Customer crisis puts us at the crossroads
Universities around the world are handling the age of the customer in very different ways.
This is my conclusion from research we commissioned Forrester Consulting in the US to undertake. They surveyed 410 higher education leaders in six countries, including Australia, earlier this year. The findings informed a report just published by KPMG, The Future of Higher Education in a Disruptive World, which I prepared in consultation with my education lead counterparts internationally.
Forrester found quite different levels of investment in student experience, and the underlying capabilities that contribute to it. They also found quite different university self-ratings about meeting or exceeding student expectations.
While eight out of 10 institutions report they are putting student-centricity “at the centre of their strategic agenda”, only four out of 10 thought that they were meeting or occasionally exceeding expectations.
At the same time, nearly half rated their customer-centricity as greater than that of other private and public sector service providers across all industries; which to me seems implausibly high, now that I have left the sector and seen first-hand what a wider range of organisations have done. And curiously, 29 per cent of university respondents said that an important barrier to improving the experience was students who “arrive lacking key academic and/ or personal skills”.
It is an unusual sector where the provider blames customers for standing in the way of delivering them a service.
Our research and consultations suggest there is a lot happening in universities, but much of it is undirected, fragmented and lacking clear assumptions about the future. In the report, we attempt to provide an analysis and a clear set of choices that should be deliberately made, which I summarise here.
The golden age of universities is passing. The strong currents that supported 50 years or more of confident expansion are weakening, cutting across each other, and in some countries creating a whirlpool.
Human capital theory, equal opportunity thinking, a belief in publicly funded basic research and the explosion of international student markets have been a potent mix; a lilac wine that was sweet and heady.
But now, around the world, students are beginning to question the return on their investment, employers raise concerns about graduates’ fitness for future jobs, inequality is rising, risks in relying on international students have appeared and governments are directing research spending towards national priorities and present industry needs rather than blue skies. Almost everywhere, vocational education has been a casualty.
These stirrings don’t of themselves make for a crisis. What makes for a crisis is the relentless rise in the cost of education, as I have argued elsewhere in pieces about “cost disease”.
Higher education costs have been growing by more than inflation around the world.
Even that is not a problem when people are still prepared to pay the fees, but it becomes a massive one for universities when they aren’t.
That is the crunch that is coming across the developed world: creeping doubts about universities, combining with a reduced willingness to pay, at a time when costs just keep going up.
The pandemic has simply brought the crunch forward.
In The Future of Higher Education in a Disruptive World I argue that universities are all arriving at a crossroads and must make a deliberate choice about the path they are going to take: transform; optimise; do nothing in the hope that there will be time to change if things become clearer; or do nothing in the belief that they are invulnerable.
There may indeed be some invulnerable institutions justifiably choosing the fourth of these options. There may also be others in the third category which do have time because their situation is still favourable in relation to the currents I mentioned.
But most need now to decide between option one or option two – whether to transform comprehensively their business model and way of doing things, or optimise around a model they are sure will remain solid (and hope they are right).
Our research, based partly on what universities themselves say, suggests many are actually in a fifth category, making piecemeal investments in ad hoc change without a target institutional design in mind, and perhaps not grasping what other public and private sectors have painfully learned about the scale of investment and mindshift required to put stakeholders first.
It is a hugely complex challenge, as governments and industry around the world have found when trying to meet the heightening demands of those whom they exist to serve, while doing so in a way that is both efficient and sustainable.
In our report we set out a likely future, the characteristics of tomorrow’s providers, an enterprise architecture and an analysis of student experience. Plenty will disagree, but I’m bold and vain enough to think that those who disagree even that a crossroads is arriving are “courageous”.
To read the full report click here
This article first appeared in The Australian.