Ideas on Preparing for Digital Textbook Delivery: Lower the Cost of College Operations or Else

This article first appeared on the Akademos blog.

SONY DSCThe higher education conference season is in full effect. I attended an ed tech conference called UBTech held by University Business magazine earlier this month in Orlando, Florida. This was my first time attending UBTech, having formerly mainly focused on the CampusTech conference. UBTech had a good mix of college and university chief technology officers, chief information officers, chief financial officers, and similar roles. It also attracted ed tech companies, textbook publishers, bookstore services providers, and other organizations in the industry.

A central theme in Orlando this year was reducing college operating costs to manage net revenue. Speakers called out that the higher education business model and delivery system appears broken. Particularly at those institutions that are struggling with revenue generation. Why do we continue to push a traditional college delivery model in areas where technology is clearly positioned to disrupt (yes, it is overused, but you get the idea) business-as-usual? For my part, I spoke at a session about trends in bookstore services and textbook delivery. My session attracted a diverse mix of college CTOs, CIOs and CFOs, as well as publishers, our textbook rental partners CampusBookRentals, and some friendly competition by way of bookstore service operators like Follett and Rafter.

The data I presented contrasted how college technology officers and financial officers see the future of the college bookstore. For example, while only 18% of college business officers in our textbook delivery survey stated college bookstores will sell textbooks completely via their online store, 95% of college technology officers we (more informally) surveyed at UBTech see the future of textbooks as delivered completely in an online bookstore. Now, given we were at a tech conference, I am not surprised. But the technology folks also noted they are ‘not so much’ involved in decisions about the bookstore. Which leads me to the question, Why are our CTOs and CIOs not more involved in the selection of bookstore service operators and strategies?

I usually approach conferences as an opportunity to listen. I might come prepared with a leading question or a thesis I am trying to get feedback on. This year, it was definitely about asking how involved college CTOs and CIOs are in textbook delivery and bookstore services. But also, and perhaps more nuanced, how much do they want to be involved, to be included in the textbook dialogue?

Those that attended our UBTech session were self-selected in that they chose to attend a session about bookstore services, so with that, are telling us they want to be more involved. But overall at the conference, most tech folks I spoke with shared that they were somewhat neutral on the topic of bookstore services. But they were quick to offer that online delivery is the way to go. In my session’s group discussion, the majority of schools shared that they have brick-and-mortar components to their textbook sales process. They also said that one of the biggest drivers to building out bookstores in the future is the eventual adoption of digital texts by students and faculty. Our contemporary at Follett estimated that number at an average of 10%, while Rafter and CampusBookRenters had less information on digital text adoption, likely because the rental market focuses more on physical textbook delivery. Everyone from vendors to schools agreed that eTextbook adoption was doubling each year, though still at small numbers.

But if eBook adoption is doubling year-over-year at colleges, when eTextbooks do indeed reach the tipping point, the mass adoption of digital texts by college students will happen “fast and furiously” (to quote the keynote speaker…more on that in a minute). The colleges and universities in my session said this was one of their biggest concerns—they want to be prepared when ‘digital happens.’ So while competition by third party sites selling textbooks (such as Amazon) was a dominant concern for CFOs, digital textbook adoption was the clear driving issue for our information technology officers.

Now on to that keynote address I mentioned. The opening keynote was delivered by Gene Wade, co-founder and CEO of UniversityNow, was well received. I’d heard of UniversityNow before but didn’t really know what they did. Here is the gist:

UniversityNow identify themselves as a social venture whose mission it is to ensure that a quality higher education is available to people everywhere. They manage Patten University and New Charter University, both online institutions serving predominantly working adults and offering course delivery within a somewhat new paradigm. For example, one set of instructors teaches you, while a different set grades you (anonymously). Tuition is based on how long it takes to complete your program (typically about 2-3K a semester for as many classes as you can muster). Learning is self-paced. Exams aren’t “unlocked” until students can show within the LMS that they have mastered the skill sets needed to pass them. Classes are held completely online. Course materials are digital.

Mr. Wade shared that MOOCs have made going to school online “sexier,” but that they are not addressing the market need (eg., a call center employee who is getting left behind because he or she does not have a bachelor’s degree; and needs a convenient, affordable degree that represents key learning competencies learned). According to the speaker, UniversityNow’s flagship school, Patten University, costs 11x less than a 4-year private school. At some schools, cost of operation, of delivery, is higher than net tuition coming in. His point was that we need to lower the cost of delivery or else.

His most powerful message? That five years from now, most colleges and universities will be dealing with “the wreckage.” Schools like UniversityNow are happening (as its namesake suggests) now. His metaphor…the rest of world will go straight to cell phones while ‘old schools’ will be dealing with their outdated land-line systems. And, of course, what is that cost of that?

If college bookstore administrators want to be ready for the move to online textbook delivery, they might consider the parallels of planning for online course delivery. The MOOCs and SOOCs are indeed coming. If schools can equate online course delivery with online textbook delivery, and maybe capitalize on the popularity (and hysteria) of MOOCs in order to frame the strategies for digital textbook delivery, we think they can be well prepared to build an innovative yet practical vision for the college bookstore of the future.

The Battle for Higher Ed’s Future: Wall Street v. Academics (Point, Academics)

This article originally appeared on the Akademos Blog

NY-Times-University-of-Virginia-Cover-Story3-246x300Torn down the middle. That’s how the NY Times Magazine’s September Education Issue portrayed UVA’s campus on its cover page, along with a dramatic title: Anatomy of a Campus Coup: The inside story of the failed ouster of the University of Virginia’s president–and what it means for the future of higher education.

By now, many of us know the story of UVA president Teresa Sullivan’s forced resignation and subsequent reinstatement. In fact, it took me a few days to read the Times Magazine cover story because, well, I thought I already knew what had happened. It turns out there was still more to the soap opera, and a little bit of journalistic digging has helped uncover some lessons learned and a conspiracy theory or two. Allow me to summarize the article for you…

At the heart of the drama seemed to be philosophical differences in how to run an elite institution between those that have more of a not-for-profit/higher ed/government background and those that have more of a business/corporate/Wall Street resume. Where these two groups see the future of education heading caused a rift at UVA’s campus that likely revealed schisms happening at institutions all across the country and the world. To the UVA Board of Visitors, an appointed body that oversees the university, Ms. Sullivan was not “CEO” enough in her actions or her image. The drama played out in the media as potential sexism, political jockeying, and fiscal philosophical differences.

But put succinctly, UVA’s board did not think Ms. Sullivan was building enough long term fiscal bets into the strategic plan, such as online programming, and was most certainly not acting fast enough in experimenting with trends like MOOCs (Massive Online Open Courses) along with the MITs of the world. The board had been influenced, in addition to their MBA-ness, by Clayton M. Christensen’s book “The Innovative University,” which focuses on “disruptive innovation” in higher education. Talk to any private equity wonk and he or she will animatedly tell you how education is poised for disruption–the kind of disruption that could make someone a lot money. So why wasn’t UVA taking advantage of its brand name and keeping up with the times?

Well, let’s set the scene. UVA is considered a top ranked university, right up there with the Ivy Leagues. What sets it apart from these schools though is that UVA is a public school. So already we are not comparing apples to apples. UVA also has a smaller enrollment than many of its peer institutions. And finally, UVA is committed to keeping a higher mix of in-state students than, say, a University of Michigan (state schools typically charge out-of-state students a much higher tuition, thus those schools that have a higher percentage of in-state students cannot depend on out-of-state students to line the coffers). UVA’s president, Teresa Sullivan, has been called a technocrat, an incrementalist, a consensus builder…all those terms that read slow-moving. Some questioned whether she had the inspired spirit needed to run an institution at the presidential level (president’s are well known for helping to raise funds/endowments and acting as the face of the university).

So what does a not-for-profit-type administrator with a background in sociology bring to the table at a place like UVA? Well, we know Ms. Sullivan previously worked as the University of Michigan’s provost, and before that, conducted sociology research at the University of Texas. Her post at Michigan is supposedly one of the reasons she was hired at UVA–she knew how to work in an environment where the state budget was consistently being cut; she knew how to do more with less. While at Texas, where she was “a demographer” and a “numbers cruncher,” she worked on middle class-debt research with Elizabeth Warren, a bankruptcy law  professor who has taught at several institutions, including Harvard, has been a Special Advisor for the Consumer Financial Protection Bureau under President Obama, and overall, is considered an expert on middle-class finance policy. Ms. Warren is something of a Wall Street-watchdog, advocating for the middle class in a system she feels is “rigged,” (according to her 2012 Democratic National Convention speech delivered just before former President Bill Clinton’s). Warren is also currently running for US Senate in Massachusetts against incumbent Senator Scott Brown. I mention all this because the NY Times article referred to Warren as a “liberal icon” and touches on conspiracy theories that Teresa Sullivan was singled out because of her associations with anti-Wall Street and/or pro-middle-class fiscal policies. The Times points out that, in hindsight, this seems unlikely, though at the time, it may have fueled some of the flames. But because the Governor of Virginia is responsible for appointing the board, and he happened to be Republican, and because members of the board also happened to be some of UVA’s biggest donors, political suspicions abounded.

Many people believe the UVA board used a faculty letter as a proxy to oust Sullivan. Faculty, tired of flat salaries they considered uncompetitive, wrote a letter asking for “urgent and immediate action.” Helen Dragas, rector/leader of the board, began lobbying for support to remove Sullivan. She wrote the following to a fellow board member: “I am growing increasingly nervous that others are thinking about big trends and long term prospects for higher education delivery and funding.” She reached out to board members one-by-one, some say to avoid attracting attention (in Virginia, university board member meetings of more than two persons are public record). She then advised Virginia’s Governor McDonnell of her plans. All systems seemed to be on go for Dragas. What is ultimately interesting about this faculty letter is that the faculty of UVA joined the reinstate-Sullivan-camp after the ouster. The Times summed it up by suggesting that faculty may voice gripes, but when it comes down to it, they prefer an academic in charge over a business person.

The faculty, the students, and a former (and influential) board member, all mounted a counterattack. The Times reported that vandals had spray-painted the six front columns of the school’s neoclassical Rotunda with the letters “G-R-E-E-E-D.” And the more the board tried to tell faculty this change was a good thing, the more faculty became “paranoid” that big money donors were controlling the strings at UVA. When Sullivan gave her goodbye speech to the board, people gathered on the lawn to protest her departure. The public relations mess that followed only further riled Sullivan’s supporters. “The national news media seized onto the story, which seemed to dramatize a broader conflict between big money and public education,” according to the Times; and further, “the conservative editorial page of The Wall Street Journal accused the protesting faculty of trying to create ‘an academic Green Zone separated from economic reality,’ while liberal publications held up Sullivan as a symbol of a beleaguered egalitarian ideal.” Ms. Dragas, the leader of the board, lost many of her backers after the decision to remove Sullivan, and Governor McDonnell called on the board to figure this mess out or resign. Sullivan was reinstated as UVA’s president on June 26, 2012. And ironically, on July 17th, it was reported that UVA would participate in a MOOC initiative with Coursera via Stanford University.

So what really happened at UVA? Was it sexism in reaction to UVA’s first female president, was it a Republican conspiracy fueled by big donors and a Republican governor, was it MBA/Wall Street bravado? We may never really know. But I think it is an important lesson in public administration. As the public sector adopts the more useful fiscal practices of the private sector, we must remember that feeding the needs of a public entity is a balancing act, even more so than sustaining a corporation. While business courses try and teach leaders how to run a company that treats its employees as more than just human resources, as a part of the company as a whole, in the public sector,  the people are our shareholders. And in education, which is a Public Good, whether the school be private or public, we have an obligation to run institutions in a manner that helps our investments–the students who are our future and the faculty who are showing them the way–best flourish.

I will end on a final note that I think captures a major schism between public and private business management as related to the UVA story. A UVA board member who considers himself more an entrepreneur than a Wall Streeter provided this analysis: “This board comes predominantly from the corporate sector, and they were not used to dealing with people who have academic tenure and can say whatever they want. They are used to being able to fire people who do that.”