Unbundling Higher Education

A recent article, “If Colleges Are Dismantled, Consider the Impact on Their Cities” (The Chronicle of Higher Education, 16 October 16), makes a good argument for the negative effect that unbundling university services can have on a community.

But what is more important is the impact that unbundling can have on students.

The passage of greatest interest in the article is:

“Anant Agarwal of edX has argued that everything from admissions to food service to health care are extraneous to the institution’s central purpose. Information technology, through MOOCs or credit-bearing online courses, is key to achieving better, faster, and less costly course delivery.”

Unbundling is closely related to the failed concept of “core competency” created by C.K. Prahalad and Gary Hamel in 1990. Business leaders flocked to the idea of core competency, which suggests they should focus on work that the organization does best in its mission to serve customers and outsource ancillary functions and activities, usually with the twin goal of reducing costs.

But, what often happened was a reduction in the overall customer experience because the suppliers of outsourced goods or services delivered lower quality or were unable to solve customer’s problems in the same way the organization once did. The penny-wise, pound-foolish decision by leaders to outsource work that customers value often resulted in lower sales, a loss of market share, or both, which creates new opportunities for competitors.

Core competency, as well as unbundling, also seeks to transfer work from the seller to the buyer, thereby reducing the seller’s costs while assuming the buyer’s time has no cost or value. While buyers tolerate this do-it-yourself service model under certain conditions, there are situations where it reduces their overall experience and causes great dissatisfaction.

Core competency and unbundling, despite their many problems, happily hop-scotch across industries and gracefully fall into the arms of unsuspecting leaders who assume they offer nothing but upside and, remarkably, imagine no downsides. Higher ed leaders, if they choose to proceed, must do so with great caution.

The best leaders – whether in industry or academia – seek out and learn from the misfortunes of others, so those outcome does not happen to the organization they lead.

Anant Agarwal’s view, here and elsewhere, is all upside, no downside. Because he is affiliated with MIT and Harvard, he must know what he is talking about, right? Wrong.

Flipped Classroom? Yawn.

Flipped classroom? Who cares about that?

The big news is that the marketplace for higher education flipped from a seller’s market to a buyers’ market starting about 15 years ago. The transition is now complete.

The leaders of higher education institutions face an emergency situation, one that most still do not recognize. They still lead and manage as if it is still a sellers’ market. While flipped classrooms and other new pedagogies may delay the inevitable demise of many institutions, the fundamental change that must be made is in how organizations are led and how they are managed day-to-day.

Leaders must manage to the actual market that they face, not continue managing to the market they once had. That means every person in a leadership position has much to unlearn and many, many new things learn.

In my book, REAL LEAN, Volume Two (2007), I wrote a chapter titled “Manage to the Market” (Chapter 5). Here is an excerpt:

To a surprising extent, most businesses are managed as if they serve sellers’ markets when in reality they serve buyers’ markets. Managers often fail to recognize this inconsistency or how deeply it runs through their business. As a result, they continue to manage the business using mindsets, metrics, and systems designed to serve sellers markets. If you serve buyers’ markets, then you should use the management system that is most responsive to that market. There isn’t much in the way of choices; it’s Lean management…

Unfortunately, the executives have fallen into a massive trap that they cannot easily get out of. That is, they’ve grown their business using a system of management that was designed to serve sellers’ markets. The executives put into place a producer-focused system of management, not a customer-focused system of management. As a result, customers have to wait for the product or service, pay higher prices, and contend with poor quality. Their tolerance for that won’t last forever.

Invariably, circumstances change and so do customers, and the carefully-crafted producer focused management system, which was once a great asset, now becomes an even greater liability as customers realize they have alternatives. Executive ego, sunk costs, and deep-rooted bias toward maintaining the status quo make it very difficult for management to lead and make the necessary system-wide changes. This is why most brownfield businesses are unable to successfully transform from producer-focused sellers’ market to customer-focused buyers’ market…

It is simple human nature to want sellers’ markets. If we’re honest, we’ll all admit that we’d prefer to dominate the market or, better yet, have a monopoly. Why? Because it is easier. It is less work for management, it requires much less knowledge and fewer skills, we can manage from the office, it feeds our ego that we are smart and know what customers want, and it puts us in control – we like that a lot. A buyers’ market means you have to think a lot more and work harder…

Zoom forward to the present-day and think about what current state value stream maps tell us, beyond how we have been trained to interpret them. They depict the easiest and most convenient way to do business. Simply put it is a type of management that requires the lowest level of executive knowledge and skill. It serves managements interests well, but does not serve customers’ interests. The batch-and-queue processing shown in current state value stream maps is another way of saying to customers: “We’re not listening to you; we are doing what we want to do.” How very revealing…

You may ask, “What should I do?” You can start by accepting the reality of your markets… It would also help to gain a correct understanding of Lean as a management system and all of its wonderful nuances and inter-connections, and practice REAL Lean every day. Finally, be sure to establish a plan for long-term continuity in Lean management practice.

Remarkably, people still do not comprehend that conventional management was designed and developed for sellers’ markets, and that Lean was designed and developed for buyers’ markets. That is a life or death difference to institutions of higher education.

Performance-Based College Funding

In May 2016, the Century Foundation published a report titled: “Why Performance-Based College Funding Doesn’t Work” by Prof. Nicholas Hillman. It is a good analysis of why performance-based funding is unlikely to function as intended in higher education. You should read it.

However, there is one important misunderstanding contained in the report about the nature of work and, relatedly, incentives. Hillman says:

Assumption 2: There is a clear pathway for achieving results.

Incentive regimes work best when tasks are routine, non-complex, and when there is only one principal and one agent involved in delivering a service. In this environment, a manager is able to design and enforce a performance contract with an employee: if the employee does not perform, they do not get paid. This performance model has been found to work well in some industries, such as the classic example of windshield installation [Safelite], where agents have direct and unambiguous control over the production process.27

Windshield installation, whether in the aftermarket (Safelite) or in automobile manufacturing, is not as simple as the “one principal and one agent” service delivery portrayed in the report. There is a team of people in complex interactions that make it seem as if a task is routine and non-complex.

As a former supply manager in the aerospace industry, I know how industrial procurement and service delivery typically works. For Safelite to install a replacement windshield requires the work of multiple buyers (purchasing agents), each specializing in the procurement of individual items that are required to install a replacement windshield:

  • Windshield glass
  • Rubber gaskets
  • Windshield adhesive
  • Safety items such as gloves, safety glasses, and First-Aid kits
  • Vacuum to clean up broken glass
  • Windshield lift and installation equipment
  • Purchasing or leasing of service vans
  • Hardware and software to monitor service van location
  • Purchasing or leasing mobile payment terminals

And, it requires other people as well:

  • Human resources personnel to hire installers
  • People to train installers
  • Procurement of training materials (print, video, web)

Safelite management will want to minimize inventory carrying costs of the aforementioned materials while at the same time seek to satisfy customer’s needs 100% of the time. This, along with differing incentives for each group – often in conflict with one another – creates a complex situation that is managed using a combination of computer systems and human decision-making. Both are prone to frequent failure, resulting in material and labor shortages that leave customers disappointed and who will seek alternative suppliers of replacement windshields. In addition, material received by Safelite from its suppliers could be nonconforming on occasion, which will be another source of material shortages. Incentives for replacement windshield installers can, therefore, be rendered non-functioning on any given day.

While the installation of a replacement windshield can appear to be routine and non-complex, the effort made by many people that goes into making it happen on a daily basis is anything but routine and non-complex. Installation of replacement windshields is a collaborative task with varying incentives, and the idea that only one person is responsible for completing the task is completely wrong.


Assumption 2: There is a clear pathway for achieving results.

However, in public sector organizations the tasks are rarely routine or non-complex, and there is rarely just one principal and one agent involved in delivering a service. Students interact with any number of administrators, faculty members, and peers on a daily basis, meaning that the production of a college graduate is a collaborative task in which no single person is responsible for achieving a goal on their own. Unlike installing a windshield, the process is neither automated nor under the direct and unambiguous control of a single person. In fact, windshield installers may find the external incentives to motivate their behaviors, while college administrators and faculty members may be more intrinsically motivated to perform. Two decades of research on public sector motivation show that high-stakes external pressure can actually “crowd out” intrinsic motivation, reducing the likelihood of performance.28 In this context, weak financial incentives are preferable to high-stakes incentives.

“However, in public sector organizations the tasks are rarely routine or non-complex…” That is certainly what it looks like to the casual observer and even by the people who do the work. Yet, if an industrial engineer (or any person trained to observe work) were to observe the person doing the work for some period of time, they would find that the great majority of it is routine and mostly non-complex, and that like windshield replacement, it too engages many people and many processes.

“Unlike installing a windshield, the process [production of a college graduate] is neither automated nor under the direct and unambiguous control of a single person.” For each task that each person performs in the production of a college graduate, it is in fact under their direct control – though it may not appear that way to them. There is a process that they perform, whether or not they recognize it as such.

In a nutshell, Hillman analogy is flawed. Installing a replacement windshield and producing a college graduate are more similar than different. I realize that few people in higher education, whether faculty, staff, or administrators, want to think of it that way. But, if they did, they might take the initiative to aggressively improve academic and administrative processes as a means to forestall performance-based college funding – an action that is highly regarded by many politicians and business leaders, but which has a high probability of doing far more harm than good. And it will surely be grossly inferior to simple action of improving academic and administrative processes via kaizen. This would include low-stakes incentives that connect to strong intrinsic motivations and desires to better serve students and other stakeholders.

Smart Leaders, Dumb Decisions

In music, a standard is a tune or song of established popularity” among listeners. In business, a standard is a decision of established popularity among leaders. Namely, raising prices without improving value for buyers. It is a standard decision among leaders because it results in more money with no extra effort. But good things like that do not last long.

This week, there was an interesting article in Times Higher Education that speaks to smart leaders making dumb decisions, titled “More English students think degree was poor value for money. Since the UK higher education authorities instituted a £9000 tuition fee cap in 2012, “The proportion of English undergraduates telling a major survey that their degree was poor value for money has exceeded the proportion who felt it was good value for the first time.”

The increase in dissatisfaction is dramatic, nearly a doubling in just 4 years. Undergraduate students cited low faculty-student contact hours and delays in returning assignments as major dissatisfiers. Surely there are many more dissatisfiers than just those two, and tuition payers cannot be happy either.


Student enrollment by year. Painting by Munch.

This reminds me of the time when I taught a Rensselaer Polytechnic Institute (Hartford, Conn., campus), wherein the president, Shirley Ann Jackson, and the provost, Bud Peterson, doubled tuition per credit hour with no corresponding improvement in value proposition. The result was a 50 percent decline in enrollment. This, in turn, led to a voluntary exodus of faculty and non-renewal of faculty contracts. When I started at Rensselaer in 1999, there were 35 full- and part-time faculty in the management school. When I left voluntarily in 2005 there were 12. Enrollment stabilized until about 2010, and then continued its decline to zero. The management school closed this year.

Our satellite campus and main campus leadership was deaf, dumb, and blind when it came to student (and faculty and staff feedback). But we also failed in our responsibilities as educators. In many cases the teaching was lackluster, the teaching materials were aged or not relevant, course materials or topic overlapped, some faculty were condescending to students, response to student course evaluation were uneven, assignments were returned weeks later, there were course scheduling problems, and so on. In short, we – administration, faculty, and staff – mismanaged the face-to-face learning experience. So our students fled in search of better and lower-cost learning experiences, of which there were many good schools in the area to choose from. I’ll bet the same situation, more or less, exists in the U.K. today.

We faculty did not sit still and do nothing. Among the actions taken were to kaizen our premier executive master’s degree program in 2002-2003. This is described in my book Lean University and in my paper “Using kaizen to improve graduate business school degree programs.” While we were successful, it was too late. It did not help that top university administrators did not see merit in our wonderful kaizen results.

The Times Higher Education article says:

“…the survey also reveals a significant gap between many students’ expectations of how long it should take for their assignments to be marked and returned. While students’ expectations were met or exceeded in 54 per cent of cases, they were not in 46 per cent, and there were several disciplines – communications, business and education – where they were not met in the majority.

Forty-three per cent of students felt that it would be reasonable to receive their assignments back within a fortnight, but this happened in only 22 per cent of cases. A quarter of students said that it took up to four weeks to get their work back – a situation that only 12 per cent found acceptable.”

I return assignments to my students the day after they are submitted. I started doing that sixteen years ago. It was apparent then that students did not want to wait to get their assignments back, as circumstances had changed compared to the 1960s, 1970s, or 1980s. The long delay between assignment submission and feedback was long known to be major dissatisfier, but few faculty bothered to construct new, more focused assignments, that could be evaluated quickly and returned to students overnight (for more on that, see my book Lean Teaching).

Another article in Times Higher Education makes a call for change: “If you are not updating your lectures, you could be letting your students down.” Could be? No, you are for sure letting your students down.

Smart leaders can easily make dumb decisions that result in a lowering of the value proposition, which, in turn, causes students to recognize that they have options which they must carefully examine. As enrollments suffer, the only known course of action known by smart leaders is to make more dumb decisions: to lay off faculty and staff, which further lowers the value proposition for students and payers.

At some point, one has to seriously question (as I did in 2005) the standard for college and university leadership that we have come to accept. It is clearly not adequate for current or future times.

Evolution in Lean Teaching

elt_paperI’ve written a paper titled “Evolution in Lean Teaching,” which describes my recent work to expand and evolve the application of Lean principles and practices to teaching.

The focus is “grading inside the process” and creating a pull system for learning in a graduate course on Lean leadership.

Click on the image at right to view the paper (.pdf file).

I hope you will read it, share it with others, and also share your comments with me.

Thank you!

Lean Professor Top Blog Posts

Here are the top blog posts for the first half of 2016. Scan the list to see what you missed. Enjoy!

Lean Higher Ed Conference Presentation
Why Professors Can’t Teach
Personalizing Discovery and Learning
Higher Ed’s Big Lie: Academic Excellence
Lean MBA or Conventional MBA?
Lean Must Do No Harm
How To Get Started With Lean In Higher Ed
Kaizen for Higher Education
Bet On A Boiler
My Student Course Evaluations
Improving Critical Thinking
What Is Good Quality Teaching? – Survey Results
Teaching Surveys – Interim Results
The Value Of Higher Education
I Called It!
A Shameful Legacy
“All Deans Are A**holes”
Breathtaking Higher Education Innovation!
What is Lean Teaching?
Run Universities Like Businesses
Same Six Criticisms of Lean
Good Writer or Good Thinker?
Where Unqualified Means Qualified
Improving How Universities Improve
University Annual Budget Process

Breathtaking Higher Education Innovation!

Breathtaking Innovation Sure to be Used Throughout Public Higher Education!

tip_canAs you are no doubt well aware, I am internationally recognized for my many teaching innovations in higher education. Now, I can add one more teaching innovation to the already extensive list of “firsts” on my impressively long curriculum vitae.

I have invented the Professor’s Tip Can™. Yes, you too can earn more money by begging for tips from your students each time class meets. The more courses you teach, the more tips you earn! It’s the free market at work.

You can also leave the Professor’s Tip Can™ outside your office door during office hours to earn even more tips. And don’t be shy about bringing it with you when you meet your dean, provost, or president. You can even take it with you when you meet your Board or when you rally at the state capitol to protest budget cuts to higher education! The Professor’s Tip Can™ is incredibly versatile.

You might think this is an obvious invention, but you would be wrong. It is the result of 17 years of painstaking work to answer two critically important research questions: Are students customers? Is teaching a service? Look for the exciting results in my forthcoming paper to be published in the Journal of Irreproducible Results.

My research paper is timely given the emerging view among politicians, businessmen, university leaders, and others that teaching is merely a service provided to students. Teaching as a Service (Taas), itself an innovation, is destined to spin off many new innovations, with the Professor’s Tip Can™ leading the way. Its impact on graduation rates and other key metrics is not yet known, but it is expected to be favorable.

Using just one tip can (29 ounce cut green beans can works best), I am able to display three unique message depending on my mood or the mood of the class, and whether I am teaching undergraduate or graduate students. All I do is carefully rotate the can to the precise message at the start of class. It’s that simple!

I have field-tested the Professor’s Tip Can™ for three full academic years, and it works. It works so well that I have applied for several patents. Because my research was self-funded and I personally paid for the 452 tip can engineering designs and prototypes, the university has no claim on this (highly intellectual) intellectual property.

Yet because the mission of higher education is also to create new knowledge and freely share it with others, I am happy to share my latest innovation with you. I am giving away the Professor’s Tip Can™ graphics for you to use and even remix (can not included).

Be innovative! Choose any one or use all three!




















K-12 Teacher’s Tip Can™ is under development. Expect release date Spring 2017.

Professor’s Tip Can™ is a service mark of leanprofessor.com. Service mark applied for.

A belated April Fool’s Day joke.

Improving How Universities Improve

stick-slipUniversities have come under much criticism in recent years from business leaders, political leaders, and the public for being slow to change and improve. There is truth to this because the method used for change is what I call “stick-slip.”

Stick-slip is a term used in science and engineering that refers to a phenomenon in which two surfaces stick until a force large enough causes the objects to slip a small distance past one another.

University processes stick for a long time and then quickly slip a little. Because university processes stick for extended periods of time, it can appear as if no change is occurring. That’s because university committees typically meet on a monthly basis (stick) to carefully consider changes and also make changes (slip). Typically, committees meet only 8 or 9 times per year, and meetings stop on-time because faculty have to go and teach class. This limits the number and type of improvements that can be made. As I said in Lean University, committees should process smaller amounts of information more often, thereby increase the volume of work processed and improving flow (one of many useful improvement ideas in the book).

Based on my 15 years of industry experience and current involvement with industry, processes in industry can be stick-slip as well. But more often, the process for improvement is a slow, creeping along such that the changes made are exceedingly small. Creeping, as shown in the image above, is not “continuous improvement” because improvement proceeds so slowly as to be barely perceptible. The major changes that do occur typically relate to the use of new software, which is also stick-slip. Otherwise, change is difficult to detect.

In this sense, universities and industry are more alike than people realize in terms of the pace at changes are made. Yet, industry does one thing well that universities do not do well. That is, they are forced by shareholders or customers to respond to major shocks in the marketplace or major management blunders. Legendary are the many stories of companies that faced extinction if they did not begin to offer new products and services, or the re-vamping of corporations due to fraud or mismanagement. When forced to change in significant ways, corporations generally change (but they often backslide as well).

However, when universities are forced to change, they do not necessarily change. The major changes in the marketplace that have come to higher education over the last 20 years have yet to make much of an impact in how much of higher education functions. Time will tell if stick-slip helps universities survive or if they are a principal cause of their demise. But there is great risk in continuing along this path. An option better than wait-and-see is to begin to learn creeping. While this would be an improvement, it too carries risk

Few organizations continuously improve in ways that make meaningful differences day-to-day – called “stable sliding” in the above image. For that, you have to look at Toyota Motor Corporation, and, in particular, the unique way in which they practice kaizen. Kaizen is the core of their management system (click here, here, and here to learn more), and universities would be wise to adopt it and other elements that form the context in which it functions effectively. Stable sliding would be good for universities overall, though it would surely result in some problems. However, problems are more quickly recognized and corrected in stable sliding.

The challenge is that stable sliding must be led by the people who are in leadership positions, starting with the president of the university, along with the provost, deans, and administrative staff leaders. To do that, leaders need to learn new things, some of which can be learned by reading. Click here, here, here, and here for key books on kaizen (read all four). But, to really know it, leaders have to put what they learned from books into daily practice.

Personalizing Discovery and Learning

One of new things that I have started doing in my graduate courses is to challenge students to determine what answers they are seeking from the course, which in turns ask them to identify questions that they must ask. It is part of my evolution in Lean teaching, to make learning more a pull system instead of the usual push system. See my 2015 conference keynote presentation “Application of Lean to Teaching” (slides 24-29) where I presented my new approach to course design aimed at transforming face-to-face and hybrid teaching from “push” to “pull.

The assignment is called “Seek Answers by Asking Questions.” Its purpose is to personalize discovery and learning; to teach to individual interests, rather than teach to an assumed interest possessed by the group of students. Students submit this assignment in the third week of the semester, after they have had a chance to review the course materials and understand some of the basic concepts and problems related to the subject matter. It forces students, at the start of the course, to think about what they want to get out of the course. This is different than the usual approach in which the professor tells students what they are going to get out of the course.

Below are two good examples of what students submitted. It is clear by the quality of the submissions that these students did engage the material during the first three weeks in an effort to understand some of the basic concepts and problems related to the subject matter. Students who did not engage the course material submitted poor work, and their discovery and learning is therefore likely to be more limited.

Click on the images to view the files. Let me know what you think of this approach to engaging students in the subject matter and to personalize learning.

Example1 Example2



The Trouble With Tenure

The Wisconsin Policy Research Institute recently published a report titled: “The Trouble with Tenure” (February 2016). Click here to view the report. In the Executive Summary, page 5, the authors present an interesting and very challenging recommendation:

“…the Board of Regents… should also undertake a systemic review of whether tenure is appropriate and necessary on all campuses and at the Extension. As part of this review, the regents should direct individual campuses with varying missions to clearly articulate why each department benefits — or doesn’t — from having tenured or tenure-track employees rather than instructional staff operating on contracts. Similarly, each time a person is considered for tenure, chancellors should articulate why the department and university will benefit from having a tenured employee rather than a member of the instructional staff operating on a contract that assures academic freedom. Specific reference should be made to the mission of the individual campus university, and how the candidate is expected to contribute to the various facets of the mission.”

I applied this recommendation to my institution, and here is the result (click image to enlarge):tenure_challenge

Why is tenure a necessary aspect of higher education and of higher learning? Imagine if a faculty member at a university were to undertake a carefully constructed research project whose data indicated that the above recommendation was the result of various biases, and that, as a result, the report and its recommendations were unreliable for use in executive decision-making. And, what if the authors of the report making said recommendation judged the research to be a personal attack and which damaged their credibility, rather than a dispassionate research project in search of the simple truth? They could complain to the university president and demand that the professor be fired.

In the absence of tenure, the professor could be dismissed as a result of their research. The practical consequence is that the simple truth behind the important question of how professors could be made accountable to taxpayers and students would be undiscovered, and would instead remain within the realm of subjective opinion informed by potentially faulty political (or other) ideology.

Well-designed research might instead reveal uncomfortable truths regarding administrative labor costs, the cost of NCAA athletic programs, and other costly dissipations that do not contribute to the university’s mission, and which therefore indicate that the principal accountability to taxpayers and students lies elsewhere.

Tenure, therefore, might be much less trouble than is imagined. It might also reveal that perceived need for universities to become more flexible, nimble and responsive is not actually necessary.