Will your college go bankrupt?

Speaking at the Startup Grind conference in Silicon Valley last week, noted management guru and Harvard Business School professor Clayton Christensen said, “Fifteen years from now more than half of the universities will be in bankruptcy, including the state schools.” According to Christensen, “people who are very complacent are in deep trouble.”

Christensen is well known for his work on disruptive innovation. He applied his theory to higher ed in a book he co-authored with Henry J. Eyring entitled, The Innovative UniversityPeople who are familiar with Christensen’s work, the research that backs it up and his track record, know to take his warnings seriously.

Though one cannot hope to do justice to Christensen’s work in a solitary blog post, suffice it to say that Christensen thinks the “complacent” institutions will be in deep trouble because of the disruptive innovation that is coming to higher ed, propelled by technology as well as the unsustainable price premium that has developed. If Christensen’s theory of disruptive innovation holds water (I think it does), what does this mean for a prospective student who is searching for the “best” college?

At the very least, it means some colleges will be winners and others will be losers during this period of disruption and transformation of the higher ed sector in the U.S. Mark Cuban posed the question, “Will you college go out of business before you graduate?” Cuban thinks “[t]here will be colleges and universities that fail , declare bankruptcy or have to re-capitalize much like the newspaper industry has and long before the class of 2018 graduates.”

Obviously, no one wants to attend a college, or hold a degree from a college, that ends up in bankruptcy or closes its doors. So you’ll want to do your best at identifying, and affiliating yourself with, one of the colleges that will survive and, hopefully, may even thrive in the new environment.

Predicting future events is no easy task. If it were, everyone would achieve great returns from their stock market investments. Yet there are some signs that may point to future success (or failure). Just one of those will be mentioned today. Others will be covered in subsequent posts. Some have already been covered, albeit in less explicit ways.

The last paragraph of The Innovative University captures it well:

University communities that focus their activities and measure success in terms of absolute performance rather than relative rank can enjoy a bright future. If they suppress the compulsion to have everything and instead play to their unique strengths they can achieve much more than they do now. They can be the “best” in the eyes of their own students, faculty members, and public and private supporters. They can serve more of their chosen students at higher levels of quality. They can become more expert in their chosen subjects and practice more individually customized and more influential scholarship. They can contribute more to the intellectual, economic, and moral vitality of the country and the world. If they embrace innovation and give up the ambition to have it all, they can have much, much more.

If I were choosing a college today, that’s exactly the kind of place I’d be looking for — a college that embraces innovation, measures its success in terms of absolute performance and achieves high levels of quality. Is it an innovative college, or is it complacent? That’s exactly the question I would seek to answer.

One response

  1. Pingback: Shutting down state university campuses might be the next step « Finding My College

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