Institutions must adapt new strategies to meet new consumer expectations
What are the biggest challenges facing higher education as a business?
There are a few challenges that institutions face today. For such a long time, many were in a continuous growth pattern, developing new programs and online programs for receptive audiences. That certainly is not the case today. Many institutions are experiencing flat enrollment and some are seeing it decline. It is a market share game, in that there is not a tremendous amount of new students looking for an education as there was in past years.
There’s also the rising cost in tuition. For many years, schools were able to outpace the costs of operation and institutional investment with tuition increases. Now it seems the price of tuition has reached a tipping point and students are questioning the return on investment of a college degree.
What are the implications of these threats?
At some institutions, technology is being used to give both students and administrators clear insight into the paths to a degree; digitize course content with the ability to deliver learning anywhere; and more. Other institutions are taking the “wait and see” pathway, with leaders hoping the decline in enrollment just goes away on its own.
Clay Christensen said in The New York Times that the bottom 25 percent of every tier of colleges will close or merge in the next 10 to 15 years. While this is certainly an extreme view, for the first time in history many institutions closing or merging is a real threat. It will be the institutions that can be reinvented to cater to the audience that fits their model that will thrive. The ones that cannot adapt to the new consumer have a higher probability of continuing to decline or even going out of business.
What are the key areas of focus an institution must engage with to remain viable?
The biggest thing for leaders to think about is: What is the value proposition that will resonate with their target students? Too many schools try to offer everything to every student. Their focus should instead be on understanding what segment of students is likely to attend their institution, what value those students will appreciate and how to create a student experience around those values. As we’ve seen, for students, it’s about outcomes. The best way leaders can respond is to showcase outcomes such as high completion and job-placement rates.
Other areas of focus should include improving access to online and hybrid education, reaching a global student population, and really extending the mission of an institution to encourage a kind of lifelong learning in which graduates return to their university throughout their career to improve certain skills.
Finally, as increasing tuition is no longer an option, costs need to be cut from areas that are not of value to students so leaders can make investments in new technology or programs.
What is the role of the third-party partner in institutional success?
It comes down to build versus buy for a university. For years the approach was to build everything internally. Now the focus is on the true purpose of the university: educating and providing an unmatched experience for students. It is impossible to succeed in all services; partners can take on tasks that are not core to institutions. Administrators may decide they are skilled at recruiting first-time freshmen but weaker at recruiting adult students or launching degrees online. Instead of building infrastructure and investing to do that internally, they can outsource to a partner with that core competency.
Steve Fireng is CEO of PlattForm, a company partnering with universities to grow on-campus, online and hybrid programs through solutions supporting the entire student journey.
PlattForm is a higher education partner offering strategic, technology-focused growth solutions. For more information, visit www.PlattForm.com.