The Business of Higher Education

In recent years, colleges and universities have encountered increasing pressure to operate like businesses. As the logic goes, businesses must survive in a cutthroat climate of unfettered competition and thus these organizations need to be leaner, more efficient and more responsive to the needs of their customers than not-for-profit organizations, such as colleges and universities. In the unforgiving crucible of free market competition, only the fittest businesses (e.g., those that deliver the highest quality products at fair market value), will survive. Of course, the seemingly endless government bail-outs following the 2008 financial crash cast a dubious light on the above claims, nevertheless, the notion that higher education should embrace a more business-like organizational philosophy remains deeply entrenched. Colorado State University’s recent hiring of its first-ever System Chancellor offers an illuminating example of this sensibility in practice.

On May 6, 2009, the CSU Board of Governors announced the hiring of Joe Blake as its System Chancellor. It is fair to say that Joe Blake is a somewhat curious choice for CSU’s System Chancellor because, although Blake can brag of extensive contacts in the Denver business community (Blake’s most recent job was as president of the Denver Metro Chamber of Commerce), his resume is conspicuously absent of academic credentials. Indeed, it is noteworthy that, in assembling its search committee, the CSU Board of Governors intentionally excluded faculty and student representatives. In response to protests concerning the limited composition of the chancellor search committee, Michelle McKinney, a public relations representative for the CSU System Board of Governors, stated baldly, “Search committee members were chosen for their knowledge and understanding of complex, billion dollar businesses.” In other words, from the perspective of the CSU Board of Governors, Colorado State University is a business. Therefore, when it comes to choosing the University’s leaders, the CSU Board of Governors considers input from successful businesspeople to be more pertinent than the opinions of academics.

Viewing these events through the most optimistic lens, one could argue that vast changes are in the offing for higher education. In an Information Society, college degrees have become an ever more essential ingredient for success. Yet, indispensable as college degrees may be, with each passing year, students encounter more difficulty gaining access to and completing higher education. Escalating costs coupled with reduced public funding have shifted the burden of college finance onto the backs of individual students. As students face the prospect of accumulating home mortgage-sized debt over the course of their college careers, many gifted, but financially-strapped students will have no choice but to forgo higher education.

Somehow, some way, educators must find a way to change that dynamic: college and university leaders must find a way to make higher education more affordable–and soon! Insights from the business realm will certainly be helpful in that process. Business leaders are only too well aware of the hazards of running afoul of consumer expectations. When a valued good becomes excessively overpriced, consumers tend to take their buying power elsewhere. As a case in point, consider the Big Three automakers. Not long ago the Big Three were the titans of industrial America, but having fallen out of step with their customers, the Big Three have hit upon tough times. Once again, in a free market society it behooves organizations to deliver the highest quality products at affordable prices. Consumer loyalty is not inexhaustible.

Indeed, higher education must change in order to meet the needs of its twenty-first century students. Fortunately, I am pleased to report that higher education has undertaken a variety of initiatives to achieve precisely that goal. To begin with, most colleges and universities have implemented flexible degree programs to permit students with limited time and extensive non-academic responsibilities (i.e., full-time jobs, family obligations, military service, etc.) to progress toward college degrees at a pace that suits their lifestyles. In addition, many universities have employed the latest technologies in an effort to reach out to place-bound students. Thus, many students who lack the necessary mobility and wherewithal to pursue a traditional on-campus education can still procure college degrees via online or “virtual” higher education opportunities.

Changing times have dictated that higher education must also change. Thus far, higher education has responded admirably. Yet, as with all successful institutions, to ensure ongoing success, higher education must constantly seek ways to reinvent and improve itself. Still, as planners look to the future, I believe it is important to consider the strengths and weaknesses of higher education in as broad a framework as possible. Much as higher education can benefit from the insights of business leaders, it is essential to recognize that higher education is not a business, nor should it ever become one. While higher education can and must synergize with business in many ways, business and higher education are distinct pursuits. Elementally, business is a for-profit activity, whereas higher education is a not-for-profit endeavor. This is the case, quite simply, because education is not a commodity; one cannot purchase an education the same way that one might purchase a pair of snow tires. Education is an investment that requires years of patience, diligence and perseverance before one can hope to reap a windfall.

Certainly, education is not cheap. It has taken an enormous investment to lay the educational foundation for the Information Society. However, I think it is fair to say that, having laid that groundwork, the dividends realized thus far have been spectacular: because of its investment in higher education, the US has been able to maintain a position of leadership in the development of the Information Society.

Undeniably, one way of mitigating higher education costs might be to seek new ways of transforming education into a for-profit endeavor–one would expect such initiatives to be a topic of primary interest to business leaders. However, I wonder if it is possible to extract profit from higher education without simultaneously impoverishing it? Further, viewing higher education as a resource from which to extract profit represents the antithesis of the educational philosophy that has propelled the North America and other nations to the forefront of the Information Society. We have has achieved prominence in the global village by investing in, rather than siphoning wealth from higher education. Therefore, I believe it is possible for the us to continue reaping great rewards from higher education, but only by enhancing its commitment to access-for-all, and by maintaining its philosophy of education as a long-term investment in the future. We will continue to play a central role in the Information Society, but only so long as we recognize that the “business” of higher education is to lay the foundation upon which to build a more enlightened, democratic, and prosperous world for one and all.

Tweet This Post