29 Jan 2019: The Juggernaut of Change Rolls On
At Eduvantis, my full-time job is studying every possible detail of what is happening in the business school marketplace and how well or not schools of all kinds – from the globally ranked top 10 institutions to large state schools, private schools of all sizes and everything in between – are adapting to the growing pressures of a rapidly changing marketplace.
In addition to being supported by a crack team of analysts, digital experts and consultants at Eduvantis, I also spend a considerable amount of time in the field, listening to deans, CMOs and program directors and gathering one-of-a-kind data.
For example, I was proud to have been asked this past fall to deliver conference presentations to 4 regional AACSB deans conferences and at the annual conference of Jesuit business school deans. In each case, we had the opportunity to conduct surveys in advance of the conference with deans from nearly 200 business schools on an array of issues critical to their strategy, programs, operations, use of technology, marketing, selling, budgeting and other factors critical to their competitiveness and success going forward.
In addition to these surveys, over the course of 2018, Eduvantis surveyed nearly 7,000 deans, business school professional staff, current students, prospective students and other stakeholders about issues related to these topics. We use this information to create a unique lens on the marketplace and a powerful set of benchmarks.
The general topic of our conference presentations was “How much of what is challenging business schools today is a function of true disruption – as defined by noteworthy thinkers such as Clayton Christensen – and how much is a function of just not effectively managing good old fashioned rapid change?” Our work also looked at the sometimes elusive topic of “strategy,” – as defined by another big thinker, Michael Porter, and whether or not schools were actually pursuing strategy (which involves a differentiated way of doing business) or were simply shuffling “tactics and taglines,” as I call it, as a means to “differentiation.” Quite a set of questions.
In this piece I want to share some observations – in no particular order of importance – based on what I’ve seen, heard and measured in the marketplace – suggesting some critical things schools must consider as they strategize, plan and execute in 2019.
1. Online Delivery
On one level, of course, you’d have to be living under a rock if you didn’t know that online something or other is a big part of our lives. However, here is the issue for schools – most schools are dangerously unclear as to exactly how to calibrate how they exist online and, objectively, why one choice or investment or another is right for them, in their market, in order to be successful.
This is the subject of a longer piece I will be writing, but for now consider:
- In nearly every geographic market we study, and we study most of them, considering programs in nearly every product category (PT/FT MBA, MS, MA, etc.) the only program in the market, with rare exception, that is growing and gaining market share is a fully online program.
- Right behind that, the next likely program to be gaining ground is a well-priced, credible, hybrid program. Fully face-to-face programs are typically going nowhere in terms of growth.
- To complicate things, this said, many schools, even though they have launched fully online programs, don’t know going in exactly how much it costs to effectively market the program – which gets higher by the day for a long list of complex reasons – and are not realizing their revenue targets (and if they carefully calculated the all in costs – fully allocated – of the program they would probably faint).
- The many stories we hear relating to the experiences schools are having with online program managers (OPM) are, shall we say, “complicated” as well.
2. Digital Marketing and Selling
The people researching, engaging with, being “sold” to and enrolling in graduate business programs are the most digitally savvy group in history. That’s worth a moment. The “brand experience standard” these individuals bring to their expectation of your digital ecosystem is Amazon, Rocket Mortgage, NIKE, Google, and a bunch of other websites many of us have never even heard of that would blow you away. These people search the web on their Apple Watches.
However, many – perhaps most – higher education marketing and selling ecosystems are behind where they need to be in order to be effective. This is another topic that supports an entire piece on the subject – or better yet a series – but here are a few warm ups to consider.
- At the top of the funnel, most schools are not close to budgeting what they need to gain the level of visibility necessary to generate the number of good leads required to meet their bottom of the funnel needs, or they are spending too much and getting too little, due to flawed strategy. (Or commonly, having been convinced by their digital agency that success is getting a lot of “clicks,” or even inquiries, only to realize that these leads are not of high quality and they have been pushing a bad strategy down the wrong hill).
- Funnel management – what happens after lead capture – is just not up to a par required to sell one of the ultimate luxury goods, a very expensive product that is fully discretionary (some will of course debate that), requires a significant investment of precious time, is something you purchase only once and carry with you the rest of your life as a key component of your professional identity. Yet again, the subject of a much longer piece, but enough said.
3. Data-Based Decision Making
This is the elephant in many of the rooms we find ourselves in every week.
- Programs have been designed based on a “belief” there is demand for them – with little credible data on the actual size or availability of the market. They are targeted to ill-defined “personas” in markets that may or may not actually be interested in “buying” from the particular institution – at least not the way the program is designed, priced and delivered. And things aren’t going well – perhaps across the school’s entire portfolio. Hands are wringing.
- The program has zero differentiated positioning, based on a thorough understanding of where a market opportunity actually exists (or not), in the particular competitive environment and in the relevant program category. The amount of money I see spent by institutions to “build their brand,” rather than first determining, objectively with data, the basis on which a differentiated brand or product positioning could be credibly established in their market, against their actual competitors, makes my head spin.
- There is, objectively, no strategy. If anyone is about to spend a large sum on a made up tagline – the program that will “jumpstart your future, put you in contact with the future, help you tell the future or otherwise use hands on learning, real-world experience, a technology focus, transform you or the world or develop leaders for a better world in the future, etc.,” please let me know. I’ll save you some money. Further, if the extensive market research you are about to commission involves simply asking only a group of internal stakeholders what they think are your greatest strengths, so you confirm what you probably already know, same deal.
Schools need credible, cold-eyed data and rigorous “business analysis” to address these and a growing list of complex issues required by the level of competition these days, and most just haven’t taken this approach.
4. The Overall Nature of Competition
This is a big one and the area in which true disruption is most at work. Put simply, there is a broad group of entities, other than traditional academic institutions, that are planting their flag and gaining ground in the sale and delivery of education. So as to not have this dismissed with some predicable responses – yes, there have been and still are entities out there that are simply not legitimate providers of anything deserving to be called education. They will, eventually, go away.
I am talking about major consulting firms, well-funded educational tech companies run by very smart, experienced, credible management teams, non-profits – all kinds of entities that have valuable knowledge capital, access to unique market information, long-term engagements with governments and leading corporations and access to technology platforms that allow them to scale – that are purposefully viewing these assets as something to be monetized in the traditional education category.
This topic, more than any above, warrants a longer treatment. I’ll be presenting at AACSB ICAM this year, along with Professor Ron Burt, a leading strategy professor from Chicago Booth and Sean West, CEO, Eurasia Group egX, our view on this topic. I’ll share some additional thoughts on this as we go.
Have a great year ahead – filled with rewarding and important challenges to tackle and unprecedented opportunities to capture. We hope to see and talk with you in the field.
If you have a question, please email me directly at [email protected].