spinning off a company that provides expertise in the job hunt to young job seekers (for example) — they could then sell this to the marketplace instead of just providing it to their current students. The university could also think about doing this with other services. Why wait for other companies to unbundle your services for you? Why not do it yourself?

If universities (and the faculty they employ) want to continue to exist for another century (or even couple of decades) at anything like the scale they currently operate, then faculty and should stop trying to wish the problem away and start trying to be part of the solution. Professors should experiment with different delivery mechanisms in your own courses on a small scale. University leadership should encourage this experimentation, be willing to forgive experiments that fail (i.e., complaints from students or lower course evaluations), and set up systems for sharing the successes and failures so that everyone can get better faster.

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