On this episode of Dear Strategy, we talk about the true value proposition of college. Given the outrageous prices, coupled with the fact that many people never get jobs in the actual fields that they study, it’s hard to see how there is any real value proposition here at all. And, yet, people keep paying. So what’s really going on here? We’ll talk it all through, from a strategic standpoint of course!
As we close out an interesting year, I want to use this opportunity to reflect on some of the things the COVID-19 pandemic showed us that might actually change the way we live and work for the better. To name just a few:
- We’ve learned how to make a living without having to waste several hours a day commuting.
- We’ve become more comfortable revealing our home lives to one other and embracing who we really are rather than who we think our companies want us to be.
- We’ve forced several industries (airlines, public transportation, theaters, restaurants, bars – just to name a few) to rethink any strategy that involves packing humans together into inhumanely tight spaces.
- We’ve realized that we can probably survive on a little less toilet paper and paper towels!
But perhaps one of the most eye-opening revelations to come out of this pandemic, at least for me, was gaining a better understanding about the true state of our country’s higher-education system.
Like most of the other problems that this pandemic has helped us to reveal, this is one that has been lingering for some time now. The cost of a college education continues to rise at exorbitant rates. Yet, the quality of the education that our children have been receiving appears to be diminishing. Why do I say that? Well, sitting on the hiring side of the table for at least the past 20 years, I have been increasingly astounded at just how ill-prepared our college graduates have been for the jobs that they have been aspiring to. Basic grammatical and spelling skills are lacking, real-life financial and accounting skills are all but absent, and any correlation between academic learning and on-the-job skills is virtually non-existent. Yes, this is one person’s opinion. But it is an opinion that seems to be shared among many of my colleagues, and even among many of the graduates that I ultimately ended up hiring. Something is wrong. And, unfortunately, it doesn’t end there…
The concept of a value proposition is well understood in the world of strategic planning. In short, your product brings some value to your customers and, in turn, those customers compensate you in alignment with the value that they feel is being received. When this formula goes out of whack, the market generally corrects itself. And if you find yourself in a situation where that formula hasn’t corrected itself, you can be fairly certain that some sort of disruption is right around the corner. That’s the situation I think we’re in with our higher-education system.
“The concept of a value proposition is well understood. In short, your product brings some value to your customers and, in turn, those customers compensate you in alignment with the value that they feel is being received. “
Of course, we can spend days trying to analyze why the current system may not adequately be preparing our children for the real world. Maybe it’s because many colleges continue to cling to outdated learning methodologies that simply don’t translate to today’s modern workplace. Or maybe it’s because the idea of college has become more closely aligned with being a social playground than an educational necessity. There are probably many reasons. However, focusing on them isn’t really the point because, in a normal world, any of those problems would simply force the prices of college to go down. And then the market would either pay less for the service, or the industry would be forced to deliver a better product for the money.
But something is preventing that natural course of action from taking place. And I believe it has everything to do with both companies and parents not holding colleges accountable for the output that they are supposed to be producing.
Let’s face it, what we’re really paying for with college isn’t the education, it’s the fact that most companies require college degrees for their highest-paying jobs. Of course we want our children to learn. But, more than that, we want our children to be able to live on their own after they leave our houses. And the most obvious way they can do that is if they land high-paying jobs. That’s the true value proposition of college. And it is one that, at least at the moment, is really, really flawed.
The first reason it’s flawed is because, in most cases, the cost of college is so high that it results in years and years of debt that even the highest paying jobs can’t satisfy. In other words, when the cost of independence is so high that it makes people more dependent, it kind of defeats the point.
The second reason it’s flawed is because the companies that are requiring the degrees are doing so because the degrees are supposed to represent some level of knowledge and preparation that would otherwise be quite costly for those companies to provide themselves. But when the degrees aren’t providing that benefit, then the companies aren’t getting what they bargained for. And that’s a “lose-lose” all around.
So parents aren’t getting what they paid for; companies aren’t getting what they paid for, and students aren’t getting what they paid for. See why this is an industry that’s ripe for disruption?
As I said before, this is a problem that, in my opinion, has existed for some time now. But I think COVID has just forced us to see it all more clearly. Our kids are learning from home, and we’re starting to see what they’re actually learning (and what they’re not learning as well). We’re also realizing that not paying for room and board is probably allowing our children to learn a lot more, and to be a whole lot safer while doing it. Finally, we’re learning that, in a much more crowded job market, real-world skills are going to win out over hyped-up degrees. Companies need knowledge, kids need jobs, and we all need less debt.
So, besides being a bit of a rant (admittedly so), what in the world does any of this have to do with strategy? Well, I think this is a perfect example of an industry that needs to disrupt itself before somebody else disrupts it first. All of the stars are aligned for something really big to change here. Google has already announced that, for certain positions, they will start accepting their own 6-month certificate programs in lieu of college degrees[1]. And it’s almost certain that others will follow suit. Which means that colleges need to get on the bandwagon NOW. Most colleges teach the subject of strategic planning. Now it’s time for them to start utilizing their own tools to see how well they work.
In closing, let me just say that I provide education for a living. I personally feel that there is nothing more valuable to a society than education. But, just like with any strategy, our higher-education strategy needs to evolve to meet students, parents, and companies where they are now – not where they were 50 years ago. I’m rooting for the colleges to succeed. I truly am. But, to do so, they’re going to have to take a different approach. And if that approach is successful, I believe they can write a case study for the ages; and one that will be taught, in whatever form, for many, many years to come.
[1] Bariso Justin, “Google Has a Plan to Disrupt the College Degree,” Inc., August 19, 2020, Accessed December 20, 2020, https://www.inc.com/justin-bariso/google-plan-disrupt-college-degree-university-higher-education-certificate-project-management-data-analyst.html
Listen to the podcast episode
Dear Strategy: Episode 127
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Bob Caporale is the founder of Strategy Generation Company, the author of Creative Strategy Generation and the host of the Dear Strategy podcast. You can learn more about his work by visiting bobcaporale.com.
