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Perspective: Top Five Ways Universities Can Innovate To Thrive

It’s not easy to find upbeat headlines about higher education these days, no matter what kind of institution you’re talking about. State support of public institutions is down, forcing budget cuts and tuition hikes. Well-endowed private institutions—which can’t expect the double-digit investment returns that fueled their expenditure growth in the last decade—face the need to trim their sails. Meanwhile, for-profit universities remain a wild card: Will regulators drive them back to the margins of the industry or will they become competitive disruptors, making the college campus as anachronistic as a video-rental or book shop?

Forward-thinking colleges and universities won’t wait to have this question answered by fate. In any likely future, the traditions of the past won’t be sustainable. The world needs more degree holders, and many of the would-be students are grindingly poor. Even the well-heeled ones won’t accept the traditional curriculum, skewed as it is toward lecture and memorization. The model of higher education that fueled economic growth and social prosperity in the 20th century won’t do the job in the 21st century.

Finding a new model will entail doing a lot more than creating a to-do list, no matter how long. Nor will the model be the same for all institutions. But here are five suggestions that may help:

1. Become No. 1 in the “ranking” of your own students, faculty, alumni and other direct supporters. Higher education is a prestige-driven industry, and it will remain so as long as the most valuable benefits it confers, such as creativity and judgment, are hard to quantify. Rankings—a popular alternative to knowing how much value an institution creates—are getting us into trouble. They tend to reward the big spenders and encourage imitation, causing higher education to become more expensive and less diverse over time. The rankings game also turns the vast majority of institutions into also-rans. Being a ranked school isn’t a winning strategy for any institution except the one at the top of the list. It’s much better to identify the “customers” you want to serve—students, faculty, alumni and public supporters. Determine what they care about and become their No. 1 school. Don’t sacrifice this customized, internal ranking for the sake of any external one.

2. Focus on what you do best. Traditional colleges and universities need to prepare students for a changing world, which means offering more than just the degree programs in greatest demand at the moment. Many also create great value through non-instructional activities, such as research and publication. However, they can’t afford to be all things to all people. The costs of mediocre graduate programs and scholarly efforts often exceed the revenues or prestige they generate—and the costs are ultimately borne by undergraduate students, who see class sizes and tuition rise. Successful for-profit educators recognize the opportunity to make the undergraduate customer king, rather than a second-class citizen. Their investments in highly interactive and engaging curriculum, along with their ability to set a price that doesn’t include subsidies for graduate programs and research, will allow them to make inroads in the traditional undergraduate population. In the face of this kind of competition, successful institutions will focus their choices of students served, subjects offered, and types of scholarship performed, so as to be truly outstanding. They also will make high-quality, affordable undergraduate education a top priority.

3. Embrace online learning technology. The future of learning is a mix of face-to-face and online instruction. Education scholars may still be debating the evidence for this claim, but for today’s young digital natives it’s as obvious as a good balance between “hanging out” and Facebooking. Blending the two forms of instruction not only raises learning quality, it also holds the potential to decrease instructional delivery costs and increase student access (more on that next). Don’t wait for others to disprove your assumption that online learning is inferior to the traditional classroom experience.

4. Grow the student body. Through fully-online and hybrid courses, traditional institutions can serve more students without a proportional increase in new buildings or full-time faculty. For example, a hybrid course that meets only once weekly, rather than three times, frees up a classroom for other students taking hybrid courses. Likewise, full-time faculty members can partner with online adjunct instructors in these courses, reducing costs. (The effects on quality would, of course, need to be monitored.) Such efficiencies have the potential of covering new costs entirely—and perhaps then some—with tuition. In other words, the college or university can grow while spending less per student, as many successful businesses do. Benefits accrue to the new students and to society, which realizes the goal of a more productive citizenry. Growth also benefits the institution: academic programs and departments that might otherwise face elimination or consolidation because of small size can be retained.

5. Put personal values back into higher education. Face-to-face, campus-based instruction is inherently expensive. If that instruction is only about facts and figures, or about equal time for all opinions, it can’t compete price-wise with education provided by computers and online crowds. Scholars are valuable because of what they value—truth, integrity, hard work, community and compassion. The more they can inject these values into their instruction and mentoring of students, the more secure they can become against competitive disruption, and the better off our world will be.

Universities will have to change quickly to survive the disruptive threats coming from every angle. But through smart, focused and strategic innovation, they will not only survive but thrive—continuing to play their invaluable role for the benefit of all of society.

Dr. Clayton Christensen, a professor of business administration at Harvard Business School, and Henry Eyring, advancement vice president at Brigham Young University-Idaho, are authors of The Innovative University: Changing the DNA of Higher Education From the Inside Out (Jossey-Bass, August 2011).

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