For-Profit Educators - Innovators or Villains?
By Nick Hedges, President & CEO of Leads360
The blogosphere loves to demonize big institutions, and few are cast more often as the villain than those in the for-profit higher education sector. Most of the hullaballoo revolves around admissions standards and practices, or the lack thereof. In a nutshell, the argument has been that for-profit educators have aggressively coerced unwitting, would-be students to sign up for studies that they cannot afford. Those students end up deeply indebted (usually to the government/taxpayer) and yet not more employable.
This populist view greatly simplifies and misrepresents what for-profit educators actually accomplish, for a host of well-documented reasons. If someone suggested a low-achieving child should be denied a high-school education because “it’s a waste of taxpayer’s money,” they would, fairly, be considered a lunatic (or worse), and yet saying the same thing about adults has gained popular support. America is the land of hope and opportunity, not pessimism and entrenched circumstance.
The objective of this article, however, is not to debate the for-profit education critics’ arguments, but to reflect upon reactions witnessed by many of the largest for-profit higher education companies to this scrutiny. It sits in stark contrast to the response of many large financial institutions to similar levels of criticism. The response says much about the state of innovation in the for-profit education sector.
This point began to germinate after reading an interview with a favorite business school professor of mine, Clay Christensen. He had this to say about the innovative approach of the University of Phoenix to teaching:
“University of Phoenix is spending about $200 million every year on making their teaching better… Do you know how much money Harvard spends every year to make its teaching better? Zero. The reason is that Harvard defines research as creating new knowledge, while The University of Phoenix defines it as finding new ways to provide knowledge. It blows the socks off of us in their ability to teach so well.”
The idea stuck because it mirrors the innovation we see among bigger for-profit educators when it comes to admissions and enrollment. As the CEO of one of the fastest growing technology companies in the education space, I am lucky to get a close up look at how these companies innovate, with three of the top seven for-profit educators utilizing our enrollment management platform. Our technology brings a new way of approaching enrollments that ensures conversations the institution has with each prospect exactly reflects the need and interest level of that prospect. This tool increases engagement yet eschews what I call “persistence warfare” i.e. making hundreds of calls and inundating prospects with email just for filling in a form on a website.
What is remarkable here is not that the big educators realized those tactics were out-dated but that they were able to embrace a technology like Leads360 so quickly. What took other verticals several years to catch on to; the for-profit education sector is embracing in a very short period of time indeed. Even more impressive is how these educators have adopted our platform. Without a doubt, for-profit schools have configured our software far more than any of the other 50 or so industries that use our product, and have pushed my product team for more ingenious features than Leads360 has ever previously produced. In many ways, entering the for-profit education vertical has breathed new life into a company that was already innovating at a fast pace.
Of course exceptions exist, many schools are fighting the “persistence war” and others neglect their prospective students by having chaotic systems and processes. But this is true of any industry. What is remarkable is that the for-profit education sectors largest companies are the most innovative, which is quite the opposite in the majority of sectors. Well-capitalized companies that are truly innovative, more often than not, significantly change the world we live in for the better. It’s a trend we see in the technology sector among companies like Apple, Amazon and Google and a trend that is clearly emerging in the for-profit education space.
Time will tell, but if my theory is correct, yesterday’s villains will become tomorrow’s saviors. That is quite fortunate - education in general needs saving quite badly.
