Students hire colleges and universities in order to make progress in their lives, but is higher education fulfilling the job to be done?
In his book Competing Against Luck, Clayton Christensen presents “jobs theory” and the need to identify the job customers are hiring you to do in order for them to make progress in their lives. The customer does not hire the product or service, but rather the experience that enables them to make the progress they are seeking.
The question then becomes: What job is the customer hiring the organization to accomplish? When the answer to that question is determined, an organization should organize itself around that job by creating metrics that matter to the customer.
One of Christensen’s case studies is Southern New Hampshire University (SNHU), a private nonprofit accredited institution with 3,000 on-campus students and 80,000 online students. SNHU implemented jobs theory to move from a second-tier institution to one of the most innovative organizations in the world.
SNHU once had a one-size-fits-all approach and treated all students the same. With a jobs lens, SNHU realized that students varied in their reasons of why they hired SNHU with traditional students seeking coming-of-age experiences to non-traditional students demanding speedy completion times focused on convenience, customer service, and credentials.
Once SNHU focused on the job students were hiring them to do, they organized around those jobs to provide student experiences that helped them make progress in their individual circumstances. At the end of 2016, SNHU closed in at $535 million in revenues, a 34% compound annual growth rate over six years.
Similarly, Watson University, a nonprofit institution based in Boulder, Colorado, has organized around the student job and is driven to disrupt higher education with a new university model. Watson’s entrepreneurial nature starts from within the organization which is designed to have an agile team structure, a laser focus on the job to be done, and an innovative financing model focused on derisking a student’s educational investment.
Agile Team Structure to Serve the Student
In many large higher education institutions, there can be more than a dozen layers between organizational leadership and the ultimate customers, the students. The layers within an organizational chart represent obstacles to communication, iteration, and feedback between the student and the decision maker.
Watson believes short feedback loops between students and decision makers are critical in the design and implementation of an educational experience. Short feedback loops allow for rapid iteration and implementation of innovations based on what works and what does not.
Therefore, Watson is a highly flat organization with only two levels and a non-hierarchical organization structure. Such a structure enables the institution to rapidly integrate feedback and ideas to continually improve the student experience and thus increase the quality of the education and student outcomes.
The key to Watson’s success lies in the hiring process to ensure that the flat organization structure works well. Past experience in higher education is not a necessity, and sometimes comes as a detriment. Watson searches for individuals who can view higher education as a blank canvas to design the highest quality experience for students from the ground up.
Watson’s flat organizational structure and hiring process lends itself to an agile team structure that can rapidly respond to student needs.
Laser Focus on the Job to be Done
Can you imagine a town in which all restaurants served every different kind of food? Rather than distinct Chinese, Indian, and American restaurants, what if each restaurant served all different types of food simultaneously? One consequence would certainly be a sacrifice in quality of the overall food and lack of specialty restaurants best tailored for the preferences of their customers. For these reasons, it is rare to find a lack of specialists in most industries, yet the same is not true in higher education.
Most higher education institutions strive to have the strongest programs in nearly every discipline. The reality is that there is only one #1 spot on any ranking list, so it is counterintuitive to try to be the best at everything.
In the Innovative University, Clayton Christensen describes the need for institutions of higher education to choose an area of focus in which they can strive to be the best in the world and to then pour their energy and resources into that focus.
Babson College is a great example of an institution that has put their stake in the ground with a tailored focus on entrepreneurship. Similarly, Watson’s laser focus is on early stage social entrepreneurs, ages 18 – 23, focused on solving the world’s toughest challenges. Rather than an academic study of social entrepreneurship, Watson is a school designed for students to build a social venture and earn their degree in the process.
Watson’s focus allows for continual iteration and modification of their programs to create the highest quality experience tailored for early stage, student social entrepreneurs. Watson certainly is not for everyone, but for the students selected, Watson provides the highest quality, hands-on experience in the world.
A Financing Model to Derisk Students’ Educational Investment
Student higher education debt is an enormous problem and has been written about extensively. However, a hidden side of student debt that should receive equal attention is how student debt breaks the accountability link between the student and the institution.
Institutions receive funding based upon student completion rather than a students’ future success. As such, institutions are incentivized to drive student degree completion, but are not incentivized to care how, or if, students are able to repay their debt as alumni. As a result, institutions can provide an educational experience that may be mismatched to the students’ needs and the needs of the market, without experiencing the consequences for doing so.
Watson derisks the student’s educational investment through an innovative income sharing model. First proposed by Milton Friedman in the 1950’s, income sharing works as follows:
Instead of paying tuition upfront, students can choose to share a percentage of their future income for a set number of years. Unlike loans, payments do not begin until an alumni’s salary reaches a minimum threshold. There is also a cap on the total amount that will ever be shared to ensure financially successful students do not pay back exorbitant amounts.
Income sharing gives alumni time to experiment with their startup ideas, bootstrap, or even travel and find the life and career most authentic to them. Whereas the debt-based alternative often forces students into taking a default career path simply to pay back student loans.
Income sharing ensures that Watson is only successful if their alumni are successful.
Watson believes income sharing offers a financing model that gives students and alumni the freedom to trail blaze their path and maximize the positive impact they can create throughout their lives, while holding the institution accountable to set students up for success.
Through an agile team structure, a laser focus on the job to be done, and a financing model that de-risks students’ educational investment and provides freedom in their early career, Watson creates a highly innovative culture and continually refines and improves the student’s educational experience. These three principles can help institutions overcome the fundamental, systemic problems in higher education and fulfill the promise and opportunity that students seek for progress in their lives.
About Watson University
Watson is a new model of higher education in Boulder, Colorado specifically tailored for next generation innovators, leaders, and social entrepreneurs. Over the past four years, Watson has graduated 89 students who have raised millions of dollars and impacted tens of thousands of people through the social ventures they started at/through Watson. Thanks to a partnership with Lynn University, known as “restless early adopters” and one of the country’s most innovative institutions, Watson is the first incubator that can lead to a Bachelor’s degree, in which students earn not just credit, but their degree for building a social venture.
About Eric Glustrom
Eric Glustrom is a guest author for ELI’s blog. Eric is the founder of Watson and Educate! – two organizations transforming education worldwide. Watson is a new university model based in Boulder, Colorado dedicated to supporting next generation innovators, leaders and social entrepreneurs to solve the toughest challenges facing the world. Educate! currently reaches 240,000 students across Uganda and Rwanda through a mentorship based, leadership and entrepreneurship program that has significantly influenced the national curriculum and exam of Uganda and Rwanda. Recognized as an Ashoka fellow, Echoing Green fellow, and one of Forbes 30 social entrepreneurs under 30, Eric’s work is driven by a simple belief: to solve the toughest challenges facing humanity, the place to start is within the hearts and minds of the next generation.