Higher-Ed's Moment in History
Recently my wife and I were talking about Amazon - about how they have put so many retail stores out of business; about how they now have their own ground delivery system which has had huge implications to regional ground-transportation companies; and about how they are now buying airplanes, which will have repercussions in the airplane-leasing business. She asked me how I felt about all of that. I answered that while it is sad to watch some of our favorite retailers close, it does not alarm me because that is the natural course of business – finding ways of increasing customer value by delivering existing or new products better, faster, and/or cheaper. This is not new. And ultimately we benefit from improved products and services.
The real issue is how the overall market shakes out. In other words, how other service-providers react to the market trends they are facing. Some will either not recognize what is happening, or will fail to respond. Those are at risk of losing their business. Others will recognize what is happening and respond effectively. Those will flourish.
For example, Block Buster either did not recognize the trends in their marketplace, or failed to respond to them. As a result, Netflix supplanted them. But Amazon Prime and Disney Plus are great examples of companies that saw what was happening and responded in a timely and effective manner. They are now flourishing while Block Buster is out of business. And we enjoy the benefit of improved products and services. It is also interesting to note that several of the companies now providing online movies and videos were not even in that business. They recognized the opportunity when Netflix emerged and quickly entered that market.
One could wonder why Block Buster went out of business. In other words, why couldn’t they still rent DVD’s even while Netflix was providing virtual access to movies? The answer is that the cost of delivering movies the new way (online), is dramatically less than the old way (maintaining and renting hard media). Not only was Netflix far more cost-effective, but their delivery model was also much faster and more convenient. Block Buster's market declined, and their financial model became unsustainable.
Bear with me, I am going to bring this around to higher-education.
It is unfair to single out Block Buster. This kind of thing has been happening in multiple industries for many years. Detroit in the early twentieth century had 125 auto manufacturers. Today it has three. The others were acquired, merged, or closed. A more recent example is the steel industry, which in 1973 was producing 229 million tons of steel in the U. S. Today, they produce 94 million tons. Their decline is due to overseas competitors who are able to manufacture steel at lower costs, and due to the evolution of durable plastics.
An even more recent example is the retail industry, which has been affected by the growth of Amazon. While many retailers are suffering financially and closing, others have recognized what is going on and jumped on the bandwagon – such as Target, Best Buy and others. They have responded very effectively to online buying trends, pick-up and take-out service, home delivery, personalized mobile apps, online customer service, and more.
Looking toward the future, it appears that we are entering a time in history when technology will be leveraged even more than in the past to deliver services in new and innovative ways. The Economist recently wrote that the 2020’s could turn out to be a new era of innovation …
"Today a dawn of technological innovation is breaking. The speed at which Covid-19 vaccines have been produced has made scientists household names. Prominent breakthroughs, a tech investment boom and the adoption of digital technologies during the pandemic are combining to raise hopes of a new era of progress: optimists giddily predict a 'Roaring Twenties.' "
… The New Era of Innovation, Why A Dawn of Technological Optimism is Breaking
January 16, 2021
Only time will tell if this prediction is right. But we can certainly see the speed at which technology is being leveraged now, as a direct outcome of the Covid-19 pandemic.
It is our opinion that higher-education is likely to face similar opportunities and challenges in the very near future. Technology is already being leveraged to enable new educational models such as collaborative cohorts, shared curriculum, multi-venue and multi-institution degree-planning, improved online experiences, student self-service, and more. And we are beginning to see the early stages of new and powerful industries entering the higher-education marketplace. We believe that the pandemic has hastened a time when higher-education will face a cross-roads just as other industries have. Those that recognize the trends and respond correctly will flourish. Yet those who do not recognize the trends, or fail to respond to them, will be at risk of losing their institution and their mission.
Our legacy institutions are still highly regarded and are still the go-to for higher-education. In other words, it is each institution’s business to lose if they don’t respond. Conversely, if they do respond, and respond correctly, they will continue to be the default choice for their target market.
I know what you are thinking – that you don’t have the time or resources to respond to this right now. Frankly, it would be premature to put the blinders on without understanding what is required, and how fast. That is why we provide a Scalability Audit. It defines the current state of your systems and processes and makes recommendations to “position” you for the future. Only then will you know the cost or resources required. And, while the deliverable is a “Roadmap to Scalability,” in most cases implementation will span multiple years. Costs and resources can be budgeted across multi-year strategic objectives.
We discuss this topic much further in our Scalability Workshop, which we are offering “free” to our partner institutions in ABHE and ABACC. There, we show you clearly what the opportunity is for higher-education, and why we think so. We demonstrate how enrollment revenue can increase at a much lower cost, and how the staff/student ratio can be reduced. And we show how most of the future investment into personnel and payroll can (and should) be in the core educational offerings - i.e. faculty.
We will be delivering this workshop at the annual ABHE conference in February. If you will be there, I hope you will register for the workshop and stop by our booth. If you are a member of ABHE but not planning to attend the conference, or if you are one of our ABACC partners, we would be happy to deliver the workshop to your executive team via Zoom or some other virtual system. It is our way of investing into the future of Biblically-based higher-education, and our partner institutions. We believe this is your moment in history and we are willing to do our part at providing you with the insights to respond effectively to the market forces that are rapidly approaching.
If you would be interested in scheduling a free Scalability Workshop presentation for your institution, please contact us at MMC@Mike Moroney.com