I’m probably being a bit grumpy about innovation. But I feel that the word is everywhere these days and especially in higher education. A quick glance across the media (old, new & social) landscape finds admonitions to innovate, claims of innovating, hand-wringing about a lack of innovation, and so on and so on. Am I nuts, is higher education actually innovating, or is this just the meme-du-jour?

In the for-profit world, being innovative can create a new market niche to exploit, can keep a firm viable in a changing environment, and can create fame and even fortune for the innovators. A plethora of articles, webinars and books keep appearing each month to convince you or teach you, or shame you into swearing an allegiance to innovation. One book I ran across provides a scorecard to assess how innovative your firm actually is. But the underlying premise is that true innovation doesn’t really happen if you are content with the business model that you have. So, what does that say about innovation in higher education these days?

Writers tackling innovation in higher education often point to unsustainable (another word for failing) business models as the impetus. The models are failing because of dramatic changes in the demographics of students, in funding (especially for public higher education),  in income distribution across the population, in advances in technology, in increased compliance requirements, in a growing disconnect between the cost of goods and the price people are willing to pay. If you think that all or even the majority of those factors are going to remain as is or continue on their new trajectories for the foreseeable future, would you still express confidence in your current business model? Seriously?

So we have an answer as to why innovation in higher education is being discussed so much. But how many cases of true innovation are really happening? We can find claims for innovation in practices to increase retention, in new pedagogies that seek to replace or at least re-imagine the lecture, in yet another redo of general education, in some off-to-the-side experimentation with online courses, etc. But all of these efforts, as interesting and newsworthy as they may be, are just tweaks to a failing business model. They may make for catchy marketing copy aimed at trying to sustain enrollments or increase donations, but at the end of the day, they don’t actually change the business model at all.

So what would a new business model for higher education look like?  John Hagel offers a way to think about creating new models along three dimensions: payment – what do we ask people to pay for and how do they assess the value that they receive; data – delivering value to the customer through data; and participation – connecting customers to each other in ways that create value. His approach led me to suggest two possibilities. One focuses on unbundling, while the other involves the value of personal data. Yes, I am speaking in the “corporatization of higher education” language, but we are talking about business models, after all.

Unbundling in higher education is usually focused on how digital technology makes it possible for students to take advantage of “stackable” degrees or credentials letting them take a course from here and there and there and assemble them – articulation on steroids. Or maybe a third party or blockchain acts as certifier. I’m more interested in unbundling all of the associated services that a campus provides – advising, career services, counseling, recreational sports, enrollment, fund-raising, technology, etc. Think about everything but the academics like we think about adopting software-as-a-service.

What would higher education’s business model look like if those services were no longer part of the campus payroll, but were operating costs, perhaps even available to the institution on a pay as you need plan. Maybe students could elect to “subscribe” to the services that they wanted or needed, rather than shell out a larger tuition that includes all of that and more. Perhaps I might want more counseling support and not any rec sports? These services could scale far better than any individual institution, holding out the possibility of higher value for less cost, especially when you consider the financial and productivity impact of employee turnover in our current we-do-it-all business model.

On to suggestion number 2. Hagel had a sentence that was an aha! moment for me:

“However, as data generation and capture becomes cheaper and more pervasive, new business models will likely emerge in which more of the value delivered to the customer resides in the data rather than in a product or service.”

Much like the health industry, the education landscape is about to be transformed through the infamous big data and predictive analytics. The advertised payoff focuses on the backend of the learning experience – how will this enable the institution to modify the inputs of curriculum, content and pedagogy to enable the student to learn more effectively. I’m not arguing that the student wouldn’t benefit from this adaptive learning environment, but what if the goal was actually to provide that student with the data? When you sign up for a degree, you are not only expecting to learn content and how to think critically and communicate, you are generating the data, your own learning DNA, that will define your path to lifelong learning. That DNA is highly prescriptive and will continue to grow in richness over time.

You now understand that your best computational work occurs when it is presented in a gamification format, while your ability to analyze a large amount of text is enhanced when it is broken into chunks that give you time to reflect on each part. Or perhaps you now know that you need to debate an idea before you fully grasp all of its nuance. In a 21st century world, all of us will be able to access the information and the people we seek in the format that best suits our needs. And those needs will include how we best learn, developed through our own experience of higher education, and available to each of us as a personalized algorithmic prescription for lifelong intellectual wellness. Higher education becomes the platform that equips students to engage and contribute and engage in our digital, networked world.

What other truly innovative business models for higher education might be possible if we think of payment, data, and participation ?