Questions: Why and how will the institution obtain sufficient returns to undertake this effort? Will it be through scale advantages (either per program or investments that pay back across multiple programs) that are going to lead to lower costs? Will it be through premium prices due to a difficult-to-match learning experience (via technology, pedagogical approaches, community building, student service provision, etc.)? Will it be through superior marketing strategy and insights (and appropriate execution) that allow the institution to significantly affect the value profiles of prospects?
Higher Education Strategy Series: This is entry #14 of this series. This page describes the whole series and provides links to all of the articles.
Details: This is both the hardest set of questions to answer and the one with the least direct impact on the strategy other than suggesting that the effort to deploy a program may, sooner or later, fail. Clearly, given the importance of forecasting the chances of failure, the difficulty of the task must be accepted and the questions addressed.
Reasons supporting success
Given a preliminary plan for potential programs to deploy, target markets for whom the programs will be designed, a vision for how and where those programs will compete and win, and an organizational plan for bringing them to market, an institution must ask itself:
- Why do you think you will win now and in the future?
- What is it about each program that will win in the market?
- Once recognized as the winner, what will keep other programs from overcoming the institution’s advantage?
In another way of thinking about the above that is suggested by King & Kay in Radical Uncertainty, leaders must come up with an answer to the question "What is going on here?". The answer is a story that is more plausible than alternative stories that might be or have been proposed. This story will be the one that is told by school leadership to faculty, to students, and to donors. In addition to being plausible, it must be convincing, illuminating the way to a better, more successful future for the organization if only the listener would join in and support the journey.
For traditional face-to-face programs, institutions have conventional supports for their market position — their physical location on a map, their campus facilities, and the sense of community that students can immerse themselves in while on campus. None of these are easily or reliably realized with online learning. While many students currently earning online degrees do come from within a certain physical distance of the institution’s actual campus, that won’t necessarily always be the case, and it is definitely not always true now. If an institution wants to maintain this geographic draw, it should develop a plan for providing services within its locale for current students and alumni so that they get actual, not just psychic, benefits from the institution’s proximity.
One plan for creating a more significant barrier to entry into your target market is to invest in cross-program technologies and services that would be difficult for competitors or potential competitors to duplicate. This is similar to the reasoning behind an institution’s decision to invest in a top-notch gym, library, or dining hall — but, in this case, the investment could be directed at technologies that support all of the institution’s online programs. For example, ArtCenter College of Design, in Pasadena, Calif., has made significant investments in both a distinctive learner experience platform and a tool for teaching art and design online. Both investments exceed justification for a single program but, since they will both be used across all of ArtCenter’s online programs and some of their face-to-face programs, the investments make complete economic sense. Further, given the clear superiority of the teaching tool and the difficult process required to create it, it is both a current differentiator across all of ArtCenter’s programs and one that can continue to protect the college’s position as they work to evolve the tool over time.
Investment and funding
This brings me to my last point for this set of questions. When an institution has a differentiator, it must plan on investing in that strength and continually signal to the market that it is making these investments. It is not enough to say “we use this distinct pedagogy” or “we provide the most valuable nursing degree in this area” (or whatever). The institution has to understand that these statements are descriptive of current affairs — which can always change. Other institutions can enter the market. Other institutions can detect a market leader’s vulnerability and perhaps create a feature that directly trumps the leader’s feature. The only way to maintain a lead is to continually invest in the differentiating factor.
The source of an investment can affect how an institution’s leadership might frame the economic benefit of that investment in online learning. If the source is a gift (whether from alumni or a corporate partner), the benefit of the gift can be framed as an institution improvement, an improvement in the lives of current and future students, or a defensive move to ensure the continued success of the institution. These are all indirect and long-term benefits that would be difficult to economically justify on the basis of enrollment increases alone at specific programs. For internal accounting purposes, because of the generality of the investment, its value could go right to the balance sheet or at least to overhead costs as opposed to the income statement for a particular program; thus, neither enrollment targets nor tuition rates would have to increase in order to fund the investment. The benefits would flow both to the student by improving the experience and to the institution by improving its overall competitive position.
For this series, I am posing activities for an educational leader to complete. The unifying project for these activities is to define a medium- and long-term plan for competing and winning online.
- Think of a particular program that your school currently offers, one that is not doing particularly well. Now answer the three questions from above:
- What can you do that will improve its chances of winning now and in the future?
- What is it about the program that will win in the market?
- Once recognized as the winner, what will keep other programs from overcoming the advantage that you have built?
- Think of a program that you would like to create. Answer the same three questions about it.
- How can you get the necessary funding for these programs?
Feel free to reach out to me if you have any questions or comments.
Define and Act on Your Institution’s Strategy
Dr. Scott Moore has written a 15-part series on defining and acting on a higher education strategy to guide leaders during these difficult times. It is targeted at educational leaders who are participating in shaping their school's actions during and after the COVID-19 pandemic.