Think Entrepreneurially Or Risk Extinction (Or Irrelevance)

I was recently asked why (of all places) I chose to get involved in a higher education think tank and consulting firm.

After all, I didn’t spend most of my life working on a college campus building deep industry knowledge and subject matter expertise. The five years I did spend on campus as a student in the early ’90s were certainly nothing to write home about.

So why higher education? And why now?

Here’s what I found myself answering in response to the question.

First, I believe in the vision of our founder, Matt Alex, has. He has spent over 25 years in the Higher Ed space, and he has seen it from every angle—as an insider, a gifted consultant, and a soon-to-be customer. When Matt says the system is broken and unsustainable, I believe him. It doesn’t take a rocket scientist to observe the train wreck trajectory traditional higher education is on. 

Second, I like fixing broken things. It’s what my career as a serial entrepreneur has been all about. I spent the better part of a decade researching entrepreneurial behavior, and it’s how the entrepreneurial mind works. You see a problem and you look to solve it.

Some problems are easy to solve. Others, not so much. A small handful are so big and so messy, it’s not worth pursuing for the faint of heart. (#USpolitics) Higher education comes pretty darn close to the latter. But someone has to do it. Someone has to fix Higher Ed.

As I’ve invested the time to really look at Higher Ed through a business lens (hint, hint), I’ve realized that even though the problem appears gargantuan, the solution is really quite simple.

Here’s the problem:

1. Pricing: The financial model is breaking because the product is overpriced, and customers are finally pushing back. This is what is freaking higher education out. They never expected to be challenged on the value they deliver. Every new year was supposed to be a license to raise prices. After all, that’s what it has been like for 100 years.
2. People: The most valuable asset in higher education, the professor, is grossly underpaid for what the university generates in revenue off that professor. Yet, the professor is drunk on “tenure kool-aid.” It’s only a matter of time when (really) smart professors realize they can earn more for their intellectual property in a global educational marketplace than in a salaried job on a boat that is starting to take on a shocking amount of water.
3. Positioning: It was surprising to me to discover how little financial oversight there is in higher education. We’ve all heard about the cat being away and what the mice do in its absence. When things run loose for as long as they have in higher education, mega-disruption always follows, and there are lots of casualties. Here’s what’s just around the corner: if the student (buyer) will soon be able to access the professor’s content (product) differently (direct digital access), how does the middleman (the institution) justify its massive markup? (Think Amazon, Casper, and every other manufacturer-to-consumer play.)
4. (Value) Proposition: If higher education tells me that I have to pay $40,000-$70,000 per year for my kid to get a good job 4-8 years later, and now brands like Google say that same kid (subject to being the kind of human being they would want in their company) could take an 8-week certification course and have a job with them, there’s a problem brewing. Google is just the tip of the iceberg on this.
5. Pivot-Inability: Most industries see writing on the wall when it appears and start to adapt and change. My friend and partner Matt Alex tells me that higher education plans to do some kicking, screaming, and even some Ostrich-like behavior with their head in the sand.

So, what’s the solution?

It’s back to simplicity, where great solutions always lie.

1. Humility: Higher Ed has had a great run for 100+ years. But anything that old is just that: old! Old isn’t bad. It’s actually good. But old and rigid is a problem. So, the easy solution is to recognize what you’re not as gifted at—business mindset, entrepreneurial thinking, product innovation, messaging, customer acquisition, and change management—and ask for help.
2. Transparency: The reality is, there is going to be collateral damage. Disruption of the magnitude heading toward Higher Ed is going to kill a lot of budgets and take a lot of jobs. Be open about what you are talking about in C-suite conversations, so that your D-suite, managers, and staff, aren’t blindsided later.
3. Innovation: I’m told that higher education does not like this word because of what it insinuates regarding change. (It is ironic to point out that Higher Ed teaches about innovation but doesn’t want to be innovative.) I would like to make the case that Higher Ed go all in to embrace this word, discover what it really means, understand how to activate the behaviors on campus that drive it, and put a framework in place to foster it. There are plenty of smart, passionate, and committed people who work on campus who have ideas that need to be heard, tested, and pushed to market. What is missing is the framework.
4. Embrace Failure: It’s another taboo word, I know. However, without allowing this to happen in small ways in the short term, we guarantee it will happen (at an existential level) within 5 years for a lot of schools. Embracing failure and what it can teach us is a key trait of organizations that thrive through change. This means a professor should feel free to experiment with new ways to deliver a class knowing that even if it is a total disaster in the Fall semester, some changes and improvements (with student feedback) could result in a game-changing solution for the Winter. The same is true for the registrar’s office, the dean’s office, and student services.
5. Re-Imagine: You’ve heard the saying “if you don’t know where you’re going, all roads will lead you there.” The handling of return to campus in the Fall of 2020 is a testament to that. There was no vision beyond “We have to get tuition and dorm dollars in the door.” So plans got put in place to make that happen—only to see them backfire. What if institutions took the time to imagine what it will look like to be a Successful Post-Pandemic Institution and work backward from there? That’s what entrepreneurs do. You begin with the end in mind. That’s what I’d challenge Higher Ed to do sooner rather than later.

The next piece I’ll write will describe what I (an obvious outsider) believes a Successful Post-Pandemic Institution needs to embrace in thought and action. It may ruffle a few feathers, as I am sure this piece will do. But for the few who are open to some fresh ideas, I want to present a roadmap to re-imagine a bright future.

In closing, there’s actually a third reason I am partnering with Matt Alex to help higher education—even though I could be doing a lot of other things that are less taxing and more financially rewarding.

I believe in the people of Higher Ed.

I have had a chance to meet and spend time with many of them on webinars, TownHalls, Zoom meetings, and conference calls. I believe that a majority of people who work in higher education care deeply about what they do. They want things to get better.

Truth be told, they don’t know exactly what to do next to protect their jobs, their institution, and their constituents, but the good ones are (finally) looking for answers.

Others, unfortunately, will think and act like the board of directors of Blockbuster Video (and many other examples I can cite of people who were convinced they were invincible) when the Netflix’s of their world showed up on the scene. That movie (pardon the pun) does not end well.

Summary

• It’s been a good 100+ year run, but it’s high time for fresh, new thinking in how Higher Ed serves its customer.
• Those who want to keep repaving old roads like my partner, Matt Alex, talks about, will pay a dear price for it. Sure, the university/college may still exist as a name and location, but a lot of good people won’t have jobs there anymore.
• Innovation, when done right, can be fun, empowering, and, most importantly, more beneficial for all involved. If we’re really in this for the kids, we need to act like it.
• You’re not alone, Higher Ed. Other segments of the economy have been through existential change and come out just fine. There’s plenty of help and case studies available, but you have to look outside the higher education bubble.
• Don’t be like an ostrich at a time like this.

Life is full of choices, keep it entrepreneurial!

Joe Abraham
Author of Entrepreneurial DNA
Operating Partner, Beyond Academics