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U V C O N F I D E N T I A L // T R A D E S E C R E T College Disrupted: The Great Unbundling of Higher Education Ryan Craig February 2015.

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Presentation on theme: "U V C O N F I D E N T I A L // T R A D E S E C R E T College Disrupted: The Great Unbundling of Higher Education Ryan Craig February 2015."— Presentation transcript:

1 U V C O N F I D E N T I A L // T R A D E S E C R E T College Disrupted: The Great Unbundling of Higher Education Ryan Craig February 2015

2 U V C O N F I D E N T I A L // T R A D E S E C R E T American Higher Education 1 »Biggest strength: Highest rate of matriculation; diversity of students »Biggest weakness: Isomorphism (the four “Rs”) »Creates higher education myopia

3 U V C O N F I D E N T I A L // T R A D E S E C R E T The Dystopian Counterfactual What if 100% of the benefits of higher education are a result of self-selection bias? What if the pool of degree completers would have demonstrated the same outcomes (employment levels, incomes) without regard to their education? »Initiative »Talent »Grit What if colleges and universities are costly playpens for year-olds? Only way to respond? Outcomes data.

4 U V C O N F I D E N T I A L // T R A D E S E C R E T Crisis of Data “My only question is if he’s that good a hitter, why doesn’t he hit better?” - Billy Beane “Good hitter” in baseball = 4Rs in higher education OBP in baseball = ??? in higher education

5 U V C O N F I D E N T I A L // T R A D E S E C R E T Crisis of Affordability »1970s: typical student could pay tuition by working 182 hours »2013: it takes 991 hours (full-time job for half the year) »Wealth gap between young and old is at its widest point –Typical household headed by 65+ year-old has net worth 47x greater than household headed by someone under 35 »Price discrimination –Typically not merit-based –Impact on lower income and minority groups –“Scholarships come and go, but high tuition is forever”

6 U V C O N F I D E N T I A L // T R A D E S E C R E T Crisis of Affordability The Canary in the Higher Ed. Coal Mine Law school applications have gone from 100,000 in 2004 to 59,400 in Twice as many law graduates as estimated job openings.

7 U V C O N F I D E N T I A L // T R A D E S E C R E T Seeing Impact Now »43% of small private and midsize state universities failed to meet budget for both freshman enrollment and net tuition revenue »BUT approximately half of institutions that claimed to hit their budget were reporting against downward-revised budget numbers –And 40% of institutions that revised their numbers downward did so more than once

8 U V C O N F I D E N T I A L // T R A D E S E C R E T Crisis of Governance »Missions tend to be multifaceted, complex and vague »Sometimes there’s a double-bottom line »More often, so many bottom lines, there’s really no bottom line at all »How do fiduciaries exercise appropriate governance? »Symptoms: –Growth in noninstructional staff (up 240% from 1975 to 2005) –Athletics –Research?

9 U V C O N F I D E N T I A L // T R A D E S E C R E T Lazy Rivers

10 U V C O N F I D E N T I A L // T R A D E S E C R E T Lazy Rivers »Texas Tech spent $8.4M on a waterpark with a lazy river and waterslide, paying for it with an incrase in student fees. »Auburn has developed a $52M waterpark including a 45-student paw-print-shaped hot tub and a 20-foot wet climbing wall, paying for it by raising its student activity fee from $7.50 to $200. »Pensacola Christian has put in a $1M wave rider. »North Dakota State is building a waterpark with a 36-foot vortex of swirling water, a fireplace on an island in the middle of a pool, a rain garden to mist lounging students, and a zip line atop it all. »Clemson is developing a 38-acre Lakefront property to include “blobs” – floating mattresses placed so students can jump “like [on] American Ninja,” says the University’s director of recreation. »Louisiana State is building a lazy river that will spell out the letters LSU in the school’s signature Geaux font. Missouri has a lazy river, waterfall, indoor beach club, and a grotto modeled after the one at the Playboy Mansion. »Missouri State has put in a waterpark complete with zip line and lazy river, but insists on calling the lazy river a “current river” because Missouri State students are “not lazy.”

11 U V C O N F I D E N T I A L // T R A D E S E C R E T Where is the Focus? »Quality –Arum and Roksa study showing one-third of students showed no improvement in critical thinking, analytical reasoning or written communication –Less time spent on school work (one-third spend less than 5 hours per week) –Average is 27 hours in total – roughly same time commitment as kindergarten »Diversity –75% of students at 200 most selective colleges come from top quartile, only 5% from bottom quartile –80% of whites attend top 500 schools, while 75% of minority students attend schools outside of top 500 »Technology –Are universities considering educational technology expertise in determining board composition?

12 U V C O N F I D E N T I A L // T R A D E S E C R E T Exogenous Forces 11 Digital Disruption Public to Private Globalization

13 U V C O N F I D E N T I A L // T R A D E S E C R E T »Global media phenomena »Actually More of the Same »But Represented Something Important Technology: MOOCs and the Spice Girls 12

14 U V C O N F I D E N T I A L // T R A D E S E C R E T The Promise of Technology for Higher Ed. 13 We are here Stage 1: Accessibility Stage 2: Affordability Stage 3: Efficacy

15 U V C O N F I D E N T I A L // T R A D E S E C R E T Start with Simplification 14 »Steve Jobs hated complicated manuals, saying products needed to be so simple that a stoned freshman could figure them out. »The only instructions for the Star Trek game he built for Atari were: ‘1. Insert quarter. 2. Avoid Klingons.’… »If there’s one product or service that should be designed so that a stoned freshman can figure it out, it’s higher education. »Complex rules are hard to follows. Complexity is the enemy of completion.

16 U V C O N F I D E N T I A L // T R A D E S E C R E T Competency-based Learning 15

17 U V C O N F I D E N T I A L // T R A D E S E C R E T Competency-based is Simpler and Cheaper 16 Simplicity »Competencies laid bare before prospective employers »Relegated to the dustbin of academic history: –Failure –Credits –Transfer –Financial aid (?) Affordability »Online delivery = half traditional delivery »Competency-based = half of standard of online

18 U V C O N F I D E N T I A L // T R A D E S E C R E T Immersion: Focus and Flow 17 »Middlebury language schools »Controlled focus vs. focus by choice »Theory of flow: –Highly challenging work –Student has sense that skills are above average and more than adequate to succeed with the work –Goals are clear and feedback is consistent »Likely solved by adaptive learning and gamification

19 U V C O N F I D E N T I A L // T R A D E S E C R E T Promise of Adaptive Learning 18 Size Matters Larger student community interacting with learning objects = more effective the learning system = better student outcomes

20 U V C O N F I D E N T I A L // T R A D E S E C R E T Power of Gamification 19 »70% of gambling revenue »Only game materially improved by technology (gamification): –Illusion of control –Appearing to operate on variable payout –Near misses 30% of the time –Increased arousal (bells and whistles) –Immediate gratification

21 U V C O N F I D E N T I A L // T R A D E S E C R E T Technology Also Changes Classroom 20 What Works: The New Consensus 1.Flip classroom so “transfer of information” occurs ahead of class 2.Incorporate of technology in the classroom (handheld clickers or smartphone apps) to quickly ascertain (typically via multiple choice questions) whether students have understood key concepts 3.Integration of active learning techniques to improve understanding of key concepts, including: a)Peer learning, where students with different answers pair up and try to convince each other b)Group problem solving c)Project-based learning d)Studio/workshop/experiential learning The above ideally including “perspective transformation” wherein students change their frames of reference by critically reflecting on their assumptions 4.Through technology (again), ascertain whether learning has occurred i.e., do more students now understand key concepts?

22 U V C O N F I D E N T I A L // T R A D E S E C R E T The Smartphone Challenge 21 What Doesn’t Work: The “Holy Trinity” of Online Learning – content/lecture, discussion, assessment – doesn’t translate to smartphones »Navigating curriculum challenging on smartphones –Small screen –Less patience (5 seconds to load, max.) »Discussion boards can work well on smartphones –Ubiquity counts for a lot in discussions –However, smartphone posts are likely to be much shorter and informal than faculty are used to (e.g., 140 characters) »Assessments –Formative assessments work well –Summative assessments do not »Solution: purpose-built apps –Very different from allowing mobile access to courses with traditional online architecture

23 U V C O N F I D E N T I A L // T R A D E S E C R E T Will Degrees Go the Way of Debutantes? 22 »Return on investment »Opacity »Too exclusive

24 U V C O N F I D E N T I A L // T R A D E S E C R E T »What is a degree? –Specific knowledge + skills –General education –Stick-to-itiveness to complete multi-year endeavour –Certification that student met standards for admission –Intangible benefits (network, fun, athletics) »Introduction of Competency Management Platforms The Great Unbundling 23

25 U V C O N F I D E N T I A L // T R A D E S E C R E T Competency Management Platforms 24

26 U V C O N F I D E N T I A L // T R A D E S E C R E T Powerful Assessments and Remediations 25

27 U V C O N F I D E N T I A L // T R A D E S E C R E T Future Consumer-driven College Sonographer Nurse Medical assistant Significantly more revenue from employers/ placement and less reliance on Title IV Colleges begin to look like RPOs and vice versa 26

28 U V C O N F I D E N T I A L // T R A D E S E C R E T Future Competition 27 ~100 RPOs with over $100M in revenue (vs. ~ 20 for-profit universities)

29 U V C O N F I D E N T I A L // T R A D E S E C R E T Education-as-a-Service 28 SaaS Model: Adobe Creative Suite becomes Adobe Creative Cloud Lessons from Salesforce.com: »Decide on your business model –There may be many »Build product from Day 1 with focus on customer experience and value –Unbundle into component parts »“Customer for life” mindset –Major opportunity from EaaS model »Agile product development –Salesforce has 500 product releases per year »Governance for better, faster decision-making

30 U V C O N F I D E N T I A L // T R A D E S E C R E T »DIY hasn’t had impact »JIT will become new standard Do-it-Yourself (DIY) vs. Just-in-Time (JIT) 29

31 U V C O N F I D E N T I A L // T R A D E S E C R E T Returning to Current State of Market… 30 »Elite universities will be fine –But probably will feel pressure to adopt double-click degrees, e-portfolios »Midtier universities have all accoutrements of elites, without the quality (isomorphism) »43% of small private and mid-size state schools failed to meet ‘15 budget »Another 30% only hit budget after revising budget downward »Beginning to see “Great Hollowing Out” consistent with other service sectors (retail, restaurants)

32 U V C O N F I D E N T I A L // T R A D E S E C R E T Changes Non-Elite Schools Must Make 31 1.Decide on strategy: discount or premium 2.Strategy drives delivery: discount = 100% online; premium = blended - 80% online - 20% onground, immersive, employer-centric 3.No more lazy rivers (and unbundle athletics and research) 4.Shift onground instruction to active learning/dynamic classrooms 5.Migrate from seat-time to competency-based 6.Refocus on competencies employers care about: predictive cognitive skills + work attitude/self management skills 7.Connect with employers – both onground and online 8.Create “skunkworks” to make lots of small bets; invest in winners, disregard failures 9.Increase outsourcing / private partnerships (e.g., solve for smartphones) 10.Stay close to emerging human capital data revolution (LinkedIn and The Great Unbundling)

33 U V C O N F I D E N T I A L // T R A D E S E C R E T International Consumers Also Have a Say 32 Challenges in emerging markets: »Irrelevant Curricula »Spoon feeding »Underfunding »Cheating »Shortage of prestigious, world-ranked institutions

34 U V C O N F I D E N T I A L // T R A D E S E C R E T Import/Export Opportunities Today: Importing Students Tomorrow: Exporting Programs »Chinese universities: Blackpool before easyJet »Opportunity to become U.S. and UK’s largest export »International demand will prolong the life of degrees »Brands matter, a lot –Including brands from outside higher education 33


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