In the 1980s when AT&T decided to enter the cellphone market, they estimated the total number of handsets to be around 900,000 by the end of the millennium. The actual number of handsets was about 750 million.
AT&T had taken a sequestered view of the opportunity and mistook a dinosaur for a squirrel. To their delight, luck was on their side and it brought prolific profit showers. But, not everyone was this fortunate. Many others who had tabled the opportunity for some other convenient “sure thing” missed this market that grew right under their noses almost overnight. AT&T grabbed more than the lion’s share of it.
And that was just one of the varied market metamorphoses.
The century took its turn and businesses learned the hard way that meek approaches and ill-conceived plans to combat fiercely competitive and dynamic business environments don’t work anymore — forward-looking, diverse and strong choices do.
If the experiences of Circuit City, Dell and Fannie May tell us anything, it is that sticking with a single plan doesn’t save the day for most of us anymore. Strategic plans that do not account for uncertainties and changes are doomed for disaster.
The days of gradual market evolution are well past us and we are sailing through highly turbulent times. The shortage of skill is adding fuel to this fire. If businesses have failed to anticipate the present need, institutions have not even begun to understand their contribution to the chaos. In the terse space delineated by the global financial crises, institutions are shifting their weight leg-to-leg among raising costs, diminished funds, skimpy endowments, changing student demographics, political instability and increased public awareness; somehow barely managing to maintain their standing.
Institutions today are forced to meet increasing demands with shrinking resources. In addition to meeting the social responsibilities, they are expected to prepare students for newer challenges like sustainability and economic development. Talk about groundwork time; there is none. The extent of these changes is immense. It’s like 4 million years of human evolution has been closely packed and delivered in a meagre gestation period of 9 months and then hastily handed over to an unversed education system to be dealt with. The result: we are overwhelmed and bewildered.
Access and Affordability:
In 2016, the average tuition fee for elite US universities was USD 47,637 (The figure excludes room and board). In a flurry to maintain their stature, these institutions turn blind to diversity and accessibility issues that need to be immediately addressed. The demon of the 2008-2009 recession still haunts many. These institutions need to ponder the ways they are going to attract their limited elite learners should the nightmare re-appear.
Shrinking Government Support:
Funding for the research works is at historical lows. This poses a grave threat to support of innovation. Fewer US dollars are available for grants now. Institutions are forced to either cut down their resource allocation in other areas or limit the research they are invested in. Costs to conduct these researches are also getting astronomical.
Community threats and opportunities:
Many reputed institutions are self-assured about their infrastructure placement at favorable geographic locations which brings a competitive advantage to them. One senior leader at Georgetown University consented that the university wouldn’t have enjoyed the same status if it was not located in Washington D.C., the Mecca of the World Bank, IMF and other funding giants. While location can bring advantages and visibility, the cost for hiring and retaining staff could be a major challenge. Inflow of thousands of 18-21 year olds can significantly change the local demography.
Both affluent and poor institutions are equally concerned about their resource constraints. Contemporary IT infrastructure and compliance spending can drain colleges of valuable strategic investments.
There has been a growing emphasis on the perfect mix of in-class and out-of-class experiential learning. While benefits of experiential learning are uncontended, these methods come with additional costs.
Changing social fabric:
Growing public scrutiny is driving institutions to focus on issues surrounding sexual assaults and mental health. Conversations around race and freedom of expression have made their way to the table and cannot be oversighted anymore.
Proponents of education reforms have been pushing neoliberalism that advocates structuring institutions in a way such that they function like private, market-aligned bodies. But this too has worked as an impediment as it gives institutions a free-hand on making profits out of education. The social obligation of the education system cannot be discounted.
Efficiency and economy have appeared as two prominent roadblocks for forward-looking institutions. Mergers can address this predicament. Options are multitudinous— from shared services to shared resources, co-branding, campuses, partnerships and affiliations. In an environment driven by a “bigger is better” perception, institutes can significantly benefit from associations with other establishments; the benefits can range from improved growth and impact, better economies of scale, improved competitiveness and greater efficiency. Conversely, additional costs such as those for communications, stakeholder relationships and rebranding should be considered.
It is recommended that interested institutions ponder on the opportunity costs, short term vs. long term gains, added human resource investments and political investments.
The right kind of strategic planning will not take the future as a prediction. Rather, it will build the future block by block. Growth won’t come as a shock but rather an expected outcome of a well-defined process. But that’s a utopia for us as of now.While disruptive technologies have vigorously shaken the external business market, they are yet to disrupt the ways that we think and operate.
Those who have managed to pave the way forward have shown us that an unemotional look at the present threats and an active grasp of emerging opportunities is imperative for growth. However, our afflictions to our own past ways and achievements, our habits to think and perform in a certain way and our apprehension of the future technology can prove to be major barriers.
While mergers can act as a quick-fix to the imposing issues, strategists need to devote a substantial amount of time in contemplating uncertainties to find the sustainable course ahead — One that brings industry and education on the same level of reciprocity and evolution.
Until then our only choice is to keep stumbling forward.