Looks like Southern New Hampshire University has devised a nimble business plan.
This is just the kind of “disruptive innovation” that Harvard Business School professor Clayton Christensen has predicted: this refers to, in John Hechinger’s words, “the process by which companies at the bottom of the market use new technologies to displace more established competitors.” The attack comes, not from the front, but from the side: from the other two raptors you didn’t even know were there. It is exactly the kind of thing that universities that wish to survive will need to do if anything like Christensen’s Prophecy–that in 15 years, HALF–that is right, half–of the institutions of higher learning in the United States will be gone. (More on Christensen’s Prophecy–and the coming Avalanche–later…)
This may well be a viable pathway–and the only pathway–for middling universities attempting to surf and survive the volatile seas of the EdTech Era. Frank Donoghue, whose essential book I’ll be plumbing in upcoming posts, thinks that the lasting mark on higher education left by the first generation of online for-profits will not be the companies themselves, but the selection pressure they exert on traditional institutions of higher learning:
“The real legacy of this industry, I believe, is its lasting and widespread influence on traditional universities. Whatever the fate of specific campuses of the University of Phoenix, Career Education, or DeVry, these companies have demonstrated that it is possible to operate a university as a business…. The business model for higher education devised by the for-profits has tremendous appeal to administrators and lawmakers in an era of steadily declining public funding and tuition increases that are quickly becoming prohibitive.”
Donoghue thinks that the majority of non-profits will be torn asunder by the cross pressures of vocational for-profits, which lead to jobs, and elite nonprofits, which leverage prestige. Large state research universities, he thinks, have largely lost their way, unable to decide what their mission and role in society really is, and thus plagued by “mission creep.” This is the arms race that Christensen terms the “bigger and better” virus that has infected academic administrative culture. However, the model of SNHU may well offer them a middle way: the profits from an online apparatus that offers primarily vocational training can be funneled back to the leafy host campus in order to boost its prestige. The challenge facing universities that take this path is, in part, one of perception, as Hechinger relays:
“Even some of the beneficiaries of Southern New Hampshire’s online push are uneasy. John Wescott, a 19-year-old sophomore at the physical campus, expects to graduate with only $15,000 in student debt thanks to financial aid. Yet he recalls a spirited discussion at a student-government meeting: ‘There was a sense that we were turning into the University of Phoenix and the value of our degree was going down.'”
Thus the “threat to Harvard” I discussed yesterday comes not just from the for-profits themselves, but from the effects they are likely to have–and are already having–on the non-elite, traditional universities. But, again, let’s be clear: Harvard feeling “threatened” is like the prom queen who is insecure about her appearance.