Adapting to the Emergence of Educational Micro Markets

By William H. Graves

Sequence: Volume 32, Number 5

Release Date: September/October 1997

1. The doctor discovers a problem which with near certainty can be resolved through drug therapy, surgery or some combination of these. With the patient's consent, the doctor has the authority and expertise to resolve the patient's problem.

2. The problem can be resolved or contained but some critical part of the treatment depends on the patient's willingness to alter behavior. For example, the patient might be required to give up certain food groups or to exercise regularly. The doctor's authority and expertise alone are not enough to effect a cure. To succeed, the doctor must also lead the patient to change certain aspects of life style. Many patients in this circumstance fail to adapt and continue to expect their doctors to utilize technical skills alone to solve such problems.

3. The doctor finds an unsuspected terminal illness that will lead with near certainty to an accelerated death. The doctor's chief responsibility, in addition to easing the physical pain of death, is to help the patient and the patient's family adapt their emotional and economic lives to this life altering diagnosis. The doctor must behave in a way that encourages the people involved to invest a new non-technical authority in the doctor/patient relationship. The doctor's leadership skills are often taxed to their limits.

The Heifetz Theory of Leadership

This is not a book review, but it is written in response to two recent readings. The "Crisis in Information Technology Support: Has Our Current Model Reached Its Limit?" (Polley A. McClure, John W. Smith and Toby D. Sitko, CAUSE Professonal Paper Series, 1997) offers a timely and compelling account of the issues confronting information technology professionals in higher education today. In Leadership without Easy Answers (Ronald A. Heifetz, Belknap Press of Harvard University Press, 1994), author Ronald A. Heifetz provides a generic framework for understanding this crisis when it is framed in the broader context of trying to provide leadership from a base of limited authority. Heifetz describes the difference between authority and leadership and focuses on the "adaptive work" that is so often necessary to bridge the gap between the limits of authority and the broader scope of leadership required to resolve complex issues.

Senior technology officers in colleges and universities have authority over a central support staff and a set of information resources and technologies, for example, but the use of these resources is in the hands of a loosely coupled federation of external academic and administrative departments and their personnel. How then can the senior technology officer set priorities for central information technology (IT) expenditures and services? In particular, how should the senior technology officer work with other senior officers to chart an institution's response to the new educational markets being opened by the development of a global learning infrastructure based on today's rapid advances in Internet technology and connectivity?

On those issues where the senior technology officer has relevant expertise but limited authority, Heifetz would recommend working across organizational lines with the federation of other stakeholders to "lead" them to adapt their independent interests to a set of common priorities. An example from Heifetz's experience as a physician will clarify these concepts. A doctor typically faces one of three scenarios in diagnosing a patient:

In many domains of authority the distinction between authority and leadership is not so easily codified. Heifetz's idea is that when an issue is complex, authority alone can seldom resolve the issue to the satisfaction of most stakeholders - even though most will assign ownership of the issue to an authority and expect a solution from that authority. Instead, leadership is required to craft responses to complex issues involving a diversity of stakeholders. In this view, leadershipis the art of utilizing whatever expertise and trust are vested in authority to earn the collaboration of the other stakeholders in adapting their diverse interests to craft a common response to an issue which cannot be resolved to the satisfaction of most stakeholders by the exercise of expertise and power alone.

The domain of authority of a senior technology officer in higher education is rich with examples of complex issues requiring the exercise of leadership. Among the many described in "The Crisis in Information Technology Support," here are a few:

What is the right balance between central and departmental expenditures on IT resources?

What is the right balance between central and departmental IT support staffing?

What is the right balance between providing IT services for a fee and for "free" - the library model?

What is the right balance between mandating hardware/software standards and taking a laissez faire approach to hardware/software acquisition and support?

What is the right balance between administrative and academic support?

More generally, how should the central IT support organization set its priorities in light of the diverse priorities of its growing base of customers?

There is another current issue, however, in which information technology support is deeply embedded and which at almost all levels of institutional authority poses an interesting challenge to the Heifetz theory of leadership. That is the issue of "distributed education" - how an institution should adapt its course and curriculum offerings, and its mission, to the new educational possibilities afforded by the emerging global learning infrastructure based on today's rapid advances in Internet technology and connectivity.

Applying the Heifetz Theory to Distributed Education

Whether referred to as distance education, distributed education, the virtual university, or any other of a host of labels describing some of the new possibilities for online education, this issue is receiving institutional attention in many colleges and universities today - and in many companies. Several programmatic efforts are underway.

The Western Governors University is a stake driven into the virtual educational ground by a group of governors determined to seed a host of new possibilities for workers to acquire and certify the acquisition of the competencies demanded by industry in the western states.

The IBM Global Campus is a collection of tools and services designed to enable an institution or company to develop and deliver distributed educational programs.

The Sloan Asynchronous Learning Network is a grant and dissemination program designed to help colleges and universities implement their plans for distributed education.

The Partnership for Distributed Learning hosted by the Institute for Academic Technology at the University of North Carolina at Chapel Hill is a collaborative effort among approximately 15 colleges, universities and companies to "get smart" about distributed education together.

There is nevertheless little evidence that today's institutions know how to formulate and analyze the issues involved. Declaring an institution to be in the business of distributed education without a clear understanding among all stakeholders involved of the precise nature of that business would too often be, in Heifetz's terms, a declaration of authority rather than a result of leadership. In too many institutions, it is not clear who has responsibility for distributed education as an issue. In light of the critical nature of technology infrastructure and support to the virtual enterprise, the senior technology officer is often involved. But the fundamental academic nature of the issue and its mission-critical implications suggest that the CEO or CAO should have ultimate responsibility for deciding how to engage the new opportunities for online educational offerings. In any case, there are opportunities for leadership from many positions of authority - CEO, CAO, the senior technology officer, the continuing education or academic outreach officer, and the deans.

EDUCOM's National Learning Infrastructure Initiative has recognized the complexity of the issues involved in distributed education and the diversity of attendant stakeholder interests. These issues have been identified and discussed by representative stakeholders at two symposia during the past year. This article draws on these discussions and a framework white paper (Carol A. Twigg and Diana G. Oblinger, The Virtual University, EDUCOM, 1997, Washington, DC).

Distributed Education as a Collection of Educational Micro Markets

The Internet and, to a lesser extent, interactive video networks are enabling a more granular differentiation of educational opportunity than does the old Carnegie model based on institutional types, and this is leading to an era of unregulated free trade in the educational marketplace. A free market tends to bring supply and demand into equilibrium, matching the needs of buyers with the services or goods of sellers. In education, there are two basic types of educational offerings from sellers: 1) those aimed at personal enrichment and basic communication and social skills and 2) education/training offerings aimed at more specialized career or workplace needs. A baccalaureate degree program in history, for example, is weighted toward the former of these with its typical emphasis on liberal education. In contrast, an undergraduate degree in a profession or a field of science might be weighted toward professional workplace skills even though typically featuring requirements in general education in addition to requirements in the major. Although this enrichment/workplace taxonomy is not perfect, it does allow for further differentiation along dimensions related to age, educational achievement, content, delivery method and other variables. For example, an introductory course in dental hygiene might be categorized as a baccalaureate workplace offering, while a course updating dental hygiene skills in light of scientific or technological advances in dentistry might be categorized as a post-baccalaureate workplace offering, whether offered for credit or not.

Similarly, a high-level taxonomy of educational demand or buyers might include three basic categories. One of these represents the individual who is paying for an educational offering through some combination of personal resources and direct subsidy or loan from a governmental entity at some municipal, state or federal level in the U.S. or elsewhere. A second is the corporation or other organization - a foreign or domestic governmental organization, for example - which is contracting with an educational supplier on behalf of the educational needs of a group of its employees. The third represents a unit of government - the state, for example - that is directly subsidizing an educational provider, not on behalf of a group of its employees, but in the larger public interest. It is arguable in this last case that the individual is still the customer, but that would miss a key point: many state legislatures appear to hold the view that public universities treat themselves as the primary customer of their state appropriations and plan programs to please their faculties, sometimes without regard to the legislature's perception of public educational needs. In any case, this last category that treats a governmental entity as the customer on behalf of the public good is under great pressure as domestically appropriated resources flowing directly to educational institutions shrink both as a percentage of overall appropriations and as a percentage of institutional budgets.

With these categories in mind, Matrix 1 depicts the overall market for education and training.

This matrix can be refined by any educational provider in many different ways to reflect competencies, mission, competition, content, delivery method, audience profiles and other variables. Matrix 2 is an example at a next level of detail illustrating the possibilities for using educational achievement to differentiate educational products - which might then be further differentiated by content and delivery method. In a similar manner, educational buyers can be refined, for example, by differentiating foreign from domestic governmental entities or by differentiating individuals by their state-resident status or their full-time or part-time status.

Further refinement of such a model by content and delivery method, for example, leads to highly differentiated educational markets - educational micro markets. Each of these micro markets (cells) can then be analyzed, for instance, in the context of a decision matrix assigning percentages or absolute numbers to represent total market provision for each product (row) as a function of the demand columns. That is, a business school at a public university might use Matrix 3 to depict its decision for delivering its MBA degree and its executive education programs. It specifically chooses not to deliver online programming to individual customers to avoid the problems of customers' expectations for supporting their Internet connections and software configurations. In contrast, the contracts for delivering some programs online to corporations and foreign governments include provision for local technical support by the contracting buyer.

One more hypothetical example will be illustrative. A few faculty members at a public university have received release time and other support from their institution to develop an extensive collection of learningware and related assessment software targeting the basic mathematical skills typically associated with high school courses in algebra and developmental math courses in higher education. The university retains the copyright to these materials along with the right to use them in its own for-credit course offerings and to share them with the state's public schools for their use. In making any other use of the materials, however, the university agrees to share any attendant revenue with the developers. The university, through its independent foundation, then proceeds to offer a series of related not-for-credit online courses to anyone with an Internet connection. Each of these non-credit courses is designed to prepare learners to pass a test administered and certified by Educational Testing Service. The revenue from these activities accrues in its entirety to a foundation account, is shared according to plan with the developers, pays graduate and undergraduate assistants to provide course-related online tutoring services to clients, and is otherwise invested as part of the university's endowment. The reader is invited to construct a micro-market matrix to depict this set of educational activities.

It is technology that enables an institution or company to consider entering an educational micro market previously closed to it by the constraints of geography, time and costs associated with the traditional classroom, library or laboratory. The example of a business school offering an MBA degree and executive education programs online to reach a foreign audience is a case in point. In each of the above examples, the university presumably had to face a series of policy and financial issues that informed its decision making process.

Applying Adaptive Leadership to Issues in Distributed Education

The role of adaptive leadership in deciding issues of distributed education can now be seen as helping an institution or company develop a framework, perhaps along the lines suggested above, to enable its stakeholders in distributed education to decide which, if any, emerging educational micro markets to enter and which to drop in light of competition or other factors. Without a micro-market analysis, issues will be overlooked. For example, online educational offerings under contract to a corporation are likely to be easier to support from a technical perspective than those offered to individuals. Remote access and desktop support, for example, might be handled by the corporation's intranet support staff as part of the buyer/seller contract. In contrast, individuals might turn to the educational provider with their remote access orsoftware support problems, and this might dictate a least-common-denominator approach to delivery technologies and also increase the load on an already overburdened support staff.

The decision process is rife with policy issues revolving around the rationale for entering a particular micro market, balancing the need for central and departmental support for delivery technologies and student services, quality assurance, and a host of other issues. A very high-level distillation of these issues for traditional colleges and universities might include the following:

1. Is the institution considering distributed education to

extend its public service mission,

enhance its image,

reach "profitable" new markets,

bank new revenue well above any new costs incurred,

give its faculty an additional income stream, and/or

meet other goals?

2. From the institution's perspective, what is the best segmentation/categorization of the new educational micro markets opened by technology? How does this segmentation relate to

institutional or departmental core competencies and extant content areas,

opportunities to form partnerships with other institutions or companies, and

external competition from similar institutions or from the profit sector?

3. What is the best process for deciding which of these markets to

enter as an institution and with what motives for public service and/or institutional revenue,

leave to departmental discretion and with what arrangements, if any, for revenue sharing between the department and the institution, and

leave to faculty entrepreneurs and at what cost to them, if any, and at what profit to the institution, if any?

4. What delivery system(s) will be used to reach distant students? Will these systems scale beyond the pilot stage? What digital infrastructure will be needed and at what additional capital and continuing costs to the institution or to participating departments?

5. What is the best way to organize and pay for any central or departmental services required

to support faculty and curriculum development,

to support distant learners with a range of student services - admission, registration, financial aid, billing, etc.,

to provide academic support services to distant learners, and

to provide technical support to distant learners?

6. What educational and fiscal policies will have to change if

cross-credit agreements with partner institutions are envisioned, and/or

seat time (the contact hour) is not the currency of the envisioned distributed learning environment?

7. What organizational issues must be resolved? Should a central authority be appointed for distributed education (the virtual campus) to ensure success? What should be the balance between central and departmental authority?

8. How will success be evaluated, especially in terms of student learning and learning productivity?

There will be many ways to answer these and a host of more detailed questions. Each set of answers will position an institution at some point on a rich spectrum of possibilities. Three points on this spectrum of possibilities illustrate the complexity of the current dialogue on distributed education.

A traditional institution (college or university) can move selectively to offer online versions of existing courses and degree programs. This is already happening in many institutions in an ad hoc incremental manner that adds value to the institution's core programs.

A traditional institution might retain most of its traditional market niches while selectively including its online courses and other online educational offerings under the umbrella of a meta university, such as an open university operated by a state's university system or some other profit or nonprofit aggregator/broker of educational services dedicated to relaxing the constraints of time, place and/or pace. In this case, the institution's role might be similar in many dimensions, for example, to that of the University of Utah in the Western Governors University.

A traditional institution might retain most of its traditional market niches while becoming a self-contained global campus by offering and brokering a comprehensive set of online degree programs that depend both on its own courses and on courses outsourced to other institutions and companies. The institution would become a mega university that aggressively targets new audiences by relaxing the constraints of time, place and/or pace.

If an institution's intention is to position itself closer to the last two of these possibilities than to the first, there will be enough complex policy and resource issues involved to merit the early creation of a position of leadership and responsibility for determining and managing the institution's adaptive process for defining its online future. Such a position will require a substantive understanding of the academic program and its attendant student services and a working knowledge of the Internet, its future, and related technical support issues.

Bill Graves is interim Chief Information Officer at the University of North Carolina, Chapel Hill and is founder of the University's Institute for Academic Technology. [email protected]

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