Monday, February 02, 2015

What Universities Can Learn from Apple?

From this title, a lot of people will get there-we-go-again feeling. But I am not writing about the brilliance of Steve Jobs, his ability to put himself in the shoes of the consumer, or his commitment to beautiful design or usability. These things have been talked about before, and still gets talked about, as Apple continues to perform astonishingly well. This post is about just one rather mundane aspect of business strategy, where Apple outguns everyone else, and something the universities are really bad at, habitually. And, the point of this post is that perhaps time has come for the universities to look closely at Apple, because this one key strategic point is becoming ever more important.

In his recent article in International New York Times about how Apple overtook Microsoft (See the article here), James Stewart emphasises the courage Apple has shown in cannibalising itself. They were unafraid to undermine their most successful products. Apple destroyed its own very successful iPod business with phones that can play music, in an astonishing feat of competing with itself. Most companies do not dare to touch a profitable product line that works. Microsoft is a great example of this, as they stuck to Windows so closely that they let the entire mobile computing phenomena to bypass them. 

This is indeed in line with the classic disruptive innovation thesis - that incumbents lose out not by being dumb, but by being smart and following the business wisdom of not tampering with success (which, I am reminded, is the motto of many a manager). Apple succeeded as a company not just by setting new standards in different industries, but by opening up Adjacent Possibilities of their many ideas and having the courage to disrupt themselves continuously.

What does this have to do with the universities? In my many conversations with universities, I have come to identify what I call a Finite Student fallacy. Even if you take a good idea to an university, which they may themselves acknowledge as a good idea, they would very frequently come up with this objection that doing it may hamper their other businesses. In fact, this mindset is so entrenched that I have seen university partnership applications designed to ask this precise question - how would this new partnership affect the existing recruitment of the university - and every new idea is continuously blocked because doing this may take away students from the university. In effect, universities are always making an assumption that there is only a limited number of students in the world who may decide to go for the new offering rather than its traditional offering, and they would lose students therefore.

The fallacy is clear to see, when most students in the world do not go to the university and indeed, the best universities in the world are some very small ones. The number of students is hardly finite, given that millions are outside the system and disruptive innovation is needed to bring the non-users into Higher Education. The universities themselves talk about widening participation, and yet they are afraid, in fact, paralysed by the fears of cannibalisation, to do anything new.

One explanation for this behaviour is Real Estate, in the literal rather than the metaphorical sense. Many universities have really become real estate companies (and the opposite is indeed true in some countries), with millions of dollars invested in infrastructure. Just as Microsoft was concerned about Windows, the universities are often concerned about finding usage of their land and buildings above anything else. The fact that there are too many students outside the system and the demand is shifting from place and time-bound undergraduate degree is utterly inconceivable to the institutions, which remain utterly wedded to land and buildings.

This, in summary, the Microsoft syndrome of the Universities. This means that even when they embark on a new initiative, a new partnership or an online venture, it is seen as outside the organisational priorities, and remain without broader organisational support. These new initiatives, therefore, often fail - setting off the self-fulfilling prophecies about the unchanging nature of Higher Education from among the University leaders. But this is ceding space to the disrupters - that was the point of Apple trying to disrupt itself all the time - and we may be reaching a tipping point when the universities ultimately get overwhelmed. 



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