How Data Can Help Shape Higher Education Policy


Much of the discussion about how to fix the broken higher education business model sounds a little like conversation about how best to squeeze blood out of a turnip. Where can the cuts occur? What can be delayed? What new programs can produce revenue quickly?

These are legitimate questions. They represent a defensive reaction to a looming crisis that will not be solved by moving past the lingering aftermath of the Great Recession. These questions also reflect an incremental approach that presumes that the fix to a broken business model depends upon bandaging its weakest parts.

It’s a little depressing for many higher education leaders who do not believe that the sky is falling. But many of these same leaders also understand the fundamental problems facing society like growing income inequality. These are now fueling profound anxiety among Americans, symbolized by the regrettable and divisive national political campaign rhetoric. Income inequality will not improve immediately even with an economy that is now approaching full employment.

That’s why a new report titled, “Evolving Higher Education Business Models: Leading with Data to Deliver Results,” is particularly welcome. It emerges from a TIAA Institute that highlighted a September 2015 ACE/TIAA convening of college and university presidents, provosts and chief financial officers that explored strategies to improve decision making models by focusing on finance and innovation in higher education.

Let’s start by looking at the problem.

American higher education operates under the rules of shared governance. There are three key stakeholders: administrators, faculty and trustees. Other groups also exercise influence, with the mix depending upon the culture and type of institution.

Within shared governance, there are two key issues. The first is how to define the role of each group in governance. This can lead to politics played out that can be intense and sometimes even debilitating, especially at institutions where the rules of engagement are ill defined or not respected.

The second is how best to keep power however it is defined. This can create a healthy tension among governance groups that can be good for a college or university. At its worst, however, sloppy governance standards can mire an institution in endless process discussions where who won the debate becomes more important than whether a decision was reached in a timely and efficient manner.

The root of the problem is often the failure to educate the key stakeholders properly. This becomes especially critical because only the best endowed and most insulated colleges and universities can operate today like “ a machine that runs by itself.” The broken business model now inhibiting innovation on many campuses exacerbates this problem.

The ACE/TIAA-sponsored study begins with a call to rethink American higher education’s business model. As Walter Massy, a professor emeritus at Stanford, asserts in his Foreword, the “current challenges have revealed significant flaws.”

The study looks at several issues but the real news is its emphasis on the “black box” that defines college spending. Mr. Massy argues persuasively “institutions cannot innovate effectively without knowledge of costs in relation to revenue: both historically, in terms of what they have actually done, and prospectively in terms of what they might do in the future.”

Massy asserts: “What’s needed are structural models that describe how resources are applied to particular activities in sufficient detail to allow in-depth understanding of what’s being done at what cost, and “what-if analysis” of what might be done to effect improvements.”

The report’s authors – Louis Soares, Patricia Steele, and Lindsay Wayt – make the case that “making the black box transparent and deploying the business intelligence therein are among the keys to re-imagining the academic enterprise itself.” Specifically, they argue that “a model that prioritizes granular data transparency provides stakeholders visibility into the connections between expenses, revenue, and educational outcomes.” Put in other terms, data infuses good policy decisions influenced by a transparent process with nothing to hide.

It’s a remarkably simple and telling conclusion. The authors assume, of course, that current governance supports full transparency. But there are some sticking points that must first be overcome if “networked leadership” that will guide transparency is going to work.

Education to prepare shared governance stakeholders properly will shut down older information strategies. Trustees are the least educated and seldom well informed, despite their role as the university’s financial stewards. Opening the “black box” to full transparency means rethinking what kind of information is needed.

The process will also be enlightening because faculties are seldom treated to analysis that goes beyond the use of budgets as a rationing tool. Faculty must be persuaded that a deeper knowledge of the working parts of a college’s budget is worth their investment of time.

Presidents and their senior staff may have the most difficult problem. Full disclosure will result in a healthy discussion on the right issues. But administrators will be the most at risk because they can be accused of a failure to be transparent earlier, manage efficiently and creatively, and prioritize problems when bandaging the old budget models.

The ACE/TIAA report is important. But redirecting and managing the process, expectations, and learning strategies among governing groups must match any effort to redesign a transparent business model.





















3 thoughts on “How Data Can Help Shape Higher Education Policy

  1. The study assumes that with better and more transparent management, “Old Main” will stand. This is the same argument that those who discuss “disruptive innovation” point out is a variance of how the US automotive industry reacted in the face of the Japanese cars entering the market.

    We can, as this article and the report suggests exclude the heavily endowed private, medallion, institutions in this analysis though they are affected. At the present time, recognizing the need for post secondary or further education, there are a growing number of alternatives, some of which include current institutions, others are developing within the institutions themselves. Again, as in the disruptive model, the current system will not disappear but change from its current embodiment.

    Additionally, it needs to be recognized that “Old Main” is changing its purpose both in what is being provider in bricks and mortar and what that campus experience is as the population changes. It is also changing in response to the increasing influence of ICT’s which are now more than just tacked on technologies. And it is changing with regards to all the personnel defined in the study from administration to faculty. It is also changing due to the increased impact of globalization.

    “Big Data”? The emergence of “Deep Learning”, Watson’s children now writing narrative on big data and increasingly meta analysis of narrative starts to raise serious questions as to the function of “knowledge workers” once seen as immune to the “Rise of the Robots”. ¨Unfortunately this used to be “science fiction”

    Pandora’s box has been opened, or the immortal words of Omar Khayyam’s moving hand has replaced the lofty words normally emblazoned on the frieze of “Old Main”. This report can not stuff the emergent back into the box with clever management changes. It has to be recognized that this academic world is changing, the current fiscal issues being but the largest bell in the carillon ringing out change.

  2. Interesting to note the source of these ideas apparently did not include any faculty. “It emerges from a TIAA Institute that highlighted a September 2015 ACE/TIAA convening of college and university presidents, provosts and chief financial officers that explored strategies to improve decision making models by focusing on finance and innovation in higher education.”

    • From Bruce Sterling’ Green Days in Brunei:
      The “technical elite” were errand boys. They didn’t decide how to study, what to work on, where they could be most useful, or to what end. Money decided that. Technicians were owned by the abstract ones and zeros in bankers’ microchips…. Knowledge wasn’t power…

Your comments are welcome. They must be relevant to the topic at hand and must not contain advertisements, degrade others, or violate laws or considerations of privacy. We encourage the use of your real name, but do not prohibit pseudonyms as long as you don’t impersonate a real person.