Interrogating For-Profit Higher Education

I have been studying Higher Education, especially For Profit Higher Education, for several years. In a way, I have an unique position to be an outsider as well as an insider in this: I own and run a private Higher Ed business and work with several others, while in my free time, I do my research and blogging on the subject. I shall claim that I am somewhat neutral on this very political issue - I see private enterprise as a force for good and public higher education, as it stands today, well in the need of a disruption, but also acknowledge that private owners and shareholders of Higher Ed companies haven't figured this out yet. Having worked with several For Profit Higher Ed companies, I have realised the logic of money has to sharpen itself if it has to create a winning Higher Education brand. In fact, my work keeps circling around this central question: How to create something really good with private capital?

I claim that I have glimpsed this prospect in my years in NIIT, where, at least initially, we, I, believed in what we did. I was not just an employee, but also one of its early students: I enjoyed my time in NIIT, learnt new skills and successfully turned it into a profession, before I came to work for them. One could argue that this was 'mere training', which private sector does well. However, I think that there was nothing wrong with my 'education' in NIIT: It was a highly structured curricula with clear milestones and ample practice, but it also created a general enthusiasm for all things computing for me, connecting up with other people and ideas, allowing an engaged social life too. In my later career with them, I met a lot of students who spent a lot of time at NIIT and was quite proud to belong, calling themselves NIITian and using the merchandise issued/ sold by the company. I would accept that the company lost its way, primarily because it was For Profit and submitted to the vagaries of the stock market: I would pin down the turning point somewhere around 1997/8 when the company tried to implement EVA (economic value add) as a measure of productivity. This somewhat made the managers see everything with a financial prism than anything else: Any extra space left unused not to be seen as a gathering place for 'NIIT Club' but, if possible, to be let out; the more experienced tutors, who were costly because they have been around for a while but had 'limited productivity' because the students paid the same for their class, were either to be kicked upwards as managers (mostly, they made bad managers) or to be eased out of the company. Besides, EVA made company value its franchisees: When I joined, being a teacher in NIIT was the best job around - it came with better pay grades, perks and career paths; soon after EVA, it was about becoming the salesmen, selling franchises or books to franchisees. Whatever the rationale of this model, this failed: NIIT was somewhat left out when the education expansion really happened in India after 2004/5. One could say that the interest of the promoters by then shifted to software, which was growing fast, but NIIT only became a second-rate software player and a second-rate education company. The prospect of being a world leading education company, which was a realistic goal for everyone in the company in the mid-90s, did not materialise. One could say that the Management Team of NIIT lost its way, but, from my experience, this is common in the For Profit play: NIIT did almost everything by the book - and indeed, it had hired very expensive management consultants and managers for this - but still it failed.

In a conference I attended last week, a prominent investor who invests in Education made a point about successful education entrepreneurs: They tend to become better if they have come from Not-for-Profit background, he said. I am not sure whether such a generalisation can be made, particularly as Not-for-Profit is quite a nebulous category and this categorisation hides more than it says. My own benchmark is somewhat different and no doubt informed by my formative experiences: A successful education organisation tend to value its tutors above everything else. So far, it is not strategy but quality of teaching that made education brands, and in fact, opposite examples, where bad teaching undermined great strategic moves, are abundant. To judge whether a company is good or bad, whether it has any potential to be a good education brand, it is best to start with tutors: Who they are, where are they in the hierarchy (are they seen as factory hands or at the top table), and how involved are they in day to day running of the organisation. In fact, many public institutions will violate this 'teacher first' principle that I mention here. Most of them tend to be full of managers and administrators, who keep adding layers of bureaucracies and processes to justify their existence, and these institutions tend to run on adjunct tutors who are paid by the hour and have very limited commitment beyond just keeping their contracts going. Whichever financial genius discovered and pushed through the casualisation of teaching workforce, must have completely misunderstood the nature of education: They saw teachers as delivery people, factory hands, and employed the simple industrial era principle to casualise them. However, the teachers are not 'delivery' people in most good education organisation, but designers and owners of student experience, and they are what the organisation is: Their function is as core as it can be. Casualising them is like running nuclear laboratories with tenured security people but adjunct nuclear scientists.

I know for most For Profit Higher Ed investors and college owners, there is something intuitively problematic about this argument: They often see the teachers as pampered, overpaid and lazy. Some of it is actually true: Many people working in these colleges make academic sounding excuses while behaving in a mercenary manner. I am not sure what leads to what - whether the approach the employers take make such behaviour necessary or the other way round - but I am sure the truth will be somewhere in between, with some responsibility from both sides. But it is amazing to see how most tutors will have no institutional affiliation and will be expected to have none. This is one of the key problems that private higher education has not addressed yet.

This is somewhat central to my studies in the For Profit Higher Education, not because I am sympathetic to teacher unions, but because I think the private higher education has come to the point where they have to address the brand problem. There are many good things in For Profit Higher Education, and some of the governance practices and efficiencies can inform practices in public higher education. But, because of the issues mentioned above and more, For Profit higher education fails to crack the key requirement in higher education - that of brand, credibility and trust. While they claim to be innovative, this innovation is disproportionately about efficiency and less about brand. In fact, brand thinking in private higher education is to ape the practices of public ones, elaborate graduation ceremonies, lavish premises, titled professors etc., and one would think that it is yet to find ways to respect themselves what they do. [I am surely making generalisations, and some institutions are good at branding themselves, but the lack of confidence in branding mostly holds true].

Now, there is a line of reasoning that For-profit Education is not about creating Harvard or Stanford, but good education at a different level. However, the 'good' bit is central to the proposition, and not just about rhetoric. If MOOCs actually pose a challenge to anything, that will be to the run of the mill For-profits, which are surviving on issuing credentials which are worth nothing. The moment MOOC credits start gaining ground - there is evidence it already is - and get into areas like business and law, it will first take away a significant chunk of business away from For-profit (or at least reduce the profit for For-profit, which is already reeling under the various regulations in different countries). So, it would come down to brands, trust and good service, as competition and scrutiny finally arrive in For-Profit sector.

This is why I study the sector: Not because of the money that is being made, but rather for this is a sector in transition and interesting answers are to be found for challenging questions.


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