Next-Generation Education

Big Challenges

Globalization. Consumer empowerment. The need for optimal efficiency. The tightening of traditional revenue streams. Differentiation as a requirement.

Everybody knows these macro-forces make life difficult for companies in industries ranging from financial services to manufacturing to consumer packaged goods. Not as many people recognize the huge impact they’re having on education and related sub-sectors. Private and state-supported academic institutions, as well as not-for-profit educational support organizations are being forced to change faster and better than ever.

Interestingly, many business people never look to academia for valuable lessons or best practices. Lots of executives seem to think all universities, colleges, research institutions, state departments of education, school systems and the organizations (including not- for-profits) that support them are slow-moving and backward-looking. But, as we’ve learned from several close collaborations in the field, education has embraced innovation to address challenges similar to those faced by global corporations.

Going Back to School

Consider the intense pressures faced by education assessment sponsors, the entities that are considered the gatekeepers to advanced education. All of their stakeholders – rising college students, parents, colleges and universities and government agencies – frown on raising the price of key achievement tests, like college entrance exams. In the name of ensuring educational access for all demographics, Federal and state legislatures and the academic institutions themselves create intense pressure to control the cost of assessments. Hence, they demand that required tests be priced cheaply.

At the same time, many of the same constituents expect a higher level of service and a more robust user experience in the form of online registration, faster grading cycles, easier access to scores and personalization. They want commercial-grade customer service and value at non-profit prices. In this sense, educational test administrators – which some executives might think of as cozy little not-for-profits – find themselves compared with successful consumer-oriented companies, like Amazon.com or the telcos. These consumer expectations are reshaping the way these firms operate.

At a leading national testing organization, the leadership team anticipated these market shifts and expanded the basic mission to offer more services to customers. Sounds like an easy answer, right? But the difference maker was the comprehensive plan to operationalize the change. The team modeled the transformation path in every tangible way it could – in process templates, customer interaction flows, job descriptions, systems architectures, organizational charts, and supplier contracts. It looked at before-and-after performance metrics to ensure change really made a difference. How much more efficient would processes be? How would supplier or sub-contractor costs change? These metrics, defined in the business case and project plans, were built into ongoing reporting, analysis and performance management cycles. This was, overall, a very innovative approach to change, based on Change Engineering^SM.

Building an Educational Brand

How many companies do you know of that could withstand a sudden and precipitous drop in revenue? That’s precisely the problem faced by many academic institutions today. State legislatures have made deep budgetary cuts, indicating their belief that academic institutions need to be more self-sufficient. The business case and penchant for states to support post-secondary education (especially professional education like medicine and law) have fallen dramatically. Faced with the cut in revenue, many institutions have raised tuition.

Some of our educational services clients embraced the dilemma as an opportunity to create distinction in a largely undifferentiated field. By building a unique value proposition within their academic mission, these institutions have connected to other sources of funding.

A state-supported school of dentistry we work with identified three focused themes upon which to build its brand. By going beyond training “fillers and drillers” to build a world class research organization, the school created revenue streams from the private sector and overseas academic institutions. Branding experts will tell you it takes such focus and granularity to build a brand.

Our clients invested not just in the idea of change, but also in the implementation and management of change. Too many organizations – including businesses – conceive of transformation without knowing how to make it real. Our client ran detailed financial analyses, restructured the organization and reshaped the operating model. It had to be done; building a brand was a matter of survival as it delivered better access to private sector funds and a stronger endowment.

The Bottom Line: We Have a Lot to Learn

Those who are skeptical about academic organizations would be amazed at how aggressively and strategically academic institutions and assessment organizations approach the challenge of change. These so-called “ivory tower” organizations are ready to deliver change in the real world. Educational institutions and related organizations are gearing up for the 21st century. In some cases, they’re moving faster than their counterparts in business.

And there’s plenty more change afoot. The privatization of schooling and the rise of charter schools. Free or deeply discounted tuition with schools operating off their endowments. More schools opening international outposts. Testing services globalizing their standards. There’s no doubt the educational world is flat and getting flatter. We think businesses will be able to learn a lot from the most innovative parts of the education industry if they’re willing to go back to school.