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Bullish on Private Colleges

Most adult Americans can probably recite the case against private colleges and universities at least as readily as the Pledge of Allegiance. The bill of particulars includes unchecked prices, chronic inefficiencies, uneven outcomes, lifetime tenure, arcane research, scattered authority, and aversion to change.

Outsiders are baffled by the constraints on the institutions’ leaders, the glacial rate of change, and the tortuous process for reaching decisions. The indictment also depicts the nation’s 1, 550 or so private nonprofit colleges as unresponsive to the innovations of for-profit vendors and online education. Thus, a chorus of critics has concluded that private colleges and universities have a fundamentally broken business model sustainable only by the most elite institutions. As for the rest, the bears advise, short the sector. We are contrarians, bullish on private colleges despite their many difficult challenges and widespread public discontent (57 percent of Americans do not view a college education as a good value for the price). We offer no brief for complacency; changes must occur.

Private colleges do not, however, face an existential threat. Rather, alarmists repeatedly misperceive the sector’s prospects through the familiar, but distortional, lens of business. For many decades, management experts have contended that colleges must behave like businesses in order to prosper. While this message has not changed, the cure-alls have. The steady stream of surefire “solutions” has included zero-based budgeting, management by objectives, total quality management, continuous quality improvement, business-process reengineering, strategic planning, benchmarking, and innovative business models.

All rest on the premise that a single concept can be fruitfully applied across all industries and professions without “tissue rejection.” We are skeptical of meta-theories and partial to a principle of biodiversity: different organisms (and organizations) thrive or perish under different conditions. Short-sellers incline toward inapt prescriptions for private colleges, such as radical mission makeovers, wholesale shifts to online delivery systems, and fealty to profit-oriented business models.

We believe these tactics would be as ill-advised for private colleges as adherence to academic norms would be for publicly traded corporations. To survive, let alone succeed, for-profit companies cannot play by the same rules as private colleges, and vice versa. And even though the norms of independent colleges seem odd and irksome to many, “unusual” does not mean “unsuccessful.” In fact, independent colleges are remarkably durable, stable, and adaptable. Why is that so despite the sector’s coolness to the “best practices” of business?...

To read the full story visit Harvard Magazine.