This year has been dominated by discussions about the efficacy of for-profit education. Government officials, politicians, and the media have bashed for-profits for months. The chorus of criticism became so intense that many felt the days of for-profit education, as we have known them, were limited. Many for-profit executives were caught off guard by the level of scrutiny. A few privately shared with us that they did not know what the future would hold. Some still feel this way.
Some not-for-profit institutions saw the events of this year as a game changer. One provost told me that he was convinced that the public would now “finally understand how inferior the for-profits are” and would begin ignoring all their expensive marketing and attend non-profit schools “en masse.” One public university administrator declared the for-profits as “dying” and no longer a threat to the school’s adult-learner degree programs.
Last week, the Apollo Group, which operates the University of Phoenix, announced that new enrollments could be down as much as 40% in upcoming quarters. While a level of decline was anticipated due to increased regulatory scrutiny, the 40% sent shock waves throughout Wall Street. Within 48 hours, the University of Phoenix made another bold announcement – introducing its Learning Genome Project – technology that adapts to the instructional needs of each learner. Unlike the announcement regarding short-term enrollment declines, the latter announcement could be a real game changer that all institutions with online program offerings need to pay close attention to.
The Phoenix initiative introduced at last week’s EDUCAUSE conference, was referred to as “The Thinking LMS” in yesterday’s edition of Inside Higher Ed. While in an early design phase, this new platform appears to be an innovative twist of adaptive learning, in which instruction is adapted to a modality that is most compatible with a student’s individual learning style. Although adaptive learning is not a new concept and was not invented by the University of Phoenix, the school plans to publish research as it relates to its initiative and share some of the technology with other institutions. Further, a Phoenix executive declared that the school now “rejects the one-size-fits-all model of presenting content online.”
Phoenix’ announcement seems to convey that it seeks to be on the cutting-edge and wants to claim a leadership position not only as it relates to market share but in terms of instructional leadership. The school has also set the foundation for a market expectation that it knows many of its competitors (especially non-profits) will not be easily able to deliver on. This announcement could have easily come from MIT, Harvard University, or the University of Southern California instead of an institution who until recently was considered by many to be the poster boy for everything that was wrong with for-profit education. Yet, it came from the University of Phoenix.
No matter what one feels about the University of Phoenix, Phoenix’ positioning is illustrative of a marketplace that is learning and adapting. For-profit institutions are business enterprises. When regulations become tighter or other factors change impacting a market, savvy participants change too. The University of Phoenix is slowly but surely turning a negative and a potent business threat into an opportunity to reinvent and differentiate itself. If the Learning Genome Project is successful and the institution is ultimately viewed as being a key element of “revolutionizing” online learning, the events of the last year will become a powerful business opportunity for the institution.
Other for-profit schools are reinventing themselves as we speak. Those who are not, are wasting valuable time and jeopardizing their long-term survival. While many for-profits can innovate faster than non-profits, change still takes time in any organization. Cultures must change and it will take time to alter public perception after so much negative attention. This provides a unique but very limited window of opportunity for non-profit institutions.
During the next 6-12 months, as for-profits reinvent themselves perception-wise and structurally, non-profit institutions have an opportunity to introduce innovations, new programs, and support services that allow them to differentiate themselves. They also have an opportunity to lead while capturing additional market share and positioning themselves strongly for the future. This will be difficult for many non-profit institutions, as even the most agile non-profit schools cannot or will not innovate overnight. Those that can and are willing to move quickly, however, have a unique opportunity which will be key to their success (and potentially survival) on a long-term basis.
As the for-profits have influenced how education is delivered especially to non-traditional and adult learners over the past decade, for-profits are beginning to position themselves again to create the next wave of influence. Even the most selective non-profit institutions will be impacted as many of the features and benefits that will be pushed by for-profits will become expected by increasingly savvy-learners at large – specifically the adult learner segment that continues to see robust growth.
Our next article will address the 10 Major Innovations That Key For-Profit Institutions Are Developing Right Now to reinvent their images and products. This will be information that every for-profit and non-profit institution needs to know as we enter yet another phase of educational service delivery.