Changing Higher Ed Podcast with host Dr. Drumm McNaughton and guest Mike Goldstein
Evolutionary and Revolutionary Trends in Higher Education
Change in higher education is rapidly accelerating as the world emerges from the COVID-19 pandemic. One way to think about these evolutionary and revolutionary trends in higher education is through an evolutionary theory describing the punctuated equilibrium that was offered by the late evolutionary biologist Stephen Jay Gould. This theory suggests that while a steady rate of change through a logical development is common, there are times when evolution is not slow and steady. A cataclysmic event causes a transformational change that ends one age and begins another.
While this change may have happened anyway (but at a slower rate), the cataclysmic event changes the balance in a way that causes the evolutionary process to accelerate. There are basically two ways to understand change: Evolutionary or incremental change and Revolutionary or transformational change as addressed in a previous post.
Over the past 16 months, higher education encountered a period of punctuated equilibrium. This is the second period of punctuated equilibrium that the industry has faced; the first evolutionary and revolutionary change is when the internet was developed.
These types of punctuated equilibrium created significant change. There is a difference between the development of the internet and the explosion of the use of online learning as a tool during the COVID-19 pandemic. The development of the internet created an entirely new ecosystem to teach and learn. COVID-19 took existing systems – and particularly online learning – and caused a huge acceleration that seemed more like a forced march than evolutionary development.
Evolving Trends in Online Education Models
Interestingly, the results of this shift to online education differ between K-12 and higher education. At the K-12 level, COVID-19 has set back the adoption of online learning by a decade, especially at the lower grade levels. That’s because online learning didn’t work well, so educators and students want to get back into the classroom for face-to-face instruction.
However, COVID-19 had the opposite effect in higher education. The pandemic showed that moving to online education can match or even improve what higher education already was doing educationally at a reduced cost.
Moving forward, higher education now can develop the best hybrid model by combining the best of online education with the best of in-person education. The pandemic forced everyone in higher education to take a much closer look at online learning – and for most institutions, there’s no going back.
Some institutions that are residential communities with learning communities – such as Amherst, Haverford, and the Ivies – may continue to prosper using their original context. These institutions will remain attractive to students who have the time, resources, and inclination to live on campus and take in-person classes. This approach offers valuable learning (and living) experiences.
However, higher education has learned – thanks to the pandemic – that the residential experience can be combined with online engagement. Through integrating online learning with the residential experience, higher education can avoid going totally online and still provide a rich experience that supports student learning and life.
Revolutionary Change is Making Higher Education More Affordable
Higher education leaders need to learn how to use the best instruments and best resources to make higher education more affordable.
The higher education system in the United States is pluralistic. This includes the nature of education, the management and ownership of education, and the population of students. The Biden Administration’s focus on higher education – including emphasizing community colleges, upscaling, reskilling, and HBCUs – fits into this pluralistic model.
The wide acceptance of online learning will accelerate this effort, but education needs to remain student-focused – and students learn differently. For example, traditional students learn better with some face-to-face instruction, while adult learners do well with online learning. This could mean that graduate programs can embrace more online offerings. Therefore, higher education leaders need to delineate the different types of students who attend the institution and then make appropriate choices related to how education is delivered.
One of the problems with education is that it tends to be very conservative in its ability to embrace change. While the pandemic has forced leaders to taste change, some will devour these changes, while others will dig in their heels.
This acceleration is causing more institutional introspection in relation to how to deal with change. Higher education has not focused on transformational leadership. Instead, higher education previously embraced a perspective that believed that while change happens, it occurs only when the environment is right. This perspective also included the belief that when the environment is not right, change dies. Thus, higher education excels at finding or creating environmental issues that kill change.
This is also known as resistance to change. Higher ed institutions tend to abdicate transformation unless forced to change.
Evolutionary and Revolutionary Change at the Board Level
Higher education institutions, which traditionally are very conservative, need to be open to change – and this means being able to accomplish change. To do so requires bringing board of trustee members and faculty along as part of the process of change. Various constituencies also need to be engaged at some point so that they feel that the proposed change is not suddenly imposed on them from above.
One example is Southern New Hampshire University, which needed to go through an early socialization and planning process before adopting online education. The university, which was initially a little residential university, engaged board members in a conversation about creating a significant online program that would become almost a separate institution once built out. This idea and conversation proved providential in that the university, which initially served only a few 100 students, now educates 100,000+ students annually. In addition, the physical campus has grown significantly, and the residential students’ education is subsidized by the large online enrollment.
A similar process unfolded at Cornell University as it was developing eCornell. Faculty members had significant initial concerns but were engaged in discussions to help them understand why eCornell would not intrude on academic prerogatives and would not divert funds from the core academic budget. Cornell went on to launch the online learning platform and is one if not the most successful of the Ivies in online education.
Evolve with a Commitment to Transparency
Transparency is critical when making these types of changes. The worst thing that can happen is to try to initiate change and have people not understand what is happening – which then leads to misunderstanding about what is happening and resistance to the change. This relational issue can be exceedingly difficult to overcome and even be organizationally fatal. There are pros and cons to organizational transparency, so prepare your approach accordingly.
Transparency is imperative in a partnership or merger, and non-disclosure agreements can create a screen around the proceedings. However, it’s important to engage people at various points so they feel like they are not having something dropped on them without their knowledge. For example, when Purdue acquired Kaplan, a separate enterprise was set up that wasn’t part of Purdue University. Instead, this entity was a part of the university system and had its own rules, budget, and faculty. And although there still was criticism, this structural move blunted the effectiveness of the criticism.
Evolutionary and Revolutionary Online Learning – Rent or Build?
Most institution leaders must decide whether to build internal capacity or buy online education. The pandemic created an excellent example of how this can work. When the pandemic hit, many institutions used Zoom to replicate the classroom, which was a cheap option. While this is a simulation of a classroom, it is remote learning and not online learning. This approach served the institution’s needs during the pandemic.
This is a classical example of rented, but don’t build it. What many institutions rented was an electronic version of a classroom. In comparison, other institutions took advantage of the broader capabilities of building online education, including hiring an online program manager who converted courses into online courseware. This effort deeply integrates the visual and audio experience with the learning experience.
Ultimately, institutions need to decide whether to build this capacity internally in the university, i.e., having their own OPM in-house, or hiring it from external sources. The problem is that building it in-house can prove to be capital-intensive, particularly because the revenue for online courses does not come in until after the course is built. Going this route, institutions must pay for the courseware developers, faculty, and the creation of materials, which can be expensive.
Many institutions are finding that they can build capacity relatively inexpensively to serve their needs. In the future, a hybridization model may emerge in which many institutions will use online program managers while also contracting out the construction of courseware that is customized to their faculty and curriculum. Some institutions will decide to create that capacity for themselves. In other instances, hybrid institutions will slowly develop internal staff capacity to create an internal OPM mechanism over time. An example of this hybrid approach is Los Angeles Pacific University (LAPU) that has created its myLAPU app, a human-centered design effort built in partnership with Ready Education that allows students to complete their full degree on their smartphone.
Historically, OPMs have been outside online program managers, but now OPM can stand for online program manager or outside program manager. The change is due to the increasing desire by institutions to create that capability internally.
This calculus is analogous to outsourcing the cafeteria function to an outside company. In either case, the institution writes the menu that will be served. In one case, it’s the university employees who are mixing the dishes while in the other case, the company that has the outsourcing contract makes the meals.
Many institutions have chosen to outsource the online learning platform. They believe that their business is providing an education, not creating or managing the online learning platform. However, there is an argument to be made about institutions building this type of service in-house, much like they have built their own counseling service and enrollment management services.
While higher education institutions have been outsourcing the operations of areas such as large parking garages, maintenance, and cafeteria work for a fee for many years, current leaders are considering outsourcing core academic functions of the institution – the instruction, student support, and student services. This has taken a quantum leap of thinking – and will lead to the next generation of private-public partnerships in the best sense of the term.
For example, businesses that hire graduates are having more and more input into the higher education curriculum. Closing that gap, i.e., between what is taught and what is needed in the workforce, is crucial for higher education to maintain credibility. For example, internships and externships – which bridge this gap – have proven valuable as learning experiences. Additionally, these types of experiences have a tremendously positive effect on the student both in their professional future as well as the quality of their remaining time as a student.
Trends in Mergers and Acquisitions
Mergers and acquisitions are continuing to evolve. In fact, while more companies are interested in education deals, there are fewer education deals available. There’s been a dramatic evolutionary shift over the past 10 years, with much less interest in pursuing an M&A with for-profit institutions that are taking part in the federal student aid program. This is due to the regulatory environment, which was fraught during the Obama Administration, friendlier during the Trump Administration, and now becoming more contentious in the Biden Administration.
High-quality for-profit publicly-traded institutions such as Strayer and Capella will survive and prosper. Institutions that are marginal will not do well. The big change has been that the non-profit and public institutions are doing what the for-profit institutions used to do, i.e., of the 10 largest online institutions, 7-8 are public or independent.
Enormous market activity is taking place in areas that support what institutions are doing, such as Wiley. Additionally, non-institutional providers that directly serve students (such as boot camps) also are of interest in relation to M&A. Many non-degree-granting institutions that offer certifications that have validity in the marketplace and are providing high-quality, high-intensive programs are viable. Additionally, access that broadens student support to certifications is of growing interest because of the Biden Administration’s education policy direction. This will open a much larger M&A market. While M&A will continue, it’s important for the focus to remain on student outcomes instead of only the financial bottom line. For that reason, policing will continue to be of great importance.
Three Recommendations for Higher Education Leaders and Boards
- Invite creativity. Have someone on the staff whose job is to look over the horizon to see the trends, and then come back and say, “Here’s an idea.” If the idea is viable, provide the resources and room to run with it.
- Create an environment where creativity, evolutionary and revolutionary change can prosper. To do this, the board, the leadership team, and faculty need to be accepting of the change.
- Manage change very carefully. Get the necessary buy-in and support, and then resource it adequately and make smart decisions.
Dr. Drumm McNaughton provides governance consulting; strategic planning, implementation, and change management consulting, and accreditation consulting for higher ed institutions.