Dartblog

The on-line version of the Bain & Co. study that we looked at yesterday, The Financially Sustainable University, has a number of videos that amplify points made in the text. One describes what Bain calls the Law of More (a wink at Moore’s Law) in university strategic planning. The text begins by detailing the law:

Bain consultant Jeff Denneen then extends the description in a video as follows:

“The Law of More is such an interesting dynamic in higher education. You go out there and you look at universities and their strategic plans, and you talk to leaders about what they are trying to accomplish: it’s all about getting up to the next level. Everyone wants to get into that next aspirational peer group, and so they keep investing and investing and investing. It’s just this incredible dynamic of keeping up with the Joneses.

And when you go and start looking at the data, you can see interest expense going up, debt loads going up, property plant and equipment going up. The balance sheets are getting really burdened by all these investments. You are not seeing the same growth in cost of instruction and in other things that are really, truly about teaching and knowledge creation. And so, as you look at that fundamental dynamic, you have to start to say, what value is being created for those investments? I see tuition going up dramatically — three times the consumer price index over the past 30 years.

So what more is coming out of it? We’re investing a lot of money. We’re charging students a lot more to attend. What incremental value is being provided to students? I don’t know the answer to that question. But would you say that having a college education today gives you that leg up, that much more, than having a college education did ten years ago or twenty years ago?

I’m not so sure I’d say that. I really don’t think that we’re delivering a lot more to students today than we did. The fundamental model hasn’t changed that much.

And so what we have gotten ourselves into is this vicious cycle of throwing money after initiatives to try and get to that next level of peer recognition, when in fact, what we really ought to be doing is thinking about, for each institution, what do they do that is so much better that everybody else, because there is something. Every institution is unique and differentiated. Put your resources against that. Figure out how you create value for your students and your stakeholders. And worry about those things, and stop worrying about what everybody else is doing.” [Emphasis added]

No more succinct description of the Dartmouth’s administration’s weak-minded policies is to be found, and no better prescription for our future is available either.