Business Model of Higher Education: The Differentiated and Integrated Strategy

Strategy Design, Business Modeling

The landscape of higher education is rapidly changing. One thing that is becoming vital to competitive positioning is the ability to build partnerships and collaborations with businesses, nonprofits, government agencies, military, K-12 schools, and foreign entities for the purpose of designing an integrated education model. 

The business model of higher education is shifting and to remain relevant in the future will require, redefining the value proposition of todays education model and the leadership to challenge archaic thinking. The model of the future will be centered on two core elements: 

The ability to differentiate based on an area(s) of specialty or niche programming

The ability to integrate niche programming by restructuring internal operations (academics, careers, and development offices) and building strategic relationships with external partners and employers.

Differentiation

Colleges and Universities will differentiate on their brand or their program niche in the market. Harvard University has a premier brand name, but will that be enough in the future? Is the value proposition of higher education shifting to career readiness and ability to secure employment? If that is the case, then is it more valuable to enroll in a university that has a world-class reputation for an industry specific focus or program. 

For example, can a small university in Vermont compete with Harvard on brand? No! But can they differentiate themselves in a way that allows them to have the #1 cyber security program in the country? Yes! This is an example of how schools that do not have a marquee name must compete to survive and grow.

Determining how and where to compete in this global education market is going to mean the difference between being relevant in 10 years or going extinct. Small to mid-size colleges and universities can not compete with the Harvard, Yale, and Stanford brands. However, given the shift in the markets, the future will base the value of education on career readiness or job preparation within a niche area, which allows room to compete based on niche market focus.

Integration

What is the strategic relevance of your careers department? Where is it positioned in your strategic plan in terms of importance and budget allocation? We want colleges and universities to become too integrated to fail. Integration means entrenching your school with employers and external partners around your niche programming to build a model that adds value in multiple areas.

If the value proposition is moving away from a degree and more towards career readiness, that will impact the way universities are organized and structured. Careers departments become strategic partnership departments bringing jobs, internships, externships, curriculum changes, corporate training, and multiple levels of relationships. The challenge will be to bridge all external relationships to internal departments. Even the development office will benefit, as a school becomes more of an integrated partner with outside organizations, the level of corporate giving and philanthropy should increase in parallel with the value of the programming and relationship.

The business model of higher education is ready to transform and will require strong leadership to drive those changes. Strategic planning is a great way to move a university towards the future, but part of that process must be designing strategy for differentiation and integration.