The Real Story About Online Learning - Revisited III

Donald M. Norris, President and Chief Scientist, Stratgeic Inititaives, Inc.
Paul Lefrere, Partner, Strategic Inititaives, Inc.

This is the third of four blog posts on this subject.


III. Evolution of Learning Settings from Institutional to Open

The learning settings described in the first vector of evolution are institutional: Traditional colleges and universities (including their extension and continuing education divisions), for-profit universities, and learning enterprises in corporations. These so-called “institutional” settings will continue to be the primary players in traditional learning. But they will see their dominance shrink in the face of open learning environments that are the property of the student, not the institution. The challenge institutions face is to keep pace with both the changing nature of knowledge and competence, as well as the inexorable move toward greater value in learning and competence building experiences. Over time, open learning with the student at the center of a personal learning environment (such as a free-range learner) will be the predominant mode for the next generation of learners over the course of their lives.

Clear “stages” of open learning have not yet revealed themselves. They may emerge over time – or not. Several prototypes and expeditionary experiments have been described in earlier blogs. Some of the new forms of open learning environments and experiences are described below.

Peer-to-Peer Voluntary Associations. A recent article in Fast Company, “How Web-Savvy Edupunks are Transforming American Higher Education,” described the growing movement toward high-tech, do-it-yourself education. Some of these experiments reside within existing institutional settings, such as classes structured like role-playing, serious games that are being tested out in universities across the globe. Others are occurring in start-up organizations, like Peer2Peer University and the University of the People, attempting to bridge the gap between free online materials and low-cost education.

Neeru Paharia and Jan Phillip Schmidt have hacked together Peer2Peer University, which uses a Web site to enable would-be-students to convene and schedule courses, meet online, tutor one another, all facilitated by a volunteer. This is very much a demonstration of concept. Shai Reshef founded University of the People and has enrolled the first class of 300 students from nearly 100 countries. His goal is to offer bachelor’s degrees in business and computer science using open courseware and volunteer faculty for a price of about $4,000 for a four-year degree.

Other pundits, such as Richard Vedder, have mused about US associate degrees for as little as $2,000 (low by US standards, but not globally).

Formal Communities of Practice. Informal and formal communities of practice are common in the world of business and professional practice. These sorts of communities will become the focal points for open learning experiences in the future. Earlier blogs described the efforts of Oregon State University to create an Open Campus dedicated to community-based learning. Extension Divisions in land grant universities across the U.S. have offerings that could become the basis for community-based learning. Another example is the Food Safety Knowledge Network.

In their partnership with the Global Food Safety Initiative, Michigan State is developing the Food Safety Knowledge Network (FSKN), a program of food safety resources to efficiently and effectively reach competency at all levels of food safety. The FSKN will use open resource techniques (social networking, dynamic knowledge sharing and evaluation tools) to harmonize standards, practices, and training criteria. The FSKN pilot platform will be in place in late 2009 and will be rolled out globally in 2010. The FSKN will create a curriculum for food safety competency through partnerships with industry, government, academia, local/regional authorities, and other stakeholders. Coupled with a unique learning environment using face-to-face sessions, seminars, formal courses and on-line learning, it will present a low cost, fast and efficient way for professionals to achieve competence across all sectors of the food safety industry.

Community-of-practice learning is likely to thrive in the Web 2.0 environment. Its permutations are virtually limitless. One of the advantages of learning based on real communities of practices will be the capacity to receive early warning of the emerging competences that are essential in particular fields of endeavor. Communities of practices will be able to identify, promote, and develop fresh competences at warp speed among large bodies of participating practitioners.

Free-Range Open Learning. Over time, individual learners will have access to a vast constellation of open-learning experiences and resources. These will range from formal communities of practice and competence building networks, to easily configured, temporary learning cohorts. Using these tools and experiences, individuals will be able to develop, maintain, and extend their competence in a variety of ways and at very reasonable prices, or even at no cost. Even when “mature”, this array of alternatives will be perpetually changing, adapting, and improving.

This environment will constitute a “free range” option for learners who appreciate alternatives to traditional or even transformed institutional learning. These options will enable most adult learners to more easily advance and maintain their competences by acquiring new and emerging skills at a pace that institutional learning cannot match – at least not today (just as there is no “I” in team, there is no “academic senate” or “curriculum committee” in open learning).

Open learning environments and experiences will interact with institutional learning, assessment, and certification experiences. Institutions that do an excellent job of competence-based learning may become certifying entities that charge a fee for authenticating competences acquired through open learning, and awarding credit, certificates and degrees for a fee. This is one way in which the two evolutional paths of learning and competence with link together. Mash-ups to encourage, facilitate these linkages are under development in Europe, in partnerships between business/industry (a primary source of information on the skills that graduates need to be employable) and universities. By way of an example, read through the description and materials on Project Role, co-funded by the European Union (http://www.role-project.eu).

Many more examples exist across the globe, in a virtual archipelago of open learning experiments, prototypes, and expeditions. Recently, some pundits have questioned whether open learning endeavors can survive when they lose the seed funding from foundations, the European Commission, and other parties that have sustained ‘first gen’ open resource initiatives. A more apt set of questions may be: Which government(s) or corporate entities from across the globe will step into the breach to invest in open resources in the future? Will they do so in a manner that will disrupt traditional offerings and create opportunities for continuing reinvention of learning and competence building? How will this foment a change in the balance of competence power and the competition for talent across the globe?

Many Models, Competing for Learners. These two evolutionary paths do not suggest that any single model will become dominant for all learners, at all stages of their development. But they do mean that institutions will need to sort out their competitive position and determine how to provide a range of options that will be optimally attractive to their learners. Merely digitizing the traditional and hoping for the best will not be a winning strategy.

It will be possible for institutions to learn from emerging best practices and skip stages of evolution. In particular, institutions that aggressively practitice online, blended, and e-learning at Stage I can raise their sights and transform their practices to make a jump shift to Stages III and IV, with further evolution to Stage V. Such leaps could become feasible with strong campus-level leadership, recognizing the strategic potential ob online learning.

The Real Story About Online Learning - Revisited II

Donald M. Norris, President and Chief Scientist, Strategic Initiatives, Inc.
Paul Lefrere, Partner, Strategic Initiatives, Inc.

This is the second of four blog posts on this subject.

II. Two Evolutionary Transformations in the Models of Learning and Competence Building

In studying the strategies and actions of the market leaders, one should examine two evolutionary transformations that are ongoing and interconnected. These involve both the business models and learning settings of online learning. In our view, these dimensions are undergoing transformations that will shake higher education’s world.

First, there is the evolution of the business models for institutions and formal learning enterprises from today’s traditional premium price model (bundled learning, assessment, and certification; a focus on what constitutes a quality education/institution; and traditional roles for faculty) to a transformed model (unbundled and reimagined teaching, learning, assessment, and certification; value-based in times of scarce resources; reinvented roles for faculty, mentors, instructional designers, and peer-to-peer learning; and changing the financial model to achieve financial sustainability and lower prices to the consumer).

Second, there is the evolution of the learning setting from the traditional institutional setting to a transformed, open setting in which “open” includes but is not limited to Open Educational Resources (OER). Open also means that users have far more choice today about what they learn, how they learn it, what if anything they pay for it, and who they learn it with/from (e.g. peer-to-peer learning and community of practice-based learning). Some of these transformations are being incorporated in traditional institutional settings. Others are occurring outside the realm of accredited institutions and formal learning enterprises.

So let’s begin by discussing five stages in the transformation of the business model for online. These are presented in the graphic “Evolving Models of Learning and Competence Building” attached at the end of the white paper. The horizontal axis represents progressive transformation of business models toward greater value and financial sustainability. The vertical axis represents progressive expansion of open learning practices, both within traditional institutions (represented by the expansion of the “institutional arrow” in each successive stage) and in emerging peer-to-peer environments, communities of practice, and “free range learning.”

This diagram presents these stages as logical, sequential stages of evolution for describing the current state of development of online practices. The reality is substantially more complex. First, individual institutions may demonstrate characteristics of several stages at any point in time. Second, individual institutions may experience a jump shift and make a leap from Stage I to Stages III or IV if they achieve strong leadership, learn from the best practices of others, and develop or acquire infrastructures, processes and competences. And third, the boundaries between institutional and open learning experiences will blur as institutional practice evolves into States Iv and V.

Stage I: Online/Blended Learning Innovations, Traditional Financial Model. The first stage is one in which traditional institutions enable their faculty to put courses online and progressively create various forms of online, blended, and e-learning offerings under the institutional brand. These offerings are often more expensive to develop and launch than the traditional institutional offerings. They do not achieve any breakthrough economies, may use traditional or adjunct faculty, and replicate many existing practices. They do not use technology to truly transform faculty roles and patterns of interactivity. In the long run, this digitize-the-traditional and incrementally-improve the approach to online learning is a transitional state. This model will not be sustainable in the face of national and global competition.

Online/blended/e-learning innovations can work to reduce the overall cost to students and the institution, even if the tuition charged to students is the same or greater than the tuition for face-to-face instruction. Online students not only save on transportation costs, they reduce the opportunity costs of travel time, lost income, and such. This can be a significant savings. Blended learning can save institutions the cost of new facilities by reducing classroom demand and allowing institutions to reduce the impact of commuter student traffic and use of on-campus facilities and services. Campuses in hyper-growth metropolitan areas like the University of Central Florida use combinations of online, blended, and e-learning to “sculpt” enrollments at their multiple physical campuses and in virtual learning spaces.

Moreover, the market leaders in online learning have shown that technology can be used to unbundle and transform the existing classroom-centric model for individual courses. The course reinvention efforts of Carol Twigg at the National Center for Academic Transformation (NCAT) have improved performance and student success and reduced costs in virtually every physical or virtual course they have redesigned. Some institutions are scaling these processes to departmental, institution, or even system level. But the greatest challenge to scaling these approaches across the institutions has proven to be getting faculty and institutional leadership seriously interested in reducing costs, which some associate with diminishing quality. In times of constrained resources, institutional leaders need to focus on value, as well as quality. A genuine commitment to performance measurement and improvement requires a dedication to cost reduction in ways that does not diminish outcomes

These efforts at course reinvention can be a good start, but they are not sufficient to meet the challenges of establishing financial sustainability, post-recession. Sustainable online learning requires pervasive adoption of unbundling, reinvention, and a value focus to the entire online learning enterprise.

Many institutions remain stuck in the digitize-the-traditional-but-don’t-reinvent stage of development. In the WCET survey, most institutions were still searching for satisfactory, sustainable models for organizing and delivering online learning. They will continue to search fruitlessly unless they apply the following principle: The key to evolving new, sustainable models for online learning is to utilize technology to:

• unbundle and reinvent teaching, learning, assessment, and certification;

• focus on value, not just quality;

• change the use and roles of faculty, mentors, and peer-to-peer learning; and

• transform business models by: 1) continuously seeking new income streams that can mitigate the need to continuously increase tuition to fill revenue gaps 2) reducing operational overhead (i.e. new buildings, parking lots, dorms) and other costs; 3) seeking lower price points and enabling more rapid completion of learning objectives; and 4) reducing the total cost of achieving learning goals.

We remain hopeful that online, blended, and e-learning innovators will seize the opportunity to move on to transformation when they understand the potentials provided by Stages II-V, the challenges provided by the open learning movement, and the imperative of the Great Recession. The following stages illustrate how this evolution is being followed by market leaders.

Stage II: Unbundled Offerings, Reinvented Practices and Business Models, Premium Price. This stage developed at the same time as Stage I, but in different organizational cultures: for-profit institutions (and a small group of not-for-profit universities that deploy these techniques).

The for-profits such as the University of Phoenix, Capella University and others have utilized technology-supported learning to:

• reinvent their production function (using team-developed resources in all instances of creating courses ),

• engage mentors (who are not content experts) rather than traditional, tenure-track faculty, and

• deploy world-class (high-quality, high-value) online support services.

These providers also vet their offerings with employers more extensively, continuously and effectively than traditional universities.

This is neither black magic nor rocket science. The UK Open University pioneered many of these practices over 30 years ago as a not-for-profit, although recently it seems to be working hard to reinvent its mix of practices to fit today’s circumstances and to move to Stages III-V. Other non-profits like Regis University have emulated these methods. There may be as many as 1 million learners involved in these kinds of learning experiences.

These institutions focus on consistent, demonstrable outcomes and learning experiences especially attuned to the needs of working adult learners. The for-profits have achieved substantially lower production/delivery costs per student than traditional universities. This means paying close attention to class size: bigger means more opportunity to achieve economies of scale, without sacrificing quality of engagement and outcomes. Course materials are created by teams and used in all instances of the course. They utilize a core, standardized curricula to ensure consistency and quality of learning outcomes that, in turn allows for continuous improvements, refinements and ability to quickly incorporate new industry competencies. This practice affords economies of scope. At the same time, these institutions are able to charge a premium price for their offerings because of the recognized value they provide learners (courses taken sequentially, accelerated time to degree, lack of family/work barriers, and premium online services). The higher resulting margin/profit (difference between price and actual cost) is invested in extending institutional brand, business/industry market research, and instructional technology/systems development costs.

In future stages of development, many of today’s for-profit providers may not be able to maintain their current premium price levels, in the face of competition now emerging at the low end (from no-fee systems) and at the high end (from innovators such as Capella University who have migrated to a more competence-based approach that achieves a high perceived value with learners). Moreover, Capella-type innovators will be able to compete on lowering the total cost of achieving learning and competence objectives and eventually become certifying enterprises. More discussion about that in the description of Stages IV and V.

Stage III: Unbundled and Reinvented Offerings, Drive Down Marginal Costs, Offer a Market Competitive Price. Institutions like the Western Governors University, Florida State College at Jacksonville’s Open College, and Lamar University have reinvented the production function and faculty roles to achieve many of the financial advantages realized by the for-profits. They have used technology to unbundle and reinvent teaching, learning, assessment, and accreditation. While their methods vary, the basic principles are fundamentally the same.

These institutions pass the savings on to learners in the form of more competitive tuition – a strong value proposition. They charge a market-competitive rate that covers the marginal costs of learning. These institutions can grow based on tuition alone, rather than appropriations from their respective states. This is critical during times of financial recession, when student demand spikes and state resources decline.

Achieving this stage is essential for public institutions attempting to attain financial sustainability. It is a strong value position – but even this value position must be improved over time in the face of the withering competition that is emerging globally.

Stage IV: Continued Reinvention, Reduce Market Price and Total Cost of Competence, Respond to Competition. Inexorably, the affordability crisis will force learners and their families to search for better value/options. And the presence of new, lower-price alternatives will enable potential learners to shop around and consider different options.

Online providers will be driven to continue to reinvent their offerings, enhancing their value proposition through a variety of practices:

• create better, more amenable, and more effective, engaging learning and support experiences;

• demonstrate that their programs are linked to highly valued, demonstrable competences and employability success;

• decrease tuition and fees;

• reduce total cost of competence by reducing time to achieve competence objectives, certificates and degrees; and

• provide graduates with social-networking-based mechanisms for refreshing and maintaining their competences on an ongoing basis. Think of alumni associations as communities of practice, -- in particular disciplines, rather than as general purpose institutional associations. This could be especially attractive for online graduate programs that could be a ‘competency observatory” for their alumni, identifying emerging competences even before they are standard industry practice/requirements?.

These conditions will affect the for-profits as well as traditional institutions. The reduction in time to degree will be achieved in at least three ways:

• giving credit for prior learning more effectively and extensively,

• achieving competency-based approaches that unbundle and give credit for already acquired, demonstrated competences, and

• improving K-12 preparation for college-level work through P-20 improvement initiatives and partnerships. These efforts can substantially reduce the total cost of learning, over time.

A key factor in the price competition will be international competition. India- and China-based providers have entered the online tutoring business for K-12 and postsecondary education. They will soon be a force in online learning, as well, through acquisitions and repurposing of institutional providers in the US. Also, social networking-based learning offerings from commercial providers, perhaps using Second Life-like virtual and augmented reality environments, may soon enter the scene at very competitive price points.

Stage IV will be a time of withering competition and feverish efforts by institutional providers to demonstrate their adaptiveness and nimbleness in order to attract learners and offer distinctive, superior value propositions. Increasingly, open learning practices will be incorporated into institutional offerings and accepted for credit if they involve “recognized” providers (accredited with established articulation agreements). Fast, fluid, flexible, and affordable will be the watchwords of the day. Institutions will focus on developing infrastructure, support services, processes, and reward systems necessary to support these efforts.

Stage V: Continued Reinvention of Practices, Institutions Certify Both Institutional and Free-Range Learning. The graphic illustrates that with each successive stage of evolution, institutional learning also expands upward, embracing more open learning techniques within institutional learning practices. During Stage V, institutions will have incorporated open learning practices into their offerings and will accept and certify high-value outcomes provided by other institutions. In addition, selected leaders will have developed or acquired the capacity to certify free-range learning and competence building pursued by individuals independent of formal institutions.

This is a natural extension of the credit-for-prior-learning and competence-based learning movements. Not all institutions will have the core competences to become certification agencies for learning. Such institutions would likely charge a certification fee for conferring a degree for learning achieved elsewhere, in order to award valued certificates or degrees. This will prove attractive as peer-to-peer and “free range” learning opportunities develop. It is precisely the growth of non-institutional learning opportunities that is the second vector of evolution in e-learning methods, models, and practices.

It could take yearsfor this system of free-range learning and certification of competence to develop and be recognized and accepted by US employers. Decades, if the traditional pace of transformation persists. Or, it could happen more quickly than we think (it is already starting to happen elsewhere in the world). When it does, a learner who is home-schooled, self-taught or educated outside of the United States in a non-accredited institution, could take competency test/s and be granted a learning certificate or even a degree.

Leading institutions that develop the infrastructures, practices, processes, and core competences to demonstrate or certify competence will become certifying entities and/or license their practices to other institutions. This could be a lucrative business for forerunners like Capella University or Western Governors University who have led the way in competence-based learning and performance.

The Real Story About Online Learning - Revisited (Part I)

Donald M. Norris, President and Chief Scientist, Strategic Initiatives, Inc.
Paul Lefrere, Partner, Strategic Initiatives and Professor, University of Tampere, Finland

Based on comments on our earlier blog on this topic, we have expanded it, added a graphic, and divided it into four parts:

I. Following the Example of Strategic Market Leaders
II. Two Evolutionary Transformations in the Models of Learning and Competence Building
III. Evolution in Learning Settings from Institutional to Open
IV. Getting Strategic About Online Learning

We shall post these over the next few days.

I. Following the Example of Strategic Market Leaders


Over the past several weeks, online learning has been in the news. Two points of reference are especially worth noting.

First, The Chronicle of Higher Education and Inside Higher Education both reported on the recent report on online learning by Kenneth C. Green, Director of the Campus Computing Project. While there is a clear global trend towards lower-cost (even no-cost) online learning, this survey of senior officials at 182 public and private nonprofit colleges, conducted in conjunction with the Western Cooperative for Educational Telecommunications (WCET), found that many US institutions actually charge a premium for their online offerings through higher tuition, fees, and special charges.

This survey also found that many US institutional leaders were uncertain about the profitability of their online operations or how they compared, performance-wise, with traditional offerings. Many institutions were still searching for effective organizational models and structures for online learning. Dr. Green also found that many institutions were reticent to provide their data in ways that would reveal their practices.


Second, last week the 15th Annual Meeting of the Sloan Consortium explored the state of best practice in online, blended, and e-learning. The progressive growth of online learning has been chronicled by Sloan’s Annual Survey. By extrapolating 2008 figures, Dr. Frank D. Mayadas, founder of the Sloan Consortium, projected that in 2009 well over 4 million students may be enrolled in at least one online course in the United States. Even this figure underestimates the penetration of online practices.. Many students are concurrently enrolled in blended and e-learning offerings at colleges and universities that that are enthusiastically rolling out new elearning offerings from coast to coast and beyond.

Yet Sloan’s emphasis has been on the mainstreaming of online learning, rather than on the transformational potential of online practices to deconstruct and reinvent educational practices and change the financial business model for higher education. It is our contention that transformational potential is the real story about online learning. Selected market leaders are demonstrating these practices, today.

Understand the Leaders, Not Just the Entire Population

None of this is truly surprising to anyone familiar with the development of online and blended learning in US higher education. Online and blended learning are broadly practiced, but true breakthrough practices are very limited to a set of market leaders, many of them for-profit institutions.

Online, Blended, and e-Learning, Broadly Practiced. Initially, most institutions use online learning to replicate their courses and curriculum practices in an online mode, making adjustments for the differences between the nature of online and face-to-face experiences. From this initial development phase, they progressively improve and enhance the online experience and discover the power that blended learning offers, combining online and physical elements to create more engaging student experiences. Blended learning has become the preferred mode for many practitioners, enabling institutions to reduce the need for classroom space and change pedagogical practices. Finally, institutional leaders incorporate the lessons learned from online and blended offerings to further enhance all face-to-face instruction with technology resources and techniques that work. As a result, face-to-face instruction morphs into ”e-learning.” Institutional leaders leverage this range of technology-supported learning offerings to improve the efficiency and effectiveness of their offerings and to provide learners with a portfolio of choices. Offering a range of instructional choices is especially attractive to adult learners and students who are working (the most recent data suggests that 70% or more of full-time enrolled students are working at least part-time.)

Breakthroughs by Market Leaders. Unlike emerging practice elsewhere in the world, the majority of US practitioners have not attempted systematically and systemically to unbundle learning, assessment, and certification and reinvent faculty roles. Nor have they attempted to fundamentally change the business model or price points for learning. For these reasons, looking at the herd is less instructive than understanding the global leaders and extrapolating their innovations into the future.

By examining the breakthroughs achieved in online learning by today’s current or emerging market leaders, both in the United States and abroad, we can better understand the real story about the potential future of technology-supported learning in all its settings and permutations. In this paper, we use the behavior of market leaders and trend setters to sketch the likely evolutionary path of online learning. We also describe how the vast number of mainstream practitioners can position themselves to take advantage of this evolution and position themselves for success while others, less well-prepared, face the withering competition to come.

Why Has Online Learning Become Even More Strategic?

Up to this point in its development, online learning has been waging a battle of acceptance with faculty, institutional leaders, and even some students. Research has shown that online learning has progressively come to be regarded as equivalent or even superior in some ways to traditional, face-to-face learning, especially among 18-24 year old and working adult learners and faculty who were early adopters..

But the Great Recession and the American Higher Education Affordability Crisis have raised the stakes for online learning not just in the U.S., but globally. Transformed versions of online, blended and e-learning hold the potential to be essential elements of the reimagining of American higher education, post recession, to make it sustainable worldwide. Four factors make this so:

• Addressing the American Affordability Crisis. Learners and parents are facing an affordability crisis of unprecedented propositions. In America, the cumulative effect of year-after-year escalating costs of tuition has outstripped the rate of inflation for 30 years running. Gradually American higher education a pricey if not unattainable proposition, for many potential learners. The current recession, rising unemployment, and collapse of the housing market have reduced the net worth of families and changed the educational plans of many learners.

Community colleges and for-profit educational providers have experienced explosive growth in demand this year as learners turn to more convenient, local, high-value, alternatives to mid-ranking public four-year institutions and private colleges. Some community colleges in especially strapped states like California have turned away legions of students this year. Truly transformed learning, using combinations of online, blended, and e-learning, has the potential to both reduce the total cost of achieving competence objectives and improve the success of learners by providing a range and mix of options that meet their personal and financial needs.

The pages of The Chronicle of Higher Education and Inside Higher Education are peppered with stories of community colleges, in particular, whose leaders are experimenting with increasingly transformative mixtures of solutions to these challenges.

• Achieving Financial Sustainability Requires Transformation. The model for funding public institutions is broken, as has been reflected in the diminishing relative level of public support for education in general over the past three decades. During recessionary times, community colleges and other public four-year institutions typically experience their greatest enrollment demand at a time when state and local resources decline. Transformed learning can change the business model so that the marginal cost of learning is consistently reduced to less than the price of tuition, allowing growth to meet demand, even during recession. Market leaders have already achieved this goal. Post recession, the rest of American higher education needs to adopt and scale these practices.

• Transformed Online Learning is a Part of Broader Institutional Strategies. Institutional leaders have spent 2008 “staunching the flow” of the resource impact of the Great Recession. They recognize that they must use 2009-2012 to aggressively leverage stimulus funding and discover not just efficiencies, but innovations and transformations that will enable them to achieve financial sustainability when the stimulus money is gone. Transformed online, blended, and e-learning is one of a set of even broader institutional strategies to achieve financial sustainability that we mention in our white paper, “Linking Analytics to Lifting out of Recession.”

Jobs, Jobs, Jobs. The link between learning and employability is tenuous and must be strengthened if America’s to regain its competitive position in the global economy. Learning experiences must be more closely linked to active, immersive application and to the workplace. The capacity to perpetually enhance competences to maintain or raise competitiveness is enhanced with online learning and Web 2.0 tools and patterns of interactivity.

As we look at the future potential of online learning and competence building, we should learn from market leaders how to leverage transformation in business models and learning settings, as described in the next series of blogs..

The Real Story about Online Learning

This week, online learning has been in the news. Both The Chronicle of Higher Education and Inside Higher Education reported on the recent report by Kenneth C. Green, Director of the Campus Computing Project. While there is a clear global trend towards lower-cost (even no-cost) online learning, this survey of senior officials at 182 public and private nonprofit colleges, conducted in conjunction with the Western Cooperative for Educational Telecommunications (WCET), found that many US institutions actually charge a premium for their online offerings through higher tuition, fees, and special charges.

This survey also found that many US institutional leaders were uncertain about the profitability of their online operations or how they compared, performance-wise, with traditional offerings. Dr. Green also found that many institutions were None of this is truly surprising to anyone familiar with the dereticent to provide their data or to illuminate their offerings.

Understand the Leaders, Not the Herd. None of this is surprising to anyone familiar with the development of online learning in US higher education. Most institutions use online and hybrid learning to replicate their existing classroom practices, online. Unlike emerging practice elsewhere in the world, they do not attempt to unbundle learning, assessment, and certification. Nor do they attempt to change the business model or price points for learning. For these reasons, looking at the herd is less instructive than understanding the global leaders and extrapolating their innovations into the future.

By examining the breakthroughs achieved by true market leaders, both in the US and abroad, in online learning, we can understand the real story about the future of technology-supporting learning in all its settings.

Two Evolutionary Transformations in the Models of Learning and Competence Building. In understanding the leaders, one should examine two evolutionary transformations that are ongoing and interconnected.

First, the evolution of the business models for institutions and formal learning enterprises from the traditional higher education model (bundled learning, assessment, and certification; quality-focused; traditional business model with premium price) to a transformed model (unbundled and reimagined learning; value-based, changingthe financial model with lower price to the consumer).

Second, the evolution of the learning setting from the traditional institutional setting to the transformed, open setting of peer-to-peer and community of practice-based learning.

So let’s begin with five stages in the transformation of the business model for online learning toward a focus on value.

First Stage in Business Model Evolution for Learning Institutions: Replicating Practices Online. The first stage is one in which traditional institutions enable their faculty to put courses online and create various forms of online offerings under the institutional brand. These offerings are often more expensive to develop and offer than the traditional institutional offerings because they do not achieve any breakthrough economies, they use traditional faculty, and replicate many existing practices. They do not use technology to transform faculty roles and patterns of interactivity. In the long run, this digitize-the-traditional approach to online learning will not be sustainable in the face of national and global competition.

The market leaders in online learning and the course reinvention efforts of Carol Twigg at the National Center for Academic Transformation have shown that technology can be used to improve performance/success and reduce costs in virtually every physical or virtual course. Sustainable online learning requires the pervasive application of these principles to the entire online learning enterprise

Many institutions remain stuck in the digitize-the-traditional-but-don’t-reinvent stage of development. In the WCET survey, most institutions were still searching for satisfactory, sustainable models for organizing and delivering online learning. They will continue to search fruitlessly unless they apply the following principle. The keys to evolving new, sustainable models for online learning is to utilize technology to:

• unbundle and reinvent teaching, learning, assessment, and certification;

• focus on value, not just quality;

• change the use and roles of faculty, mentors, and peer-to-peer learning; and

• transform business models by continuously seeking new income streams that can reduce the need to charge users, reducing costs, seeking lower price points and enabling more rapid completion of learning objectives, reducing total cost of achieving learning goals..

The following stages illustrate how this evolution is being followed by market leaders.

Second Stage in Business Model Evolution: For-Profit Universities and non-Profits that Emulate Them. This stage developed at the same time as Stage 1, but in different organizational cultures: for-profit institutions (and a small group of not-for-profit universities that deploy these techniques).

The for-profits such as the University of Phoenix, Capella University and the rest have utilized online learning to reinvent their production function (using team-developed resources in all instances of a course), engage mentors (not content experts rather than faculty, and deploy world-class (high-quality, high-value) online support services. These providers also vet their offerings with employers more extensively and effectively than traditional universities. This is not black magic or rocket science: the UK Open University pioneered many of these practices over 30 years ago as a not-for-profit, although like everyone it is reinventing its practices to fit today’s circumstances and trying to move fast to stages 3-5. Other non-profits like Regis University have emulated these methods.

These institutions focus on getting substantially lower production/delivery costs per student than traditional universities. This means paying close attention to class size: bigger means more opportunity to achieve economies of scale. Course materials are created by teams and used in all instances of the course. They utilize a core, standardized curricula that ensures quality and allows for continuous improvements, refinements and ability to quickly include new industry competencies. This can give economies of scope. At the same time, these institutions are able to charge a premium price for their offerings because of the recognized value they provide learners (who value shortened courses, accelerated learning for adults, lack of barriers, and premium online services). The higher resulting margin (difference between price and actual cost) is spent on marketing, profits, business/industry market research. and instructional technology/systems development costs.

In future stages of development, today’s for-profit providers may not be able to maintain their current premium price levels, in the face of competition now emerging at the low end (from no-fee systems) and at the high end (from innovators such as Capella University that have migrated to a competence-based approach that is more valued). Moreover, Capella-type innovators will be able to compete on lowering the total cost of achieving learning objectives and eventually become certifying enterprises. More discussion about that in the description of stages 4 and 5.

Third Stage in Business Model Evolution: Marginal Costs Driven Down to Less Than the Cost of Tuition at a Market Competitive Price. Institutions like the Western Governors University, Florida State College at Jacksonville’s Open College, and Lamar University have reinvented the production function and faculty roles to achieve many of the financial advantages realized by the for-profits. They have used technology to unbundle and reinvent teaching, learning, assessment, and accreditation.

But these institutions pass the savings on to learners in the form of more competitive tuition – a strong value proposition. They charge a market-competitive tuition which covers the marginal costs of learning. These institutions can grow based on tuition, alone, rather than appropriations from the state. This is critical during times of financial recession, when student demand spikes and state resources decline.

Achieving this stage is essential for public institutions attempting to attain financial sustainability. It is a strong value position – but even this value position will be improved over time and in the face of the withering competition that is emerging globally.

Fourth Stage in Business Model Reinvention: Reduction in Market Price and Total Cost of Degrees. Inexorably, the affordability crisis will force learners and their families to search for better value/options. Online providers will be driven to enhance their value proposition in four ways: 1) create better, more amenable, and more effective learning experiences; 2) demonstrate that their programs are linked to employability success; 3) decrease tuition and fees; and 4) reduce total cost of education by reducing time to degrees. This will affect the for-profits as well as traditional institution.

The reduction in time to degree will be achieved in three ways: 1) giving credit for prior learning more effectively and extensively, 2) competency-based approaches that unbundle and give credit for already acquired, demonstrated competences, 3) improved K-12 preparation through P-20 improvement initiatives. These efforts can substantially reduce the total cost of learning, over time.

A key factor in the price competition will be international competition. India- and China-based providers are entering the equation. Also, social networking-based learning offerings from commercial providers, perhaps using Second Life-like virtual and augmented reality, may soon enter the competitive scene at very competitive price points.

Fifth Stage: Some Institutions Become Certification Agencies. A natural extension of the credit-for-prior-learning and competence-based learning movements is for some institutions to become certification agencies for learning. Such institutions would charge a certification fee for conferring a degree for learning achieved elsewhere This will prove attractive as peer-to-peer and “free range” learning opportunities develop. It is precisely the growth of non-institutional learning opportunities that is the second vector of evolution in elearning methods, models, and practices.

It could take years for this system of free-range learning and certification of competence to develop and be recognized and accepted by US employers. Or it could happen more quickly than we think (it is already starting to happen elsewhere in the world). When it does, a learner who is home-schooled, self-taught or educated-outside-of-the-US in a non-accredited institution, could take competency test/s and be granted a learning certificate or even a degree.

Evolution of Learning Settings from Institutional to Open. The learning settings described in the first vector of evolution are institutional: Traditional colleges and universities (including their extension and continuing education divisions), for-profit universities, and learning enterprises in corporations. These so-called “institutional” settings will continue to be the primary players in traditional learning. But they will see their dominance shrink in the face of open learning environments that are the property of the student, not the institution. The challenge institutions face is to keep pace with both the changing nature of knowledge and competence and the inexorable move toward greater value in learning and competence building experiences. Over time, open learning with the student at the center of a personal learning environment (as a free-range learner) will be the predominant mode for learners over the course of their lives.

Clear “stages” of open learning have not yet revealed themselves. They may emerge over time – or not. But there are several prototypes and expeditionary experiments that have been described in earlier blogs. Some of the forms of open learning environments and experiences are described below.

Peer-to-Peer Voluntary Associations. A recent article in Fast Company, “How Web-Savvy Edupunks are Transforming American Higher Education,” described the growing movement toward high-tech, do-it-yourself education. Some of these experiments reside within existing institutional settings, such as classes structured like role-playing, serious games that are being tested out in universities across the globe. Others are occurring in start-up organizations, like Peer2Peer University and the University of the People, attempting to bridge the gap between free online materials and cheap education.

Neeru Paharia and Jan Phillip Schmidt have hacked together Peer2Peer University, which uses a Web site to enable would-be-students to convene and schedule courses, meet online, tutor one another, all facilitated by a volunteer. This is very much a demonstration of concept. Shai Reshef founded University of the People and has his first class of 300 students from nearly 100 countries. His aim is to offer bachelor’s degrees in business and computer science using open courseware and volunteer faculty for a price of about $4,000 for a four-year degree.

Other pundits, such as Richard Vedder have mused about associate degrees for as little as $2,000.

Formal Communities of Practice. Informal and formal communities of practice are common in the world of business and professional practice. These sorts of communities will become the focal points for open learning experiences in the future. Earlier blogs described the efforts of Oregon State University to create an Open Campus dedicated to community-based learning. Another example is the Food Safety Knowledge Network.

In their partnership with the Global Food Safety Initiative, Michigan State is developing the Food Safety Knowledge Network (FSKN), a program of food safety resources to efficiently and effectively reach competency at all levels of food safety. The FSKN will use open resource techniques (social networking, dynamic knowledge sharing and evaluation tools) to harmonize standards, practices, qualifications, and training criteria. The FSKN pilot platform will be in place in late 2009 and will be rolled out globally in 2010. The FSKN will create a curriculum for food safety competency through partnerships with industry, government, academia, local/regional authorities, and other stakeholders. Coupled with a unique learning environment using face-to-face sessions, seminars, formal courses and on-line learning, it will present a low cost, fast and efficient way for professionals to achieve competence qualifications across all sectors of the food safety industry.

Community-of-practice learning is likely to thrive in the Web 2.0 environment. Its permutations are virtually limitless. One of the advantages of learning based on real communities of practices will be the capacity to receive early warning of the emerging competences that are essential in particular fields of endeavor. Communities of practices will be able to identify, promote, and develop fresh competences among large bodies of participating practitioners at warp speed. And without involving anything remotely esembling a campus curriculum committee.

Free-Range Open Learning. Over time, individual learners will have access to a vast constellation of open learning experiences. These will range from formal communities of practice and competence building networks, to easily configured, temporary learning cohorts. Using these tools and experiences, individuals will be able to develop, maintain, and extend their competence in a variety of ways and at very reasonable prices, or even at no cost. Even when “mature”, this constellation of alternatives will be perpetually changing, adapting, and improving.

This environment will constitute a “free range” option for learners who appreciate alternatives to traditional or even transformed institutional learning. These options will enable most adult learners to more easily advance and maintain their competences and acquire new and emerging skills at a pace that institutional learning cannot match – at least not today (just as there is no “I” in team, there is no “curriculum committee” in open learning).

Open learning environments and experiences will interact with institutional learning, assessment, and certification experiences. Institutions that do an excellent job of competence-based learning may become certifying entities that charge a fee for authenticating competences acquired through open learning and awarding credit, certificates and degrees for a fee. This is one way in which the two evolutional paths of learning and competence with link together. Mash-ups to offer that link are under development in Europe, in partnerships between business/industry (a primary source of information on the skills that graduates need to be employable) and universities. As an example the description and materials on Project Role, an EU-funded initiative ( http://www.role-project.eu)

Many Models, Competing for Learners. These two evolutionary paths do not suggest that any single model will become dominant for all learners, at all stages of their development. But they do mean that institutions will need to sort out their competitive position and determine how to provide the constellation of options that will be optimally attractive to their learners. Merely digitizing the traditional and hoping for the best will not be a winning strategy.

This will be the subject of future blogs: How institutions can capitalize on the dual evolutionary paths of learning and competence building. This is critical to reimagining higher education to establish finance sustainability.

Action Analytics: Setting a National Agenda

I have just returned from three days at the first National Symposium on Action Analytics. In a short time, great strides were made in framing, shaping, and advancing this critical topic.

The event was co-sponsored by the Minnesota State Colleges and Universities and Capella University. This is the first time a major public university system and a for-profit university have collaborated on a venture such as this, seeking to attract thought leaders, practitioners, policy makers, and visionaries to frame a national agenda for advancing action analytics as an instrument and inititaive to support the nation's education, training, and workforce development imperatives.

The core planning and facilitaton team for the Symposium consisted of Dr. Linda Baer, Senior Vice Chancellor for Academic and Student Affairs, Minnesota State Colleges and universities; Dr, Michael Offerman, Vice Chairman of Capella Educational Company; Dr. Mark Milliron, Founder aqnd CEO of Catalyze Learning International; and Donald M. Norris, President of Strategic Initiatives, Inc.

The symposium was supported by two white papers, "Why Action Analytics for Higher Education?" and "Linking Analytics to Lifting out of Recession." The sessions consisted of a series of panels, presentations, and conversations about current best practices in analytics; what information, reports, and dashboards are needed; building analytics to support institutional and public policy; and building the next generation of educational technology tools to support action analytics. The final half day was spent discussing the issues relating to a national agenda for action analytics. This provided input to the core team who will prepare a draft white paper summarizing the need for and elements of a national agenda.

Future blogs will present the elements of the national agenda as they are framed, funded, and advanced.

Why Higher Education Must Transform, Post Recession

I just returned from the 2009 Governor’s Conference on Postsecondary Education Trusteeship in Kentucky, whose theme was “Raising the Bar: Access, Quality, and Success”. This Conference was hosted by the Kentucky Council for Postsecondary Education (CPE).

I had the privilege and pleasure of addressing the new trustees on the topic of “Re-imagining Higher Education, Post-Recession.” In the conversations with the trustees, we explored many of the topics, perspectives, and initiatives that have been featured on this blog over the past few months.

Many of the trustees are seasoned business persons and/or community leaders whose enterprises and local communities are undergoing their own reimagining processes. From their own experiences, many trustees appreciated that the one-two-three punch we have discussed in previous blogs could be applied to lifting out of recession:

• Aggressively harvesting productivity gains to improve efficiency and effectiveness;

• Leveraging innovation and transformation to change the nature of products, services, and experiences offered by enterprises and how they align with emerging marketplace realities and the changing value preferences of customers and stakeholders; and

• Seeking new revenue sources and fresh variations on existing revenue streams.

Yet several questions kept recurring. Why hasn’t transformation succeeded more broadly in higher education before now and what new tools and practices will make this possible? What is it about today’s external and internal conditions that can be leveraged to motivate colleges and universities to re-imagine themselves for the post-recession world? How can inertia be overcome?

To answer these questions, I took a brisk walk through recent history, describing the evolution of the tools of re-imagination and transformation. As benchmarks, I used three books published over the past 13 years by the Society for College and University Planning, which captured the evolution of the tools of transformation.


Transforming Higher Education: A Vision for Learning in the 21st Century - The Vision and the Voice. In 1995, Michael Dolence and I wrote Transforming Higher Education: A Vision for Learning in the 21st Century. In this book, we projected the substantial growth in post-secondary learning that was likely to occur by the year 2000 to meet the needs of the workforce. We projected the robust growth in the number of new learners both in the USA and internationally that would be required to meet the needs of the Information Age.

By our reckoning, it would be practically and financially infeasible to meet these needs through building traditional campuses and proceeding with the traditional “factory” model of higher education, which was based on the familiar processes and practices where teaching, learning, assessment, and certification are bundled together in classrooms directed by traditional faculty.



The Transforming Higher Education model suggested realigning higher education to meet the needs of the workforce and the changing perspectives of learners. This would involve redefining, redesigning, and reengineering processes and practices to create fast, fluid, and flexible educational options for learners. These options would have to range from the traditional to the transformed. We suggested that new technologies were evolving that would enable the deconstruction and reengineering of higher education, elements key to re-imagination. Our model arrived on the scene just as the tools were developing that would eventually sustain the World Wide Web – the Web browser, high-speed Internet access from/to homes and businesses, the consistency of Internet standards such as HTTP and HTML, and the wonderful facility of search and interactivity. The Web and its associated capabilities would become a fundamental enabler of deconstruction and reinvention of educational processes and practices.

Transforming Higher Education appeared in the same year that William J. Baumol and Sue Anne Batey Blackman wrote “How to Think About Rising College Costs” in Planning for Higher Education. In this seminal article, they observed that higher education and health care were “handicraft” professions which had not been transformed by the application of technology-enabled productivity gains. Products, services and experiences in other industries were being reinvented to reduce cost and enhance value, unlike health care and education. As a result, healthcare and education became and continued to become increasingly more expensive compared to everything else in the market basket of services.

If past trends were to continue, Baumol and Bateman extrapolated that the combination of education and health care could rise from 20% of GDP in 1990 to over 50% by 2040. Clearly, these escalating costs would be difficult to sustain, a point that has been affirmed by the current health care debate and by progressive cuts in the relative support of public higher education over the past 20 years.

Put simply, for fifteen years we have recognized the appeal of transforming higher education and the increasingly unsustainable nature of financing for handicraft approaches to health care and education. But we lacked the tools and practices to transform and the collective will to challenge practices that had made us successful. After all American higher education reigned as the global leader in quality rankings and in the educational attainments of our population. Absent an immediate crisis or a clear external threat to mobilize our energies and diminish our over-confidence, American higher education proceeded on its time-honored path.

Transforming e-Knowledge: A Revolution in Knowledge Sharing – The Web-based Tools of Knowledge Sharing and Communities of Practice. In 2001, Jon Mason and Paul Lefrere and I wrote Transforming e-Knowledge: A Revolution in the Sharing of Knowledge. This book described the emergence of the Internet culture and “Web 1.0,” the first generation of highly facilitated knowledge sharing in combination with easy and continuous interactivity, all based on the World Wide Web.

This book suggested that the combination of knowledge sharing services and pervasive social interactivity were gestating a new generation of online “communities of practice.” These communities would enable enterprises, professional disciplines, industries, and even regions or nations to provide perpetual learning experiences that fused with work, learning, knowledge building, and practice. Such communities of practice could prove to be fast, fluid, flexible, and affordable in ways that traditional higher education could not.

Our view was that Web-based engagement and interactivity were powerful instruments for transformation and re-imagination of perpetual, lifelong learning. We predicted that learning enterprises would experience cascading cycles of reinvention in their best practices for e-learning, knowledge management, and shareable educational resources. This would result in reinvented strategies and business models for e-learning, as well.

Transforming e-Knowledge anticipated the further evolution of Web 1.0 into Web 2.0, which enabled both the spontaneous and purposeful creation of social networks and open educational resources. Web 2.0 has also provided the means to provide rapid competence development for enterprises or other groups facing major dislocations and the need for speedy adaptation of new perspectives and practices. The open educational resources (OER) movement is most recognizably demonstrated by the OpenCourseWare Initiative, through which leading institutions like MIT and Carnegie Mellon University are making their entire body of course knowledge and tradecraft available to the world, for free.

These movements associated with Web 2.0 are key ingredients in the ultimate transformation of elements of higher education. They are creating the capacity to deconstruct educational delivery and interactivity and to create dramatically less expensive and more flexible options than the traditional higher education model. The availability of re-imagined options will percolate through higher education, resulting in a multitude of combinations and permutations of learning, demonstration of accomplishment, and certification. Operating within this marketplace of choices, learners, employers, policy makers and other stakeholders will decide which customized options meet their particular needs.

A Guide to Planning for Change – Combining Analytics and Alignment in Leading and Navigating Change. Web 2.0 provided the means for transforming learning and fusing work, learning and practice in ways that have never been possible. In addition, Web 2.0 has enabled the emergence of a new generation of analytics that allow leaders to focus on performance and value to shape the re-imagination of higher education.

In 2008 Nick Poulton and I published A Guide to Planning for Change, which prepared educational planners for crafting and executing strategy and building organizational capacity in the context of today’s changing environment for learning and work.

The major contribution of this book to the toolkit of transformation is its recognition that institutional leaders will need to enhance their use of analytics substantially in order to lead and navigate institutions into a sustainable future. This will require developing a strong culture of performance measurement and improvement. It will also require the careful combination of the tools of analytics with tools of alignment so measurement against targets can be aligned with institutional strategies and refined as the strategies are executed.

Put simply, these books illustrate three underlying forces or developments driving or enabling transformation of higher education:

• The fact that traditional approaches to teaching and learning are financially not sustainable as the means for addressing the boundless requirements of global, perpetual learning, cradle through career;

• Web-enabled revolutions in knowledge sharing and interactivity enable the deconstruction of traditional learning models and the creation new community-based modes of learning; and

• The capacity of Web-enabled analytics to illuminate performance and value are key factors in making the case for transformation and redefining financial sustainability.

The importance of these factors has been multiplied by the stunning events of 2008-2009, when we were hit both with financial disaster and the realization that we have squandered our lead as the global leader in mass education.

The Perfect Storm Arrives – the Great Recession, the Affordability Crisis, and Declining American Competitiveness. The collapse of the financial markets in 2008 and the resulting “Great Recession” hit higher education hard: reductions in state appropriations for public institutions, dramatic cuts in investment income that have most dramatically impacted private institutions, and traumatic declines in the capacity of parents and students to pay for higher education, today and continuing into the future. This affordability crisis will likely continue and perhaps worsen even after economic conditions improve.

The third element of this “Perfect Storm” has been the realization that the United States has lost competitive bragging rights to being the most highly educated nation. A fundamental ingredient in America’s economic strength, post-WW II, has been our investment in higher education, especially mass public higher education. We led the world in the percentage of young people going college and graduating. But over the past two decades, industrialized nations in Europe and Asia have invested heavily in education and some have surpassed us by some measures. We are now 14th in college attendance rates and our current generation of young people promises to the first that is less well-educated than their parents.

We are all familiar with the short-term adjustments pummeling campuses today: financial rescissions, travel freezes, short-term fixes, competing for and leveraging stimulus money, lay-offs, furloughs, pay cuts, creative approaches to financial aid, continuing to increase tuition to fill the gaps, compressing the time for an undergraduate degree from four (or more) to three years, and enrollment shifts to less-expensive institutions. In the short-run, financial exigency and expediency seem to be trumping innovation on many campuses. But campus financial officers anticipate worse budgetary challenges in two to three years, when stimulus money is gone. Moreover, demands for transparency and accountability are growing. .

To reclaim financial sustainability in the future, institutions will need to pursue aggressive, mixed strategies of operational efficiency, innovation, transformed and re-imagined processes and practices, and fresh revenues. Our current Perfect Storm of financial and competitive bad news opens the door to opportunities to overcome persistent resistance to change in higher education and to establish the financial sustainability that has eluded us for the past 15 years.

Transformation and Reimagination, Post-Recession. The call to transform higher education has attracted more and more supporters over the past 15 years. . Some innovations have scaled to entire institutions and flourished. Yet many other innovative and transformative projects in higher education have been “one-off” successes that have failed to be replicated by others. The following green shoots of transformation have appeared and spread around the higher education landscape,[you’ve already alluded to ‘green’] heralding future, enterprise-wide efforts:

• For-profit universities (e.g., University of Phoenix, Capella University, Strayer University, and a host of others) and public/private institutions that act like for-profits (e.g., Western University of Maryland University College, Regis University) have deconstructed and reinvented the traditional university model, deploying different best practices, strategies, and business models; many of these have been able to charge premium prices for their offerings; the for-profit higher education sector has been the fastest growing sector in higher education and its de facto skunk works;

• Some of these online institutions have taken a strong competence-based approach (e.g., Capella University, Western Governors University), leading to consistency of outcomes, demonstrable competences, and template/rubric-based grading and assessment;

• Disruptive innovators like Lamar University, on-line tutoring providers from India, and other on-line providers have offered re-imagined, online offerings at dramatically lower price points from traditional providers and even existing on-line providers; these are the harbingers of a coming generation of lower-price, “good enough” providers;

• Innovations in e-learning and blended learning have exposed most institutions and faculty to new approaches to digital scholarship and learning; some universities have formed unsuccessful online universities (e.g., University of Illinois Global Campus) while others have been successful (e.g. UMass Online);

• Carol Twigg and the National Center for Academic Transformation (NCAT) have established a solid, decade-long record of utilizing technology and faculty engagement to reinvent courses, dramatically changing patterns of interactivity and in the process reducing costs and improving student performance; these individual-course-based reinventions have been expanded in some cases to entire institutions (University of Hawaii) and even systems of institutions (University of North Carolina System);

• Many institutions (e.g., University of Wisconsin System, Minnesota State Colleges and Universities) have established successful collaborative degree programs and programmatic networks in high demand areas such as nursing; such collaborations set the stage for serious consideration of consolidating learning resources between institutions, and reducing the span of disciplines covered by faculty in particular institutions (e.g., Pennsylvania State System of Higher Education);

• The open educational resources movement (OER) has grown dramatically, providing open courseware and resources that are being embedded in course experiences across the world; President Obama plans to fund $500 M to expand the use of open educational resources to increase the reach and richness of open education resources; the extension of open resources into social networking-based learning experiences are being prototyped by Peer2Peer University and other fledgling organizations that seek to enable learners to mash-up courses of their own, demonstrate mastery, and achieve certification for learning, outside of a traditional university framework; and

• New approaches to green careers networks and communities are germinating across education and the workplace, breaking down normal institutional and employer boundaries; these include social networking-based communities.

Across the country, the institutional leaders with whom I have spoken have used the past year to cut, stabilize and respond to their institution’s Perfect Storm. This fall they seem poised to embark on serious efforts to re-imagine how their institutions need to function in 2020 to be successful and financially sustainable. They are poised to aggressively undertake actions over the next several years to put them on that path.

What Value-Based Questions Would Prospective Students Ask?

If students and their parents were evaluating institutions on value, what questions would they expect to have answered by institutions? Consider the following:

• What percentage of students like me (based on my high school GPA and test scores) graduate with a bachelors degree in dour years? What are the average, cumulative student loan burdens for students like me at graduation (given my average family income)?

• How satisfied are students like me with their experience at your institution? How do you know? Are the results posted on your Website?

• What percentages of your students work while attending colleges? What work study programs and other programs do you offer to enable students to pay for part of their education?

• What percentage of your graduates are employed six months after graduation? How satisfied are they? How did you find out?

• How do you assure that academic offerings in the programs I am interested in are aligned with the needs of employers and the marketplace? How do you know you are succeeding?

• Can students achieve a baccalaureate in three years at your institution (or even less)? How about a 3+2 or 2+2 masters degree (and in what disciplines)? Do you have pathways, bridging, concurrent enrollment and articulation programs with local K-12 schools, community colleges, and other institutions? How about cooperative education programs (and I what disciplines)?

• What mechanism and support services are provided to monitor and support student success – in real time? What are your career planning and placements services like? How highly do they rank in comparison with other schools?

• Does your institution offer “no frills” options? Do you offer a menu of optional learning and experiential electives (e.g., internships, study-abroad, collaborative networks and joint enrollment with international institutions)for extra fees?

• Will your institution allow mw to take online courses from other providers if you are not able to schedule an adequate offering of the courses I need to stay on track with my degree plan? How does this work? Do you utilize relationships with other institutions to provide specialty courses that are not in your catalogue or not available when I will need them?

• What does your institution do to hold down the cost of books, course materials, and “fees”? Do you provide online resources rather than expensive textbooks? Do you provide students with a range of cost options?

• Can I utilize online and/or hybrid courses, coupled with creative scheduling, so that I only need to come to campus one day a week? Why not?

Once enrolled, value-drive institutions are keen on maximizing their opportunities for success. They would expect their institution to provide support services and retention-building analytics and be able to answer the following questions:

• How am I succeeding in this class compared to my classmates? How does my performance compare with students who have taken this course in the past?

• What patterns of engagement have characterized students who have been successful in the past? How does this compare with my record? (e.g., participation in institutional activities, engagement in and use of online resources and materials, other factors)

• In my degree program, what levels of engagement, academic performance, and other factors have led to graduates who were successful in graduating and achieving employment (e.g., results derived from data mining and meta-analysis)

• What importance have co-curricular activities played in the academic and employment success of past graduates? Do you have evidence?

• What competences (e.g., disciplinary knowledge, communication, teamwork, leadership, and others) have employers specified as important for graduates in my major? How can I demonstrate my proficiency and accomplishments in these competences?

Not all students will be strongly value-driven. Some will seek educational and developmental experiences that are highly traditional. But more and more, learners and their parents will select institutions based on their capacity to delivery not just quality – but value.

Reimagining Higher Education Based on Value (3)

This is the third and final blog on this topic – at least for now. We will revisit this topic again, soon.

I’ll begin by referencing a provocative article, “the good enuf rvlutn” in this month’s Wired magazine by Senior Editor, Robert Capps.

Good Enough is Preferable for Many Products and Experiences. The basic premise of the article is that ubiquitous Web tools are succeeding by providing experiences that are “Good Enough.” Web-based disruptive technologies furnish consumers with a variety of product and service options and consumers are consistently choosing the ones that are not the highest quality, in the traditional sense of the term. Rather, they are choosing the options that provide accessibility, the new killer app. Accessibility is reflected in ease of use, continuous availability, and low price. The Web makes it easier to achieve all of these.

So MP3 tunes replace higher fidelity CD music; Hulu provides access to lower definition TV on your computer, whenever you want it; Kindle provides a reading experience without complex graphics and art but with instant portability for hundreds of titles; netbooks offer puny computing capabilities, but appeal due to accessibility and price; and virtual trade shows powered by solicitous sales avatars are expected to grow 500% this year, fueled by economic concerns and the desire to do business at bargain basement prices.

The same reasoning applies to physical products, such as Single Use Digital Cameras and stripped-down camcorders (Pure Digital’s Flip Ultra). Light and nimble products are highly popular in the afterglow of the worst economic downturn in 70 years.

The Good Enough effect is also reflected in more serious minded concerns, like healthcare. For example, consider a new initiative by Kaiser Permanente, the largest not-for profit medical organization in the country. For years, Kaiser Permanente has relied on building complete, self-sustaining hospitals, employing 50 doctors or more, offering one-stop shopping for a region. But since Kaiser has digitized all patient records, prescriptions, and supporting information, it could consider a distributed model of linking regional hospitals to smaller community-based clinics. So it has started to establish two-person micro-clinics in strip malls. These clinics can perform 80% of the functions. No pharmacy, no radiology, no receptionist – just a full-service kiosk. To receive services not provided by the local clinic, Kaiser members can go to a full-service Kaiser regional facility if they need one. The prototype has worked well and functions at roughly half the per-member cost of a regular Kaiser facility. Adapting this model will enable Kaiser to attract and serve many additional members – all at a reduced overall cost. It's building the first prototype in Hawaii.

So “Good Enough” is right for the times. Web 2.0-based technologies reinvent physical products and Web-based experiences, and redefine “value” for customers that value accessibility, convenience, and a lower price. Given options, people choose the alternative that best fits their personal value proposition. Good enough is not just satisfactory; it is often preferable. Unneeded "quality" is both wasteful and unnecessary in many situations.

Starting Off the Radar Screen. The Good Enough effect is the heart of Clayton Christensen’s message about disruptive innovations. Such innovations often start by offering existing customers greater convenience and amenity, making up for what they lack in “quality” by the traditional meaning of the term in that setting. Or they reach potential customers that have not been able to achieve or afford access to the existing offerings. Often these solutions develop off the radar screen of the market leaders. But they don’t stay there for long.

Good Enough in Higher Education – One-Stop Shopping. Higher education has seen Good Enough in operation for some time. In the late 1980’’s the University of Delaware used the occasion of implementing a new enterprise resource planning (ERP) system to re-imagine its approach to student services. It reconsidered the conditions under which students needed to talk to student services and policy specialists. Using the capacity of the new IT systems to manage and share knowledge more effectively, the University restored and converted an historic school house near campus to serve as a “one-stop-shop center” for student services. Rather than talking to specialized student affairs professionals, students were to meet with cross-trained customer service professionals who used the ERP systems to address every student need from parking tickets to pre-registration advice. Students needing real policy expertise were referred to policy specialists, over in the administration building. Students loved the convenience and didn’t mind talking to non-experts to solve most problems, then accepting a referral when necessary. Good Enough was, sure enough, good enough.

Over time, students began to access the university's on-line systems while waiting in line for a customer service agent, using the terminals lkining the walls in the one-stop center. Progressively, more and more forms, processes and procedures were moved on-line, and students made another “good enough” choice: they migrated from assisted service to self-service. Today, the University seeks to achieve the “90-8-2” standard: 90% of student problems can be solved in a full self-service mode, 8 % require some minimal assistance by staff, and 2% require a serious support effort by an expert staff person. The one-stop shop has been again transformed by “good enough.”

Good Enough in Learning. For the past two decades, many colleges and universities have been progressively increasing their use of adjunct faculty and shifting the balance of their faculty and teaching staff rosters. Driven inexorably by the need to control costs, adjuncts have proven “good enough” as part of the faculty mix.

The “good enough” concept has also been deployed in reinventing academic courses. The National Center for Academic Transformation (NCAT) has utilized technology-enabled redesign to shift responsibilities from full-time faculty in traditional lectures to teaching assistants, mentors, and other staff or to avatars, intelligent agents, bodies of knowledge, and other means of accessing knowledge, answering questions, and building competence. The roles of faculty have been deconstructued and reconstruicted in a multitude of combinations. All of these reinventions have been engineered by faculty working with the NCAT team. The “studio model for teaching mathematics has been particularly successful, producing better results (faster learning, higher proficiency) at lower costs. Sometimes “good enough” has proven actually to be better.

The academic model followed by the Western Governors’ University, University of Phoenix, and British Open University have all deconstructed and reinvented the role of faculty. The traditional model held that top quality was assured by having full-time faculty, content experts responsible for course design, instruction, testing, mentoring, and certification of competence. The deconstructed model used a single body of knowledge and standards of learning for all instances of a course, and used faculty as mentors to guide learners along their path. The result has been greater student satisfaction, consistency, and lower cost. All around, a better value.

There are still some faculty skeptics who believe that the only way to assure a “quality” result in learning is to have a full-time faculty content expert standing in front of a class of 25 students. But the truth is that technology enables other options that are not just “good enough” but often a much better value.

The Opportunity: Deconstructing and Experimenting with New Value Options. In earlier blogs we discussed the opportunity provided by President Obama’s plans to invest $500 M in developing open course materials, building on the open courseware materials developed by MIT, Carnegie Mellon University, and other institutions.

If these enhanced materials were made available as a utility to institutions all over the United States (and the world), they could create a pool of reimagined online courses that could become a critical part of the offerings in high schools, colleges and universities, corporate learning settings, and competence building in other settings. Some institutions could agree to use this body of knowledge and practice in all instances of its courses on particular subjects, and reinvent the roles of faculties and mentors, driving down the tuition that would be needed to be charged for such courses. Consider the following virtuous possibilities made possible by such a network of reimagined practices:

• Institutions could rethink and simplify their course offerings, especially in the core curriculum, and increase their flexibility; hybrid courses could become standard practice;

• Institutions could build greater flexibility into their ability to grow enrollments in particular courses, given the relative ease of rolling out additional online sections, themselves, or relying on other online providers;

• Participating institutions could provide their online resources and faculty mentors to be part of an “electricity grid for elearning” where demand greater than can be met by local resources in institutions could be furnished by surplus supply from other institutions or by institutions that consciously build surplus capacity;

• Institutions could reduce their own course offerings in disciplines where they were weak and provide the stronger offerings from other institutions; and

• Institutions could guarantee the ability of students to enroll in the courses they need, when they need then and even enable registering in advance to secure a full year’s schedule.

To provide optimal value, these offerings would need to be made available at reduced price points.

A Bonus for Public Institutions: The Ability to Grow on Tuition Alone. One of the banes of public colleges and universities has been the roller coaster ride of state funding: up in economic good times, down in recessions, requiring mid-year cuts, rescissions, and freezes. Such institutions often end up trimming course offerings at the very time that enrollment demand is rising.

If an electricity grid for learning infrastructure were in place it could utilize cadres of adjunct faculty, mentors and practitioners under the supervision of seasoned faculty, and reduce the marginal cost/price of rolling out an additional section to the point where it was less that the tuition price. In this circumstance, enrollments could grow even in economic downtimes.

Some variation on this theme must be part of a sustainable financial solution for public colleges and universities, moving forward. Institutions need to have the flex and access to surplus supply to be able to accommodate learner needs. Suppose an institution has 10 additional interested students for a section of Econ 101, on top of the 10 sections already filled with 30 students in each. Using the electricity grid, it could either attract 10 students from other surplus demand institutions or allow its 10 students to enroll in the online course at another participating institution.

When Michael Dolence and I wrote Transforming Higher Education: A Vision for Learning in the 21st Century, deconstructing and reimagining the roles of content-expert faculty was one of our primary points of focus. Web 2.0 tools are making that promise a reality.

Reimagining Higher Education Based on Value (2) – New Perspectives Are Needed

Let’s start again where we left off in the last blog. Reimagining higher education requires taking a fresh look at what the future might be, post-recession. This will be a world in which most industries – healthcare, agriculture, financial services, real estate, manufacturing, energy, and even education - will be under tremendous pressure to be more productive. Most will have realigned their processes and practices to more competitive, cost-and-price-sensitive environments.

For K-20 education to thrive, it must realign its perspective in the following ways, which are reflected in the figure at the end of the blog:

• Utilize Resources in New Ways. William Bowen characterized universities as “like a chamber music orchestra, a complex, interacting mechanism of many interconnecting parts,” which is one reason why it is difficult for them to save money. He also famously noted that “Universities raise all the money they can and spend all the money they raise.” For the past several decades, in the face of declining public support, university presidents have been pushing themselves to the point of exhaustion in raising external resources. While they must continue to assure adequate resources, an additional perspective is needed.

To thrive post-recession, leaders will need to focus on “optimizing value in an environment of resource scarcity.” Figuring out how to stretch existing resources through new approaches will be the new zeitgeist of the times.

• Evolve a Culture of Performance Measurement and Improvement. Most academic institutions are in the midst of evolving from a culture of reporting to a culture of evidence. Other professions, such as medicine, are already practicing “evidence-based medicine” and are evolving toward a culture of performance measurement and improvement, where the emphasis is on achieving successful outcomes through the most economical and effective means, carefully measured and demonstrated. This approach has yet to penetrate many practices, but it is regarded as the way of the future.

Higher education is heading down this path as well. But we lag behind medicine. Savvy leaders are positioning their institutions to focus on improving performance, changing practices to do so.

• Focus on Value. Most institutional leaders are committed to “quality,” but not to “performance.” For many institutions, success is measured in traditional ways: 1) benchmarking against a group of peer institutions, 2) copying successful programs and practices; 3) targeting comparative levels of resources, faculty salaries, and other traditional measures of quality and success. The driving force is quality, often equated with resource inputs and success on various ranking schemes.

On the other hand, value consists of a combination of: 1) the nature and quality of outcomes, 2) the essence of the experiences through which these outcomes are achieved, and 3) the cost/price associated with them. Quality is a monologue between peer reviewers and their perception of the institution. Value is a dialogue between each stakeholder and the institution. Our goal should be to optimize value delivered in continuing environments of resource scarcity.

• Differentiate Offerings. Traditionally, institutions create courses, certificates, and degrees and offer them to learners, who select what is on offer. This is mass education. Learners do have some capacity to tailor these offerings to meet individual needs, but not much. Over time, learners have achieved the capacity to receive credit for prior learning or courses from other institutions, to customize parts of their learning experiences, to select fresh certificate programs designed to meet emerging market needs, and other variations within the existing course/degree model.

The post-recession environment will likely require providers to furnish the capacity to customize their learning experiences. This will include the topics and contents covered, but also the learning experiences. Does your institution enable me to come to campus just one day a week? Can I test out of specific competences I’ve already achieved? Can I receive credit for high school concurrent enrollments and accelerate my progress to graduate with my baccalaureate in three years? Can I take courses online from another university if I cannot register for the offerings I need to maintain my progress? Can I lock in a schedule a year in advance if I pay earnest money for the privilege? This is mass customization and will differentiate institutions from one another.

• Use Partnerships with Other Providers, Online Learning, and Open Educational Resources. Today, many institutions cover a full range of disciplines, including those in which they are not distinguished. This is not sustainable. Post-recession, the most successful institutions will figure out how to focus faculty and research positions in areas in which they are distinguished, and rely on other institutions for offerings in other areas. Many of these will be provided through technology and some may be at significantly lower price points.

For example, a university would achieve competitive advantage if it decided to focus on those disciplines in which it demonstrated real strength, and offered courses in other disciplines in partnership with institutions that were distinguished in that area. Or the institution might choose to provide on-line courses from a for-profit provider. Or it could enable students enrolled at the university to participate in an online community of practice-based learning experience from another institution. The availability on a national utility of online open resources would help in building such capabilities across a range of academic disciplines.

• Become Transparent and Accountable. A key part of a achieving a culture of measurement and performance is providing access to information that really demonstrates value. Most institutions are awash in data, but make it difficult for learners, their families, outside policy makers, and public stakeholders to compare value at different institutions.

In the post-recession environment, learners, their families, and other stakeholders will demand greater transparency. The early signs of this are demonstrated by the Transparency by Design initiative currently being supported by the Presidents Forum group. http://presidentsforum.excelsior.edu/projects/transparency.html). In future, learners will require a much more detailed comparison of the capacity of institutions to meet their disciplinary and mass customization needs.

• Fast, Fluid, Flexible, and Affordable. Most institutions are currently based on a “take what we offer on our terms” model. When Michael Dolence and I wrote Transforming Higher Education: A Vision for Learning in the 21st Century, we suggested that higher education needs to become “fast, fluid, and flexible.” This battle cry was taken up by educators who applied our principles to their institutions . These included many of the for-profit learning providers. Post-recession, institutions need to become “fast, fluid, flexible, and (a)ffordable” if they are to appeal to learners.

This is not beyond our reach. Many of the for-profit institutions have established more flexible learner services, tailored offerings, and convenience customized for the working learner. If we deploy these tools and techniques, we could dramatically enhance the service capacities of institutions. The next generation of Web 2.0-based technologies will make it even easier to mashup learner services in ways that have proven impossible for tightly integrated enterprise resource planning (ERP) systems.

• Systematically Seek Systemic Solutions. Traditionally, institutions have taken a decentralized, siloed approach to solutions. Even successful innovations were seldom scaled to the entire institution. Colleges and universities dealt with the remediation problems that were passed to them by K-12, rather than systemically addressing the issues in the K-20 system.

In order to thrive in lifting out of recession, we are going to have to address both institutional solutions and systemic, cross-institutional solutions. We even will need to address cross-sectoral issues that span K-20 and deal with learning and workforce issues. Virtually every state in the United States has significant K-20 and workforce initiatives underway. These efforts need to be enhanced, redirected, and made part of every institution’s overarching strategy if we are to succeed in repositioning American higher education to thrive in the post-recession global economy.

The next blog will revisit the issue of Reimagining Higher Education Based on Value. We will focus on the different ways of transforming academic productivity and content to reduce costs and elevate value.