I have learned a lot recently participating in a project on Global Higher Education led by Paul Jansen and Debby Bielak of McKinsey &Co. The project is sponsored by the Forum for the Future of Higher Education. Paul and Debby have collected a group of university CFO’s, a college president, and an old provost (me) together to apply a McKinsey sector-wide analysis to higher education. It is fascinating to see what such an analysis tells us about our world.
The team recently made a presentation entitled Higher Education Trends and Risks: Implications for Leading Institutions and Sector Performance at the annual Aspen Symposium of the Forum. My assignment was to talk about trends and risks for private research universities - in 15 minutes. I approached this impossible task by first apologizing to the audience for the egregious simplifications that I would have to make in order to describe the situation in 15 minutes, and then introduced my simple one-parameter model to describe the problems facing the research university. Since this model met with some approval at the Symposium, I thought it might be worth repeating here.
I began by describing what I called our Mission Box. Excellence - as defined by us in a very self-referential way - has become the visible driver of our mission. Our mission, in a very general way, focuses on traditional undergraduate education, graduate and professional education, and research. Focusing on excellence means that if it is worth doing (i.e. one of our mission foci), it is worth doing better. Doing it better costs more money, so at some point the customer can’t, or won’t pay for it, so we lose money. As a consequence, over time, losing money has become our very visible surrogate for excellence (my one parameter model). (Clayton Christensen, who also spoke at the symposium, has pointed out the often catastrophic outcomes of making your product better than the customer wants or needs. See also Disruptive Technologies:when great universities fail? March 3, 2006)