The Business of Education (Part 1)
Conversations about the Ontario College system's current crisis often devolve into negativity, with many expressing that the colleges wouldn't be in this predicament if they weren't run like businesses. While understandable, this sentiment overlooks the potential benefits of effective business practices. If colleges strategically and methodically apply proven business concepts, the current crisis could have been avoided or mitigated as simply a short-term adjustment to a rapidly changing market.
This article explores areas where changes in college business operations could foster a sustainable applied learning system for Ontario.
Shareholders: Redefining Ownership and Value
The Ontario college system's constituents encompass a wide range of individuals and entities who have a vested interest in its success. These groups include students, staff, faculty, businesses, communities, and governments. Each plays a crucial role in the college's ecosystem and contributes to its overall value. However, the Provincial government is the sole shareholder, controlling funding, tuition, legislation, governance, and operational aspects through ministerial mandates. This reality has significantly contributed to the current crisis by limiting the influence of other constituents and centralizing decision-making power.
While changing this structure is challenging, college executives can redefine their operational approach by broadening the concept of shareholder value. Instead of focusing solely on the one shareholder (Provincial government) and one goal (wealth) colleges can prioritize sustainable returns to the many owners over time. This perspective recognizes that the true owners are the groups the college serves: local and regional communities, business and industry, students, and government.
By adopting this perspective, colleges can shift their governance, strategy, and execution to better reflect a multiple constituent shareholder value model versus a single shareholder wealth model. This change would foster greater accountability for long-term decision-making that benefits the communities they serve, potentially preventing or mitigating harm caused by short-term decisions. It would also encourage colleges to actively engage with their constituents, seek their input, consider their needs when making strategic decisions, and be more accountable to owners and not customers.
Competition: Navigating Internal and External Challenges
The Ontario college system faces intense competition from various sources. Internally, colleges compete with each other for students, funding, and resources. They also face competition from provincial universities, which often offer similar programs and attract a similar pool of applicants. Additionally, private career colleges and trade unions offer vocational training and compete with colleges for students seeking specific skills and certifications. This internal competition, exacerbated by government policy and funding mechanisms, necessitates bold and courageous leadership to realign the system and address the internal competition challenges effectively. The level of internal competition in the system overwhelms the normal benefits of competition in a marketplace thereby negatively impacting all internal competitors and benefiting external competitors.
Reducing internal competition requires a strategic and system approach to the roles of trade unions and private career colleges in applied learning delivery. The goal is not to eliminate these providers but to ensure their competition with colleges benefits students and communities. This can be achieved through collaboration and partnerships, where colleges and other providers work together to create a more cohesive and comprehensive applied learning system. For example, colleges could partner with trade unions or private career colleges to meet the needs for depth and breadth of applied learning in a region.
Vertical integration, where colleges and universities expand programming into each other's traditional domains, also requires attention. While vertical integration can offer value by creating pathways for students to transition between college and university programs, the current approach of independent pursuit by each institution is unsustainable. A system-level approach, fostering regional partnerships and innovative collaborations, can create successful pathways for students throughout the province's education system, including private career colleges. This would require colleges and universities to work together to align their programs, create transfer credit agreements, and develop joint initiatives that benefit students and the broader community. There are many examples of successful pathways within the system but they are often institution by institution and not system level pathways. This limitation makes it very difficult for students to navigate or to stay within their region to achieve their educational goals. For example, a student could finish a two-year diploma, then earn a degree at a European university in one year and an honours degree in two, with a clear path to graduate studies. But that same student in Ontario might, at best, receive one year of transfer credit only to select universities in the province, and for many diplomas there are no pathway opportunities within the Province. Furthermore, a student transferring between colleges may not have all their credits transferred to another college in the Province, even to the same program. If students were treated like shareholders, the system would be built to allow them to move easily and clearly within the province's education system, including private career colleges.
Product: Balancing Flexibility and Quality
The approach to creating new programs in the college system involves both institutional and system-wide processes. A prevailing philosophy of providing hyper-flexible delivery options to cater to student preferences may not always align with the best interests of students and communities. While flexibility is desirable, the core components of applied learning—hands-on experiences, instructor-led learning, and community engagement—must be preserved and I would argue enhanced. Colleges in the system are all pursuing this flexibility philosophy individually and with mixed results.
A balanced approach is needed, where flexibility is strategically incorporated into specific program components while maintaining the quality and integrity of the overall learning experience. It is essential to ensure that these flexible options do not compromise the quality of the learning experience or the core components of applied learning. For instance, while online learning can offer convenience and accessibility, it is important to ensure that students have significant opportunities for hands-on experiences and interaction with instructors and peers. When we view the shareholder as our community, the goal is to train and educate students so that they can contribute to the economic and social prosperity of the community where they live and work. This training and education must have their key components delivered in our communities, with our communities, and by experts living in our communities.
Sales: Optimizing the Enrollment Process
During my tenure as Associate Dean of the School of Business, I observed a couple of recurring issues that hindered the college's ability to finalize enrollment and retain students.
Firstly, despite the considerable effort and resources invested in recruiting and admitting students, there was a significant delay between the offer of enrollment and the start of classes or the requirement for fee payment. This delay often led to students changing their minds about attending, particularly among non-traditional students for whom the lag between decision and enrollment presented a barrier. While high school students were generally unaffected due to the alignment of their academic calendars, this delay posed a significant challenge for non-traditional learners.
Secondly, returning students who wished to get ahead in their studies during summer months by taking out-of-cycle courses faced additional fees. This created a financial barrier for students who were trying to manage their academic workload and progress through their program with success.
From a sales perspective, these issues represent missed opportunities to reduce enrollment attrition and enhance the student experience. Unlike for-profit businesses that typically provide goods or services and collect payment promptly, the college system often experiences a significant lag between the "sale" (enrollment offer) and the "delivery" (course commencement or fee payment). While some colleges have implemented tri-semester intakes to address this, program size limitations prevent widespread adoption.
To address these challenges, I propose the systems wide creation of selected hyper-flexible courses that are accessible to newly admitted students upon payment of a deposit for their upcoming full-time semester. This would allow students to start working towards their academic goals sooner, reducing attrition due to delays. These courses should not incur additional fees beyond regular tuition. The same concept could be applied to returning students who want to take summer courses to get ahead in their studies.
By adopting a more proactive and student-centric approach, colleges can improve enrollment rates, enhance student satisfaction, and ultimately deliver greater value to their "shareholders" – the students themselves.
Pricing: Re-imagining Tuition Models
While the Provincial government heavily dictates tuition fees, colleges can explore innovative approaches to tuition charging and collection. While free tuition, as implemented successfully in many jurisdictions, may not be feasible in Ontario, other options can support student and community needs (to be clear a free tuition public service model of applied learning is my preference in the system).
Income sharing models or voluntary taxes can defer tuition payment until after graduation, removing upfront financial barriers for students. In these models, students agree to pay a percentage of their income for a set period of time after graduation to cover their tuition and possibly other educational related costs. Incoming sharing models could be collaborations with local financial institutions and also be rolled into other types of registered savings plans for education, housing, or retirement after tuition is paid. Deferred tuition plans, where students can choose to defer a portion of their tuition to a set time after graduation, offer additional flexibility. These options can be made available to all students regardless of their current financial status and allow for student autonomy in making their educational choices.
Another potential option is to reconsider the time constraints of tuition payments. Currently, tuition is paid to cover a specific semester and number of courses. This approach benefits the college but can disadvantage the student. To address this, tuition models could incentivize student success and retention by removing or extending the time and course constraints. Students could pay a fee for a certain amount of course content and take the courses at their own pace (depending on availability). They would know the upfront tuition costs for their entire program and have flexible payment options for those costs. There could still be a time limit for completion related to program of study changes (e.g., 200% of the expected time). The model could also include a pre-payment option for course failure insurance, which would lock in the price for repeating failed courses.
A final option that colleges could consider related to pricing/tuition is to incentivize success. Students that successfully complete their program in the expected time or with a certain level of demonstrated competency can receive tuition reduction for future semesters or a tuition refund upon graduation. Again this concept is putting the student shareholder value at the forefront. Retention and graduation rate improvement is a source of continued funding for the college.
Conclusion
Redefining and re-centering the concept of shareholders in the college system is crucial for building a sustainable and durable applied learning system for Ontario. By adopting bold and courageous leadership, embracing innovative business practices, and prioritizing the needs of students and communities, colleges can navigate the current crisis and create a brighter future for applied education in the Province. This requires a shift in mindset from a purely government-centric and institutional-centric approach to a more collaborative and inclusive model that recognizes the value of individuals, communities, and systems. By working together, colleges, government, business, and communities can create a more responsive, adaptable, and sustainable college system that meets the needs of students and the economy for years to come. Business models and the creation of proper incentives aligned to shareholder value are the most efficient way to build this new future. This will require ongoing dialogue, experimentation, and a willingness to challenge the status quo, but the potential benefits for students, communities, and the province as a whole are significant.
