At the recent “Innovation+Disruption” symposium, speaker Clayton M. Christensen of Harvard told the audience of liberal arts college leaders that, “as many as half of all colleges could be in some form of bankruptcy or reorganization within 10 to 15 years.” The disruptive threat, as he calls it, will come mainly from lower-end competitors that use technology and new business models to capture a slice of the pie and then move up the market. See Chronicle article for more details.
A panel of liberal arts presidents was on hand to respond to Mr. Christensen’s prediction. For the most part they didn’t seem all that concerned and pushed back, claiming that a liberal arts education is not a commodity product and offers something very different from a lower-cost, online education—touting personalized, residential and experiential advantages. All of which are true, but are these administrators just too close to the situation and the liberal arts mindset to see the perceived threat?
I happen to think Mr. Christensen is on to something and administrators need to take notice sooner rather than later. We’ve seen this phenomenon in other industries for years. In retail it’s known as the ‘wheel of retailing’. The process of a discount retailer entering at the low-end of the market and then improving its products and services over time in order to boost prices and compete at a more upscale level, leaving the lower-end to be filled by a new entrant that repeats the cycle. The auto industry is often sited as a good example. When Japanese auto makers Honda, Nissan and Toyota first entered the U.S. market some 40 years ago they did so with cheaply made, inexpensive cars. It wasn’t long before we saw product and price enhancements, and each had introduced new luxury brands to compete with American-made luxury cars, leaving an underserved niche for cheaper, lower-end manufacturers like Hyundai and Kia. Granted, comparing cars to higher education is certainly not an apples-to-apples comparison, but there is value in looking outside of higher education for insights.
Something else to consider is that Mr. Christensen’s dire prediction focuses primarily on just one disruptive threat, although a major one—the impact of technology-driven online educators on our more established institutions. But what about the additional pressures of decreasing enrollments, calls for affordability, and the broader pressure to demonstrate the value of a higher education degree? Add these to the mix, and I do believe there is a reckoning coming in higher education with higher-end liberal arts colleges taking the brunt of the hit.
So if you agree that there is a disruption heading our way (and how could you not?), what are you doing to ensure that your institution is still standing among the shrinking pool of schools? Sure, issues like determining the role of online education at your institution and addressing affordability will need to be grappled with at the highest levels, and most likely with governmental influence, but there is also a role for us.
As marketers (and communicators, advancement and college relations professionals), we need to help our leadership see the threats and opportunities on the horizon. We need to be the voice of our most important constituents. We need to understand their current perceptions and what they value most about our institution. We need to help determine and articulate a distinct position of value in the minds of our audiences. And once we land on that brand positioning we need to integrate it across the institution and into everything we do, say, print and post; and then go about shouting it from the rooftops and bell towers. Essentially, we need to drive the branding bandwagon and push the fact that an integrated institutional branding effort is more essential than ever in light of all the disruptive threats that are being hurled our way.
As the panel of liberal arts presidents correctly pointed out, a liberal arts education is not a commodity, but rather a premium product. We need to help our leadership understand what it means to brand and market a premium product versus a commodity, with the key being differentiation. It’s the schools that differentiate themselves and position their worth in the eyes of the prospective student and other key audiences that will succeed. Otherwise, you can pretty well bet that your institution will be in the 50% of colleges trying to stay afloat in the deep end of the pool.
