The House is On Fire – When It’s Innovate or Die, Skills Can Help You Respond

In a recent article titled “College Ed Must Adapt or Die”, Jason Wingard, the President of Temple University in Pennsylvania stated simply, “Consider this my burning platform memo for higher ed.” What was he referring to? There is a crisis happening in higher education right now, and if it were any other type of business, there would be widespread panic.

But some of these factors are the “elephant in the room.” They’re often talked around, but not often mentioned directly. And to continue the elephant analogy, it’s also like the three blind men trying to describe the animal. One grabs the truck, the other the tail, and yet another grabs a leg. Each describes something vastly different because they can only feel (or see) part of the elephant, not the whole.

Specialisation in education often means there are few who can see the whole picture. But specifically in western nations, such as Australia and the United States, the whole picture is a dire one. 

Wingard was referring to the now famous memo by the Nokia CEO in 2011 in which he referred to the company’s position as “standing on a burning platform.” The story was of an oil rig worker, trapped on a burning oil rig, who faced the choice to stay and face the flames or jump almost 100 feet into the icy North Sea and hope for rescue.

In his case, he referred to Nokia’s need to innovate and once again become a leader in mobile technology or die. 

Check your pocket. Do you have a Nokia phone there? You might if you’re an Android user who’s looking for an affordable alternative to more expensive models, as the company has been purchased by HMD Global and worked to adapt to a new smartphone market. But they are still running behind giants like Apple and Google. Why? They took action too late. 

When we look at higher education, we see strong warning signs. We have options available to us now, but we must act before it is too late, and we end up trapped on a burning rig. 

Let’s look at the signs and potential solutions to the problems they indicate.

The Business Lifecycle

Both regular businesses and non-profits go through a cycle: the startup phase where things are exciting and new, the transition to normal operations, and then a time when the viability of the business model peaks. As a business moves down from that peak, they face two choices: reset and innovate so that excitement and the corresponding revenue rises again, or understand and accept that the business will enter the terminal phase and eventually fail.

Organisational Lifecycle Model

The terminal phase is when a business dies simply due to a lack of innovation and a willingness to go through a potentially painful reset process. As you can see in the graphic above, once the decline starts, it’s a sharp drop for those that don’t adjust. We’ve talked about this related to higher education in the past, but perhaps not as directly or with the urgency we will here. Because like it or not, the house is on fire, and we must act to not only put it out but rebuild it with more fireproof (and futureproof) materials. 

A word of caution: If you’re reading this and thinking it couldn’t possibly happen to your institution – after all, consider its history, its size and standing in the industry – then you may want to consider some examples from recent history. Such as Blockbuster, who in 2004 had 9,000 brick-and-mortar stores worldwide and a new one opening every 17 hours. They employed approximately 84,300 people across the world and were at the peak of their industry… until 2010, when they filed for bankruptcy and by 2014 had closed their last shop.

But this is not about video stores. Dozens of colleges have closed in recent years, and students’ education is not only disrupted, but they often struggle to effectively transfer to another institution. Efforts to protect students in these cases have often failed. An example is the Concordia Law, a branch of Concordia University in Portland. The innovative law school opened its doors in Boise, Idaho in 2012, but closed after the summer term in 2020. The parent institution also closed due to financial difficulties. The law school attempted to find a different parent university to support them, but all efforts failed. 

As a result, 150 students and 30 faculty found themselves searching for what would come next. “This is the end,” said Alan, a student who unsuccessfully applied to transfer to University of Idaho Law. “I have no idea where I go from here.”

Did this mean the end for all players in the market? No. But higher education is at the point where the industry must either innovate or die – and smart institutions, ones that will see the other side of it, are the ones that are taking action now. 

So let’s look at what’s happening, and what’s changed for us to raise the alarm like this.


Treating Higher Education Like any Other Business

Netflix began to lose users this year, nearly one million in the second quarter of 2022. Why? Netflix had a first mover advantage – they were the first to deliver movies straight to your home so that you didn’t have to go to a video store and then the first to stream online movie content. 

Note that they pivoted when digital content became more prevalent. The DVD and video rental industry was dying, so they chose to adapt along a new path. Fast forward to today and there is strong competition, and what was the only game in town, no longer is. Many feel that Netflix must innovate or die once again. When the announcement came that Netflix had lost that many subscribers, share prices fell. The market lost confidence in the company. 

Similarly, higher education is shedding users. In 2022, enrolment in the US dropped, again. This makes over a decade of declining enrolments and a net loss of 2.5 million students over the last decade. But even more dire? Nearly 14% fewer U.S. teens say they currently plan to enrol at a four-year institution today compared to before the pandemic. Not only are fewer students enrolling in the first place, but future learners are telling us they don’t plan to enrol at all. This challenge is compounded by the fact that  36% of American undergraduates fail to complete their degree within 6 years.

This is due, at least in part, to the decline in the perceived value of degrees. It’s important to note that this is a decline in perception, not in actual value. For some professions, a degree is an essential stepping stone to employment, from engineers to lawyers and medical personnel among others. For other careers, having a degree may not be essential but is seen as a big part of getting ahead. The broad knowledge base provided by a degree still has value. The issue is the perception of that value by both learners and employers.

This perception along with other issues has contributed to the decline of the degree.

The Decline of the Degree

New data from a study by Strada states it simply: The percentage of aspiring adult learners who believe education will be worth the cost dropped from 77% to 59% since 2019; those believing education will help them get a good job dropped from 89% to 64%. On top of continued declines in the perceived value of higher education, the population age demographic of traditional-aged college students is going to drop by roughly 15% between 2025 and 2030. Put together, all of this means that a decline is likely to continue for at least another decade.

If any other business was told that their customer base had been shrinking and would continue to do so for the next decade at least, there would be panic in the boardroom. Everyone would be asking the same question: how do we turn this around? No C-Suite or group of shareholders would accept such numbers. 

And it’s not just learners. Industry, the reason most learners pursue degrees in the first place, is changing their attitude as well. A full 81% of employers agree “Organisations should hire based on skills rather than degrees.” And 68% agree “Organisations should proactively hire candidates from non-degree pathways.”

The same is true for higher education. But there is an additional challenge, and one we must also face inside the burning house.


The Future of Educators

While not universal, in many regions educators are leaving the industry in droves. During the Great Resignation due to the pandemic (in part), 40% of employees considered leaving their job, and according to a Microsoft survey, over half of those left their industry for another one. The hardest hit industries? Healthcare, education, restaurants, and ironically human resources.

Why education and healthcare? Medical personnel and educators were put on the front lines of the pandemic, were often underpaid and underappreciated, and many faced unprecedented challenges. Burnout for all of these industries was high, many who work in them are underpaid compared to other professions, and being educated themselves, they have multiple career choices. 

It is estimated that staff reduction exercises across the whole higher education sector in Australia has resulted in the loss of approximately 40,000 people between May 2020 and 2021, with further restructures and downsizing undertaken in 2021 impacting on fixed-term and continuing staff.

The greater challenge is that while industries shift to looking for skills rather than degrees, they still need educators to impart those skills even if the form of education changes. However, fewer students are pursuing teaching degrees. This means not only is employee retention at an all-time low, but the source of new talent is also shrinking.

How do we turn all this around?

The Importance of Vision

“Where there is no vision, the people perish,” is a famous quote, and it applies to higher education here. Why are teachers burning out and leaving? Because they don’t see the vision of the future they need to stay motivated. 

Instead, they see a case of the same methods that have always been used, but also a declining workforce around them. Their workload increases, but not with meaningful work. They are asked to teach more subjects, sometimes out of their area of expertise, simply because there is no one else to take over that class. Academics are working at maximum capacity but unhappily so.

In addition, they want to see innovation. That means more than offering some classes online and advancing remote learning. It means a new approach to education, one that provides better student outcomes and higher educator satisfaction. Frankly, they need something they can believe in and get behind. It’s providing the feeling of knowing they are making a difference. Having this experience, say participants in recent research, is “nourishing”, “rewarding” and “sustaining”.

So what do we do? How can we act proactively and “save the house”?

The Business Answer

How does any other business innovate? Simple. If demand for your product is down, you either revitalise your product or create a new one that meets the changing needs and wants of your customer. 

Think of the music industry. First, there were radio, records, tapes, and CDs. While live performances have always been a part of the industry, those are not how consumers interact with music daily. People purchased music so they could listen to it on their time and on their terms. It was about convenience. Streaming provided access to a much larger potential audience, giving artists a chance to capitalise. 

This required a shift in marketing, delivery, and changes in how music was produced. This is a lesson for educators as the same opportunity to innovate applies to education too.

  • We must change the way content is produced and delivered – it started with MOOCs and other digital education products, but this must be the focus of education: a better product, whether offered on-demand or in person
  • The focus must shift toward the skills industries are looking for – the product itself must change, and we must understand that soft and hard skills are both important and can be taught concurrently, and we must find the best ways to do so
  • These skills must be delivered to students in a way they want to “consume” their education – we must meet learners where they are rather than trying, as we have in the past, to bring them to us
  • We must change how we offer proof of learning – and this means a holistic change from educators to learners to employers. We must bring everyone to the table and develop a common language and personal evidence records that are portable, unalterable, accessible, and accepted by employers everywhere

One thing we do know is that being proactive has the potential to deliver significant gains for those organisations that make their move sooner rather than later. 

Back in 2020, PwC estimated the economic implications of two potential recovery scenarios. The first scenario, ‘Fortress Australia’, is characterised by insular decision-making and high levels of government intervention. The second scenario, ‘Enterprise Australia’, reflects a ‘go for growth’ mentality. 

The ‘Enterprise’ scenario, projected that Australia’s education sector could see an additional ~A$0.5bn of activity to 2025; and the ‘Fortress’ scenario, would see a loss of ~A$1.7bn (or -A$2.2bn against Enterprise). Those are billions with a ‘B’.

We have talked about these things before, but perhaps we have not pulled them into one place, one post that looks at the house that is on fire and ask, “How do we put this out and save higher education?” 

There are encouraging signs at an Australian Federal level through the national Jobs and Skills Summit of the recognition of the need for, and support for, change at structural, standards, industry and institutional levels. We’ll watch this space with interest.

It’s clear that we must innovate or die. It’s time to put the fire out and then rebuild the house to be stronger, more fire resistant, and prepare for a new future. It means reinventing the degree while at the same time offering alternatives and additional pathways and gateways to further education and knowledge. All of this led to what may be a painful turnaround at times. But it’s necessary. And the time to start is now, before it truly is too late.

Connect with us

As the world’s first Credential Evidence Platform, Credentialate helps you discover and share evidence of workplace skills. It creates a highly interoperable skills infrastructure that connects, collates and creates order from chaotic or dark data. It identifies skills in the curriculum, maps them to globally recognised skill definitions and aligns to frameworks. Institutions can manage and track skills attainment across the institution, against frameworks and see where improvements can be made. For each learner, a personal evidence record is created – as unique as every learners’ journey. Rich skills information, qualitative and quantitative performance data and links to artefacts of learning are baked into a verifiable digital badge that can be shared. This gives learners the confidence to speak to their strengths, the evidence to prove it and boosts their employability by sending a ‘ready-to-hire’ signal.

If you’d like to learn more about Credentialate, we invite you to Learn More or Schedule a Demo.

Stakeholders in the Modern Credential Marketplace

Read more on the Edalex blog series as we explore who stakeholders in the modern credential marketplace are, what drives them and what challenges and opportunities they face:

  • Final-Stakeholders-Modern-Credential-Marketplace-1200x685 Lens on Learners – how can micro-credentials help today’s learners achieve their education and employment goals?
  • Lens on Educators – if micro-credentials are driving a shift in how education providers approach skill development, how are they responding and what impact does it have?  
  • Lens on Employers – how are companies responding to the need for work-specific skills and how are micro-credentials impacting on their ability to verify candidate skills?


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