Higher Education’s Ultimate Failure

Who would have ever thought that tenure’s undoing in public higher education would be caused by higher education’s failure to achieve one of its most fundamental objectives: Teach people how to think critically.

There is a growing push to eliminate tenure for faculty in public higher education. Every argument that I have seen to support this change is illogical. The poor thinking reflected by tenure-eliminating advocates illustrates one important way in which higher education (and all education that preceded it) failed in its effort to teach critical thinking to its students, and, especially, how to avoid illogical arguments, inconsistent thinking, and unsound reasoning.

It seems that a general education philosophy course in logical thinking, co-taught with business political science, business, and engineering professors to emphasize its practicality, might have instead produced graduates who would not proffer or so easily fall prey to faulty arguments. Given its obvious importance and practicality in business, politics, and elsewhere, such courses should come at the very beginning and again at the very end of all degree programs.

The articles “Killing Tenure” and “Missouri Lawmaker Who Wants to Eliminate Tenure Says It’s ‘Un-American’” capture some of the illogical arguments used in the effort to eliminate tenure in public higher education.

As everyone should know, tenure is a job protection that exists to allow faculty to pursue lines of research that could be unpopular and lead to retribution. The fact that tenure has expanded into “astronomical freedom to do whatever they [faculty] wish” is primarily due to poor administration by generations of university presidents, provosts, and deans. Tenure is a job protection similar to the tools and safety equipment afforded to workers in hazardous industrial work environments; the protective equipment afforded to firefighters and law enforcement; the personal protective gear afforded to people who deliver healthcare; and redistricting to assure re-election and astronomical freedom to say whatever one wishes.

Generally, Kettle Logic informs the overall argument against tenure. Specific examples of illogical arguments shown below are taken from the article “Missouri Lawmaker Who Wants to Eliminate Tenure Says It’s ‘Un-American’,” and reflects the typical thought process and arguments among those who seek to eliminate tenure in public higher education.

Tenure is Un-American.
Type of illogical argument: Red Herring, False Equivalence
Comment: Sigh.

Tenure “protection” exists in no industry other than higher education.
Type of illogical argument: Special Pleading
Comment: Other forms employment have similar employment protection for the purpose of ensuring freedom from public or political pressure. For example, federal judges, to assure judicial independence. The unique nature of certain jobs require unique protections.

Degrees must correspond to jobs.
Type of illogical argument: False Equivalence
Comment: Job markets fluctuate and industry is fickle. The mission of higher education is not to chase to the ever-changing job market. Higher education could resolve this concern and increase transparency with a simple disclaimer: “Higher education is not mandated by society. As an optional educational experience, higher education serves the varied interests of students in relation to society’s ever-changing wants and needs. As such, academic programs and earned degrees may or may not lead to part- or full-time employment.” Such a statement would obviously remain true even if all degree programs corresponded precisely to jobs.

High cost of higher education is due to tenure.
Type of illogical argument: False Assumption
Comment: High costs (tuition and fees) are due primarily to bad processes throughout higher education, both in administrative and academic work. Today, less than half of full-time faculty members have tenure, and faculty wages, inflation adjusted, have been flat for more than 30 years.

Tenure allows professors to teach classes “that really aren’t.”
Type of illogical argument: Red Herring
Comment: Where this problem exists, the simple solution would be to improve the university-wide curriculum development and approval process.

Tenure allows professors to teach classes are disconnected from the real world.
Type of illogical argument: Faulty Generalization, Avoiding the Force of Reason.
Comment: Where this problem exists, the simple solution would be to improve the university-wide curriculum development and approval process. Another solution would be to improve the faculty hiring process so as not to discriminate against candidates with industry experience. Accreditation bodies would need to make accommodations for teaching faculty with wider ranges of experiences and degrees, and administrators (hiring officers) must not interpret such requirements in ways that narrow the range of teaching faculty experience, thereby excluding qualified candidates.

If you’re doing your job, then you don’t need tenure.
Type of illogical argument: Affirming the Consequent, Inductive Fallacy
Comment: Tenure is part of what enables faculty to do important elements of they job that they are specifically hired to do; e.g. research.

Professor’s job is to ensure students are successful in their job.
Type of illogical argument: Post Hoc Ergo Propter Hoc (faulty cause-effect)
Comment: Professors cannot control student outcomes post-graduation (Example: proffering illogical arguments that will harm people and society). Former student’s success in the workplace is controlled by their own performance, their immediate supervisor, other people, and other factors.

Students obtain degrees with no real-world applicability.
Type of illogical argument: Expediency
Comment: That’s a choice that students make. Is it wise? Maybe yes, maybe no. Those degree choices exist primarily because there is continuing marketplace demand.

Taxpayer and student dollars pay for faculty doing thing outside of their job description.
Type of illogical argument: Shifting the Burden of Proof
Comment: Likely true in some cases, not true in most cases. Corrective action, if needed, is the responsibility of college and university administration, not state legislators.

“Where else in any other industry do you have” such highly educated people making such low pay? If tenure is eliminated in public higher education, then the pay of all full-time faculty must be raised to 50 to 100 percent to be on par with industry salaries. This is the same logic upon which eliminating tenure is built. The two go together precisely.

Final Exams, Final Mistake

A recent op-ed article in my university’s student-run newspaper, written by a soon-to-be graduating senior, questioned the wisdom of cumulative final exams (click here to read the article).  It’s great to see a student putting their critical thinking skills to use. Professors should do the same. The student, Lauren Lustgarten, said:

“Instead [of final exams], professors should make students take part in creative projects or presentations. Something that actually shows ones creativity and that can actually successfully measure ones knowledge on the subject. At least projects and presentations get you ready for the real world post graduation. Cumulative final exams filled with details we learned months prior will not help us in life down the road.”

I share that sentiment. Needless to say, I have never given final exams (nor mid-term exams) in any of my courses in the 17 years that I have been teaching in higher education. Final exams is a useless tradition that should be questioned by all (same goes for mid-term exams).

In my view, cumulative final exams are a futile effort by professors to force all the information contained in the course onto students. Professors push onto students a big batch of information, the entirety of which they think is important. But, what information do students think is important? Why not instead allow students to pull from the course the information that they think is most important to them, and for their success post-graduation? And why not allow them to do this in a way that exercises their creativity and also the human desire to make things?

chhen1Readers of this blog and those who have read my book Lean Teaching know that in all my courses I give an assignment to students to create a one-page visual control whose purpose is to help them apply what they learned in the course in relation to their own needs and interests. It requires students to undertake a comprehensive review of all course materials, just as a final exam does, but it replaces the stress and pressure of a final exam with a fun, interesting, and memorable challenge.

The image above shows a wonderful, creative example of a one-page visual control made by a student, Zack Chhen, and submitted a few days ago. Click here to see other recent examples of the visual controls created by my students.

The one-page visual control that each student creates helps them personalize their discovery and learning process, and transform it into something useful for years into the future. After all, the only way to really know the material learned in a course is to use the material learned in a course. Absent this, students finish courses with no practical or useful distillation of the learning from their perspective. A graded cumulative final exam (document) is of no use to students after they graduate, but a one-page visual control is of use – potentially of great use.

This semester I asked my students to create another type of visual control, in addition to the one-page visual control. I asked them to:

“Make a small physical object (desktop sized) that reminds you of one or more key learnings from this course that you intend to apply on-the-job. Material of construction can be anything you like (wood, aluminum foil, paper, paper mâché, styrofoam, etc.). Bring it to class and explain it at the final class meeting.”

andre1I wanted my students to deepen their understanding of what they had learned in the course by engaging in a new process: Transforming the knowledge in their head into an object that they make using their hands. And then bring the object to the last class of the semester and explain to everyone what they created.

Complimentary to the one-page visual control (cumulative review), this assignment requires them to focus on one or a few key elements of what they learned that is personally important to them.

The image at right is a wonderful example of a student’s creative response to the challenge in my Lean leadership course. Using found material, wire, Victor Andre made a “BBC Pyramid.” The letters at the base, “RP,” stand for “Respect for People,” The letters at the top, “CI,” stand for “Continuous Improvement.” And the letters “BBC,” one on on each side of the pyramid, stand for “Beliefs,” Behaviors,” and Competencies.” What it means is Respect for People is the foundation upon which specific leadership Beliefs, Behaviors, and Competencies are necessary in order to realize “Continuous Improvement.”

castaneda1The image at right is another wonderful example of a student’s creative response to the challenge in my supply chain strategy course. Monica Castaneda created a diorama-type story about how to improve supply chain management. Her explanation revealed a depth of thinking and understanding that gave me confidence that she learned a great deal from the course.

By explaining to the class what they created, students engage in a kind of brief and informal oral exam that allows me to further evaluate the student’s knowledge and understand of how the course that I created impacted them and what they found to be useful. This is useful feedback that I use to help me improve the course.

I plan to refine the two visual controls assignments in my courses to have greater impact and effectiveness – not just for my courses, but for the benefit of students both at the conclusion of the course and long after they have graduated.

Final exams throw away professors’ opportunity to finish the course in a way that has a positive and memorable impact on students. I hope this blog post inspires you to follow in my footsteps and experiment with what I call “4a” (for the one-page visual control) and “4b” (for the physical object) visual controls. But please, don’t copy my 4b instructions, above, as they are being extensively revised for my courses next semester. Instead, do that Lean thing: think for yourself!

Improvement in Higher Education, Circa 1912

One of my great interests is reading books from the early 1900s that describe the troubles in higher education and the means by which people thought to eliminate problems and improve processes. The period 1910-1915 saw a lot of interest in applying the then-new Scientific Management to process problems in teaching and administration in higher education.

The first thing to realize is that Frederick Winslow Taylor and his colleagues who created Scientific management are not the evil-minded people you may have been led to believe (for example, see “The Spirit and Social Significance of Scientific Management,” 1913). They, as others who were interested in Scientific Management, were intelligent, deeply thoughtful people, with good intentions, dedicated to improving American higher education for the benefit of students and to make professors’ job easier. Bias against Taylor or Scientific management will limit your ability to comprehend the work of those who sought ways to apply in an effort to improve higher education in the early 1900s – for the benefit of both students and faculty.

symposiumThe book, A Symposium on Scientific Management and Efficiency in College Administration, is an interesting look back at how academics and non-academics described the problems in higher ed teaching and administration and reasoned how progressive Scientific Management, the forerunner, to Lean management, could help. Remarkably, the problems then are mostly the same as now.

The focus of the book is engineering education, though you will find much useful information for any academic discipline. The latter chapters focus on the plight of the professor and their many burdens, and how to relive the faculty of burdens so that they can focus on doing what they are paid to do.

Read the chapters by Frederick A. Parkhurst, Henry L. Gantt, and H.K. Hathaway to better understand Scientific Management. But if your time and level of interest are limited, skip to the chapters by W.A. Hillebrand, Hugo Diemer, William Kent, H. Wade Hibbard, George Shepard (very good chapter), S. Edgar Whitaker (another very good chapter) to understand the problems in higher education and how Scientific Management was seen as a good and practical solution.

And here are a few notable quotes:

“We therefore find that initiative alternates with routine as part of the law of progress.” – Harrington Emerson, p. 6

“I was trained looking backwards into the past. I was not trained for what was ahead of me.” – Harrington Emerson, p. 9

“In many cases the greatest objection comes from those who are eventually to be benefited by this change of condition [to scientific management].” – Frederick A. Parkhurst, p. 26

“…he knew nothing… and never would know, for his bump of conceit was too great to permit of his learning.” – William Kent, p. 146

“The motto of the conservative is ‘whatever is, is right,’ that of the scientific [management] expert is ‘whatever is, is apt to be wrong; I am going to test it and find out whether it is right or wrong.” – William Kent, p. 157

“…why is the standard period for a recitation or lecture one hour? I have been unable to find any better reason for it than that the hour is a clock unit.” – George H. Shepard, p. 198

“People are always glad to be relieved of trouble.” S. Edgar Whitaker, p.  213

Evidencing Improvement

In my view, the United Kingdom has led the world in the advancement of Lean management in higher education (click here to learn more) – but with two important qualifications:

  • Application has been mainly in administrative processes, not in teaching and other academic processes.
  • An emphasis on measuring the results of improvement “projects.”

I’d like to focus here on the second point, measuring the results of improvement, what is called “evidencing improvement.”


Click on image to view report.

The article, “The Importance of Evidencing Improvement” (Efficiency Exchange web site, 17 November 2016) makes the case that creating formal reports that provide evidence of results is necessary to drive continuous improvement forward. In addition, such reports are necessary to satisfy the new “Value for Money” reporting requirement from the U.K. Higher Education Funding Council. Note that it contains an onerous 13 pages of guidelines for reporting “Value for the Money,” while the report on “Value for the Money” reporting is 83 pages. My brief research into the matter reveals that evidencing improvement reports seems to spawn ever-more reports – including reports on reports – and hence ever-more cost to the public in the name of reducing costs to the public.

The publication shown in the image at right is a (no doubt helpful) guide for evidencing improvement intended for use by other institutions of higher education in the U.K. This 50-page guide from the good people of the University of Strathclyde is a well-intentioned effort to help others who must toil under such self-imposed and government-imposed regulatory requirements, with the hope that it helps drive business process improvement (BPI) forward while yielding sought-after benefits to society.

As you likely imagine, I strongly oppose such reporting of improvement results. Why? Broadly, because they slow down and limit the magnitude and scope of improvement. Let’s have a look at the detailed reasons:

  1. Requiring formal reports on improvement results is an excellent example of the application of traditional thinking to non-traditional (progressive) process improvement work. It is a fundamental misunderstanding of the mindset behind Toyota-style improvement (i.e. Lean). This often happens in organizations where they seek to apply what they know from experience to that which they do not know. Rather than abandoning current knowledge in order to gain new knowledge, they apply current knowledge (reports, “projects”) in the quest for new knowledge, thereby greatly limiting the new knowledge that can be obtained – and also limiting the results that are desired.
  2. It reflects improvement within the framework of existing boundaries that define the status quo. Therefore, few or no breakthroughs are possible. These boundaries are what Lean seeks to break free of.
  3. Written reports nourish the bureaucracy and help it thrive, which Lean teams should never do. Lean teams should not conform to the bureaucracy. Instead, the bureaucracy should learn from Lean teams to reduce and simplify stultifying bureaucratic work.
  4. It takes significant resources – people, time, money – to write internal reports and reports to government agencies. These resources are diverted from actually improving processes, which is where they are needed most.
  5. Requirement for evidencing will influence the type of improvements people pursue, and certainly narrow the focus to what is organizationally acceptable and that which can be easily defended when presented to institutional and government leaders.
  6. Requirement for evidencing will reduce the number of improvements, as more improvement “projects” naturally results in more reporting.
  7. Requirement for evidencing will limit the speed of improvement. People will work on fewer large projects than on many small ones. Many small improvements should be the focus, rather than a few large improvements. The savings in resources from small improvements will almost certainly be small, so the motivation for doing them will be small as well, given that reports are usually written with an eye towards impressing other people.
  8. Requirement for evidencing will limit and likely reduce learning. The former chief financial officer of The Wiremold Company says: “Don’t bean count Lean.” He says this because many resources and outcomes are not easily measured and it limits people’s thinking of what improvement is or what it can be.
  9. Evidencing leads to prioritization. What is the basis for prioritization? Saving money, saving time, saving people, student learning, student satisfaction, pleasing the boss, etc.? Prioritization often leads people to focus on what can be done, not on higher aspirations of what should be done.
  10. The need for evidencing improvement is closely associated with the commonly accepted view that “what gets measured gets managed” – which is a false promise. Don’t accept that; question your assumptions!
  11. The skills that people develop are relate to report-writing and therefore not towards continuous improvement. In this, and other ways, such formal reporting requirements disrespect people – where “people” are the various stakeholders of higher education.
  12. There is a natural tendency to write long reports because the bigger the report, the more improvement that has been achieved. Isn’t that right? No, that’s wrong.
  13. Quantifying benefits also has a long history of being demanded by leaders, yet is also unconvincing as justification for continued investment or as a rationale for others to embark on on process improvement. People in leadership positions often do not believe what they read in reports.
  14. More labor hours and money will likely go into writing reports than into actual improvement work, thus assuring that the destiny of U.K. higher education is likely to be unchanged. It will end up where politicians want it to end up.

I am certain that I have missed some other important reasons. Can you think of any?

If you have time to write reports, you are improving too slowly. You should be improving at a rate faster than it can be evidenced in a formal report, thus rendering such reports irrelevant.

The focus of improvement in Lean is the elimination of waste, unevenness, and unreasonableness. Evidence of that should always be visual – either the genba itself or a few one-page charts at the genba. Never written reports.

At a recent Kaizen Conference, someone asked:

“We have been doing kaizen since 2009. What is the method to evaluate our kaizen achievements?”

The answer from sensei Chihiro Nakao was:

“Go to the genba to see how you have changed it.”

In order for improvement to be assessed this way, institution leaders, government leaders, auditors, and other stakeholders, must learn how to see that improvements have been made through training. Needless to say, that training should be gained through their personal participation in process improvement activities – hopefully, kaizen.

New Mindset for Higher Ed Leaders

Higher education has been steadily moving from it’s long-term position as a sellers’ market to a buyers’ market. College and university leaders seem slow to grasp this fact. They, as well as those who do grasp this fact, would be wise to adopt this mindset given current market conditions and to lead daily process improvement, courtesy of Mr. Toshihiro Nagamatsu:

“We are always at our worst. You may think you are a good company today, but make no mistake you are not. You may become better tomorrow, but still you are toward the back. At any moment, somewhere in this world there is someone doing the same work better.  There is no end. You must continually seek to improve.”

What does Nagamatsu-san mean? At any point in time, your institution and your work are in bad shape, and you must acknowledge this because others are competing against you and will take your business if you do not recognize problems and make improvements every day.

Buyers’ markets pose unique challenges to higher education leaders. In particular, the methods for improvement and the rate of improvement necessary to avoid an institution’s demise.

Why Universities Don’t Improve

It’s not that universities don’t improve, it’s just that they improve far too slowly and therefore are not in step with the times. What causes that? There are many factors, of course, but let’s consider the role of accreditation on causing slow improvement in academic programs and administrative support.

The various accrediting bodies publish standards. These standards are largely unchanged for many years. When they do change, it is often in decade-plus intervals. The fact the standards do not change more frequently suggests to their clients, universities, that they do not have to change often. Yet, the world, employers, students, technology, etc., change every day. Accreditation standards, therefore, create a clear and present risk to the higher education industry – especially public higher education.

You do not control your destiny if you rely on others to create standards for you.

Contrast that with Lean organizations, where people who own processes set standards for processes, and then they revise the standard whenever anyone has an idea for improving the process. If an organization is led by a capable Lean leader, then people will have many ideas every day, and standards will be revised frequently (daily, weekly) to reflect that.

I have always been of a mindset that colleges and universities, and the individual schools within them, are on the wrong path when they subscribe to the standards of regional, national, and international accrediting bodies. The accrediting bodies offer far more in the way of reasons to maintain the status quo than reasons for rapid improvement and innovation. Their standards stifle creative thinking and innovation. Accrediting bodies are, themselves, a power disincentive for people to consider breakthrough change (called “kaikaku” in Japanese) in response to changing conditions.

Were I president of a university, I would forgo accreditation. It consumes a massive amount of time, effort, and money to do nothing more than maintain the status quo. Instead, we would practice kaizen and create our own standards for each process – together with staff, faculty, administrators, students, alumni, and employers – and improve them every day.

What would the result be? Better courses, better academic programs, better quality teaching, better administrative processes, lower tuition and fees, and so on. Students would be more satisfied and so would other stakeholders. And it might even result in happy faculty!

Do University Leaders Care About Teaching?

lean_hebooksSince my books Lean Teaching and Lean University were published in June 2015, Lean University has sold at 2.5 times the pace of Lean Teaching. What might these sales results suggest?

Sales of Lean University over Lean Teaching indicate that university leaders are more interested in Lean for administrative work than they are for academic work. It suggests a view that leaders prefer to focus on what is within their control (administrative processes) and ignore that which is outside of their control (academic processes). This is in spite of the fact that teaching (and learning) are the the core value proposition in higher education.

It might also suggest that administrators care more about improvement than professors. Or, that administrators think that improving teaching is not possible, or that individual faculty are responsible for teaching and improving teaching, not administrators.

Below is a recent e-mail exchange between me and a university president (slightly edited for clarity). It reveals an interesting divergence of views, and further confirms the general sense that university leaders seem to have little interest in improving teaching.

From: President
To: Bob Emiliani
Subject: Lean Teaching: A Guide to Becoming a Better Teacher

Thanks for sharing a copy of Lean Teaching: A Guide to Becoming a Better Teacher. I remembered part of it because I think you shared this book with me once in the past but, perhaps, I am confusing it with another book that you sent [Emiliani note: The book sent previously was Lean University]. I enjoyed reading it, and found a number of interesting and well-taken points.

Translating information from your background in Lean Manufacturing to the teaching and learning process is an interesting “overlay.” I think there is some real possibility here if you are ever interested in publishing with a major publishing house on this topic. In order to be able to do that, I think you would need to access a major amount of research literature on effective teaching and learning. Most of it emphasizes determining which practices have the greatest impact on the dependent measure being some form of assessment of learning outcomes. While your logical interpretations do fit a fair amount of that research, for example, there’s quite a bit of research on distributed learning and briefer content segments of teaching, guided practice, independent practice, and assessment and those effects on content learned, I’m not certain how well all of the tenets of Lean Manufacturing square with the actual research based on student learning outcomes.

In any event, it was interesting reading, and I thank you for sharing it.

Again, thanks for sharing.

RE: Lean Teaching: A Guide to Becoming a Better Teacher
From: Bob Emiliani
To: President

I’m surprised that the significance of the 45 teaching errors (pp. 31-32) was not immediately apparent to you, considering they came from a survey of students like yours and given your focus on student success. Surely each one of the teaching errors compromise student success. (Your focus on the prestige of the publishing house was another interesting surprise. Appearance more important than substance… really?).

In my 30+ years of industry and academic work experience, I have found that leaders often have great difficulty acknowledging the reality that the quality of the product or service the organization produces is average (inability to recognize problems that do not fit ones worldview). Is that the case here?

Eliminating the teaching errors (which are ubiquitous, by the way) will do more to help assure student success than taking attendance and using the early warning system – which are two good things to do as well. Eliminating one’s own teaching errors show that you REALLY care about students. Wouldn’t you agree?

Nearly every leader of a higher education institution would rather compete on the basis of campus attractiveness than the quality of teaching. It seems to me that leaders, such as yourself should emphasize to faculty the need to improve teaching as the primary means for improving student success. Eliminating the 45 teaching errors is a powerful first step. The Lean Teaching pedagogy is a practical method to further achieve that objective. Other methods may be helpful as well.


Bob Emiliani

RE: Lean Teaching: A Guide to Becoming a Better Teacher
From: President
To: Bob Emiliani

Thanks for your thoughts.

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.