Diverse Conversations: The Business of Higher Education
There are many people that believe higher education could be changed for the better if colleges and universities were to think of themselves as businesses and the students as the customers. In theory, higher education institutions would operate more efficiently, which could potentially make students more satisfied with the education they are receiving and lead to lower tuition costs. For this week’s edition of “Diverse Conversations,” I sat down with Amy Hillman, Dean of the W. P. Carey School of Business at Arizona State University, to discuss the “the business of higher education.”
Q: Many people believe that colleges and universities operate optimally when they adopt a business model; this is much to the chagrin of their faculty. Should institutions operate as businesses or are the objections of the faculty warranted?
A: If we consider “adopting a business model” to mean responding to market demands, then I think it’s absolutely critical for colleges to do so. Universities need to be adaptable, embrace technology and innovation, and employ unique strategies. They should examine the needs of their surrounding communities, including businesses, which can employ future graduates.
For example, here at the W. P. Carey School of Business at Arizona State University, our new master’s degree in business analytics was developed as a result of industry demand for employees with strong training in analyzing big data, and more importantly, being able to make informed decisions from that data. We have also added more leadership, critical-thinking and negotiation components to our curriculum, as employers demanded more skills in those areas.
It’s important to recognize that the job market changes. For professional schools (like business schools), failure to keep up with market conditions leads to obsolescence, and students will suffer from a lack of employability. Schools need to be nimble like an entrepreneur, able to quickly respond to changes in the business environment or actions by competing institutions. Complacency within schools results in the same problems as complacency within businesses. After all, if our profession is centered on enabling student success throughout their careers, then we need to practice what we teach.
Q: When colleges discuss operating efficiently and optimally, many employees see this as code for layoffs and budget cuts. Are they right to be apprehensive?
A: Efficiency is critical for any organization, nonprofits (e.g. universities) included. Being able to do the most possible with the resources given (efficiency) means better service — and more of it — for all involved. Apprehension like you describe, however, seems to be more a matter of trust. If employers use code words to hide what is really happening, employees will lose trust, and that’s never good. It’s not good for employees or employers.
Q: Nowadays, a lot of higher education institutions are recruiting their presidents from the business world. What do you think of this trend? Does it make sense? Especially since we know that many of these recruits end up garnering mixed reviews?
A: I was unaware of this trend with the exception of the for-profit universities, in which case, it makes sense because their ultimate goal is shareholder value creation. In the context of not-for-profit universities, this is like hiring a president from the business world to run any not-for-profit. It would take a special candidate to take what is best from the business world and apply it to universities, while still keeping the mission of education at the forefront.
Q: There are people within higher education who believe that it is overly commercial, and almost becoming a caricature of itself. Is there some truth to this? What are your thoughts?
A: I would guess that this line of thought is aimed at the new and highly visible for-profit companies selling education. They have very large marketing budgets and opportunities to sometimes portray themselves in ways that don’t necessarily reflect the ideals of nonprofit universities.
As the world of higher education evolves, we need to keep the lines of communication open with both our employees and our other constituents, to create a shared vision. Big changes always seem daunting to some, but if we have a shared vision and shared goals, then we can also share a sense of accomplishment as we achieve those goals.
For example, a decade ago, the W. P. Carey School of Business became one of the first business schools to enter the relatively uncharted waters of online education from quality, traditional universities. By utilizing the same stellar faculty members in our other highly ranked MBA programs, as well as a phenomenal technical team, we have risen to the top of the offerings out there. In fact, this year, our online MBA program was ranked No. 2 in the nation in U.S. News & World Report’s first-ever numerical online-MBA ranking. Faculty and staff across the board took pride in this achievement.
Q: What current trends do you see in higher education, as it pertains to how it does business? How about business innovation?
A: Beyond the increased demand for specialized master’s programs like the business-analytics degree I mentioned above, another growing trend is that of offering interdisciplinary degrees. The business world has long recognized that true innovation comes from working across functional silos. Employers are telling us they need employees with the skills to bridge the gaps between engineering and marketing, between sustainability and finance, and between legal and strategy, as examples.
This is one reason the W. P. Carey School introduced new interdisciplinary undergraduate degrees five years ago wherein a student can get a B.A. in business with a concentration in areas including communications, global leadership, legal studies, public policy or sustainability. These interdisciplinary degrees marry the knowledge from the business toolbox with broad-based thinking in other areas.
The need for interdisciplinary thinking is also the reason we have so many dual degrees. All of our master’s degrees (MBA, M.S. in Information Management, M.S. in Business Analytics, Master of Accountancy, Master of Taxation, M.S. in Management, Master of Real Estate Development) can be paired with graduate degrees in architecture, engineering or law. This is also the reason we have strong partners like the Mayo Clinic, which sends M.D. students to the W. P. Carey School to get advanced degrees, including our MBA, while they are still in medical school.
Q: As far as the “the business of higher education,” what will it look like in the future?
A: Like other businesses, the business of higher education will continue to evolve. For example, I think the talk about MOOCs (massively open online courses) is overblown.
A similar situation happened in the media industry in the early days of the Internet. Despite all the fuss about free content, The Wall Street Journal was one of the first media websites to step up and charge for access. As they say, “Content is king,” and that worked out for the newspaper.
While MOOCs may be good marketing for colleges and universities, they have no clear business model. That doesn’t mean business schools can ignore them, but rather, as with any technological improvement, we can embrace them in a way that furthers our value propositions.
Well, that concludes my interview with Amy Hillman. I would like to thank her for consenting to this interview.