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Don't ask me no questions, and I won't tell you no lies
183 Plays7 months ago
In three stories that we have discussed lately - the UAGC ongoing fiasco, the University of Phoenix sales process, and Project Kitty Hawk board reports - there seems to be a common theme. Namely, that governance issues are creating a lot of the risk, when governance should be used to manage risk. What is happening around governance in these three examples, and why are we seeing this common theme across high-profile online initiatives? What does this say about higher ed culture and its ability to navigate change?
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Transcript
Introduction and Focus on Governance in Online Education
00:00:12
Speaker
Hello and welcome back to Online Education Across the Atlantic. It's great to be here with my colleagues, Neil Mosley and Glenda Morgan.
00:00:21
Speaker
And today our big topic is getting into that highly sexy and interesting topic of governance. But the reason we want to get into this is the fact that some of the highest profile online education initiatives that people are talking about and it's got an impact, particularly in terms of numbers.
00:00:40
Speaker
are really boiling down to governance issues.
Key Governance Challenges and Examples
00:00:44
Speaker
University of Arizona Global Campus or UAGC, the University of Phoenix trying to be sold, Project Kitty Hawk out of the UNC system. So we wanted to, after last week's discussion, we wanted to take a deeper dive into this topic and see where it leads us and get some thoughts on how that relates to online learning.
00:01:05
Speaker
But before we do that, we'd love to get into some of the hot news items and we'll start out with one that actually is an ongoing story as every week, if not twice a week, we're hearing a new disaster with the FAFSA rollout in the U.S.
FAFSA Issues and Implications for Students
00:01:25
Speaker
And this time they're having to reprocess, let's see, 320,000 forms. And this is on the heels of having to do a previous error. And it's just an ongoing disaster. What I don't think people are talking about, however, and I don't think schools are grasping as too many schools in the US are viewing this as, like I think they said, 2.6 million.
00:01:50
Speaker
fewer applications for financial aid than in the previous year and they're trying to whittle that down and of that 600,000 are first-time students so it's critical like will you get these students in enrolled into colleges and universities
00:02:06
Speaker
I think too many schools are talking about the fact of how can we catch up? How can we do heroics? How can we process and make as much of an issue as we can without thinking, what's gonna happen with student behavior? If I'm a student, am I gonna lose faith and education? It's like, even if you process my forum, I'm outta here. You took too long, I had to make decisions. And so you delaying my deadline to June,
00:02:32
Speaker
that's great for you but I've chosen to do something else instead of going to school but that's a bad one and I'm not sure I mean if you guys are tracking this or if you have views on how bad is this going to be from a long-term enrollment perspective as opposed to just a 2024 disastrous rollout issue.
00:02:54
Speaker
I think it's gonna be bad because it's like one thing on top of the other.
International Resonance and IT Governance
00:02:58
Speaker
There was COVID which did some harm by itself in terms of people's experience of college and then the sort of constant drumbeat of bad news undermining the importance of higher education and then this on top of things I think is just gonna make matters worse. And particularly at the students who are perhaps
00:03:24
Speaker
on the on the edge in terms of trying to decide whether to go to university or not. Yeah it's going to be tough and Neil I don't know how closely you've been following this story or if you think this isn't important from a non-US perspective. I mean I think
00:03:42
Speaker
I think it's one of those things where we probably share the same sense of threat to higher education or perceptions of higher education's kind of value. And these are the sort of things that really mustn't go wrong in that climate. I mean, they just add insult to injury, really. So I guess it doesn't impact the UK directly.
00:04:07
Speaker
But yeah, I think the lesson for those involved in higher education, I guess at the moment is, you know, don't screw up things like this because you're already in a particularly tricky position. That's what I take away from it.
00:04:24
Speaker
Well, it's almost like a book club assignment for Morgan for me, because she's got me reading, excuse me, recoding America, a book that she's referenced a couple of times. And it's going over government programs where there have been disastrous IT rollouts that impact policy. I mean, there's a lot more to the book, but it's sort of interesting reading that book while you keep seeing the FAFSA news come out every week. It's like a book study or book club.
00:04:54
Speaker
Just in terms of a UK connection, I remember a few years ago one of the LMS companies rolled out an update to the LMS and it had to be withdrawn or recalled and then they rescheduled it during Clearing Week and they were not popular.
00:05:18
Speaker
Yeah. Yeah, that sounds familiar. I mean, yeah, I think I'm sure through the years we've got plenty of parallel kind of experiences of disastrous I.T. rollouts and things like that. Certainly we have in the kind of government sphere as well. I don't know if you guys have followed the post office story over here, but oh, yeah, it's just kind of absolutely disastrous. So I think, yeah, there's there's so much writing material for I.T. rollout disasters that they should be a few volumes of that, but probably organ.
LMS Market Trends and Blackboard's Struggles
00:05:48
Speaker
And I find myself torn because like, you know, I, I understand how hard it is to roll things out in a smooth way, especially given the context of government where they're so constrained by certain kinds of things. But at the same time, I remember reading Richard not remember but yesterday I read Richard Cordray's tweet about
00:06:09
Speaker
He wrote a blog post and it's like, man, you know, less blogging, more fixing. Well, my, actually, uh, I ended up doing, and it's indirectly what got me into ed tech. I did a project recovery for a company. I got hired for this big e-commerce project. It was completely broken down and it actually parallels a lot of the arguments from the book. Essentially I went in and said, you've got a, yeah, we just have to break the waterfall mentality.
00:06:39
Speaker
And we have to go to an agile development approach. And I need to have people on the team, QA, talking to developers, got the whole thing out there and ended up succeeding. But as soon as it succeeded, the reaction of the company was, oh, good. Thank you. Now we can go back to doing the business the way we wanted to. And all developers work in a separate group that don't talk to QA.
00:07:04
Speaker
So there's a lot of parallels, I'm saying. Sorry, thank you for the book recommendation. So I was going to pick up on the LMS as another segue into a news item. The LMS market is not dead yet. It's still fighting. And Neil, you had mentioned that there was a pretty big LMS selection over on your side of the pond.
00:07:26
Speaker
Yeah, so the University of Manchester have selected Canvas as their new VLE. I guess it's kind of notable for a couple of different reasons. You know, University of Manchester is one of the biggest universities over here, has a huge amount of students. And so, you know,
00:07:44
Speaker
whilst you kind of see VLE changes from other universities to kind of have less students. This is kind of notable because this is a prestigious Russell group and a lot of students. So it was kind of on the cards for a little while, maybe took a little while to announce. So it's a notable win for the prestige and the kind of standing of the institution. It follows on from what we've all observed in terms of Canvas
00:08:07
Speaker
canvas-winning business and the VLE that they're replacing is Blackboard. So again, it kind of reinforces the trend of them losing business, unfortunately, for them. So yeah, so notable news and notable, I guess, as well, because they seem to have acquired a whole suite of different Instructure products as well. And I think that
00:08:29
Speaker
You know, I don't know for sure but I suspect that might have been one of the reasons as well. I know that Manchester has a flexible learning strategy and like other universities over here is looking around lifelong learning with the funding changes coming up. So, you know, some of those aspects of the suite I think speak to that trajectory and no doubt kind of stood in structure in good stead when they were kind of
00:08:55
Speaker
looking to to kind of get this business so yeah yeah then as you say the VLE market is still is still alive and kicking. Just to be clear this is the University of Manchester not the not the University of Greater Manchester.
00:09:09
Speaker
Ah Morgan, Morgan. For the US listeners we have a university called the University of Bolton which is quite near to Manchester and it has requested that it have its name changed to the University of Greater Manchester which has caused much controversy given that there are already a couple of universities with the name Manchester in the title.
00:09:30
Speaker
So yes, this is the University of Manchester and not the University of Greater Manchester. Thank you for clarifying that, Morgan. We almost had our own little issue in terms of the women's final four for basketball, because we almost had USC and USC in there. And they've had fights in the past about who gets to be called USC, South Carolina or
00:09:51
Speaker
Southern California. And I think South Carolina actually predates Southern California by some period of time. Yeah. But not by name recognition, though. I mean, in context of what we're going to be talking about later, this is this is as kind of controversial as it gets in the UK at the moment, a name change. Yeah, that's kind of how we how we roll over here. Yeah.
00:10:13
Speaker
On the LMS side, boy, I mean, there's nothing new in terms of Blackboard losing clients. I think all three of us have written about the general trend is Canvas and D2L.
00:10:29
Speaker
Winning clients away from blackboard and Moodle and that just keeps going but boy There's so many big losses that blackboards had or anthology has had of its largest clients I mean, it's got to be taken a bigger financial toll and I know they've had problems with some debt servicing so they've had some corporate challenges as well and I
00:10:52
Speaker
makes me concerned about them on the financial steps. Yeah. Yeah. And if you look at the spread of the VLE market in the UK, you know, Blackboard, their predominant clients are universities in the kind of echelons of Manchester, the kind of bigger, most prestigious university. So they don't have a spread market share across institutions of different sizes in the same way that some others do. So, you know, it's worrying from that point of view as well.
00:11:22
Speaker
Yeah, I noticed in one of their recent releases, they were really promoting adoption of Ultra at the University of Leeds. And we can have our usual period here of berating Margaret for... Yeah, we're skipping Neil. We're not berating Neil anymore. Now we're directly appealing to Margaret to set up that conference.
00:11:43
Speaker
Yeah well just just to kind of move away from Margaret getting flat there's quite a lot of universities that are at different stages of moving to ultra at the moment in the UK that has occupied the attention of quite a lot of people across that space and I think I've said before around that sense of I feel like that that shift has maybe helped Blackboard in the sense of you know I've seen the kind of
00:12:07
Speaker
publicity or kind of press that's come out internally around universities around this kind of thing. We're moving to a new VLE when they may already be on Blackboard, which is an interesting way of framing it. Well, they definitely have a more of a focus now on Learn Ultra, a consistent message and focus, and I do think that's helping.
00:12:24
Speaker
And actually one of the things I have to do right off to this podcast is write a blog post about their February update. And they have a chart in there where they compare the number of new features in Blackboard compared to D2L and Canvas. And it's almost double, but it's interesting to see where that will go.
Leadership Changes and Crises in Higher Education
00:12:49
Speaker
Well, one final note before we get into our main topic, and it's sad to hear, but news came out yesterday that Rachel Romer, who's a founder and CEO, a co-founder and CEO of Guild Education, or Guild now,
00:13:03
Speaker
that she had a stroke back in August and she's in recovery. It's an interesting case, if you read the article, because she's actually unlike a lot of stroke victims, she's maintained her intelligence and ability to speak, but physically she can't move, but she's focusing on recovery and has stepped down as CEO. So the longtime Chief Experience Officer
00:13:29
Speaker
is taking over as CEO. So certainly wish her the best with her recovery on this. So on to our fun topic, which is governance. And I mentioned that there are really three key stories that are coming down as a big issue that really point to governance. The University, UAGC, is one of the latest. And it's an ongoing saga. There are new turns every week. So just as a recap,
00:13:58
Speaker
University of Arizona bought Ashford University for-profit university system, but they maintained Zovio, the parent company, as an OPM. Then the Department of Ed said we're not going to allow that, so eventually University of Arizona decided to absorb UAGC without any OPM relationship into the main campus.
00:14:21
Speaker
that a big step was it came out I think last fall if that's right Morgan about the budgetary crisis came out in the October time frame for the school. Yeah.
00:14:31
Speaker
And essentially they had changed budgeting models, and this is overall the whole university, but it turned out they had not, it wasn't so much a massive deficit. They were running deficits, but the bigger issue is because of it, they had run afoul of state laws in terms of days cash on hand, an accounting measure. So it's triggered an accounting crisis, which is looking towards broad-based cuts at the university.
00:14:59
Speaker
And then there's a question is, is the UAGC acquisition making that worse? And the leadership of the school has been saying, oh, no, it's actually been a net benefit. But the more we keep hearing, the fact that they chose to purchase UAGC is a big issue. It's putting the expenses on their books, which drops the day's cash on hand. But the most recent stuff that's come out is where the president of the university
00:15:28
Speaker
has been confronted about with two items. One is, did you know about the reputational risk of buying, creating UAGC? Because Ashford lost a California lawsuit from their attorney general on marketing practices. And there was a 20 some million, $23 million fine attached to that. And the question was, does that get shifted over to the University of Arizona?
00:15:58
Speaker
But even beyond there, the Department of Education is saying we're doing, for students who are defrauded, their term, we're going to go after $72 million to recoup the funds because we're forgiving the student debt. And you can't go after Zovio, they're out of business. And so the Department of Ed has announced they're going to attempt to recoup some of that money from the University of Arizona, which will make the problem much worse.
00:16:27
Speaker
And the president, uh, president Robbins has claimed he did, was not aware of any of that risk, which I believe there's direct evidence of people advising them on this reputational risk. So it gets down into being deceptive at best. And then you also have the board of regents that should be providing oversight and they're getting entangled in it to the point where the chair of the board had to resign.
00:16:54
Speaker
Well, he didn't resign. He stepped down his chair, but he's still on the board of regents. Um, and they fired the CFO, but not really of the university because she's still making a 500,000 plus salary and whatever position she did maintain.
00:17:11
Speaker
And then now President Robbins has come out saying, I'm going to step down because of this mess. But what stepping down means is at the end of his term of mid-2026, he said he will step down by the end of his term. And so it really raises this whole, there's a massive governance crisis going on around this and it's become
00:17:35
Speaker
tied up with the entire university. So it's been quite a soap opera, which to me has been fascinating because UAGC has its own online issues, but the governance of the situation has become the headline issue. And my argument is the fact that they're not even honestly dealing with a situation. They're just trying to cover themselves and make excuses. And when they say we're being held accountable,
00:18:01
Speaker
You're finding things such as, oh, I'm fired, but I still make the same salaries before. So there is no accountability, and there is no governance that's really getting applied. So that's the first big story that's happening right there. So I know you know this stuff in detail, Morgan. Any of the key items that I've missed there in this ad story?
00:18:24
Speaker
No, I mean, I think that covers it quite well, you know, and then the one thing you missed is that they moved the the executive director of the Board of Regents in to be the CFO of the institution. So he's acting as CFO and he's also stepped down from the Board of Regents finally. But it took a while. It took a sternly. I know you make fun of the the sternly worded emails or letters from the governor, but, you know, did take a sternly worded letter from the governor to actually
00:18:53
Speaker
get that much as far. The other sort of thing, and I don't know if I'm talking too much inside baseball here, but apparently, you know, the Faculty Senate is not tremendously functional there. And that maybe is a redundancy, because I'm not sure Faculty Senates are that functional anywhere, which is part of the problem with governance. I remember
00:19:19
Speaker
years ago when I was at grad school, Mansur Olson, who was the father of the theory of collective action, he came to speak at my graduate school and Eric Lawrence, who is now a professor of political science at George Washington University, rushed into the common room and said, oh my god, nobody's going to come to the talk because everybody thinks everybody else is going, which was like, well played, Eric. That was a good one. But everybody leaves governance to somebody else because it's tiring and
00:19:48
Speaker
and messy and things. So I think, you know, we're seeing a tax on governance in part because it's non-functional, but I'm getting off the topic here. So back to the update.
Governance Failures and Decision-Making Pitfalls at UAGC
00:19:59
Speaker
Can I butt in? And I'm interested, and then maybe jump in the gun here Phil, so tell me off if so. But is your impression that this may have been a good, more of a good faith purchase that suddenly
00:20:18
Speaker
all of the issues wrapped up in the purchase came to light. And it's almost like a faulty towers situation where, you know, things just get worse and worse and worse as you basically handle it, you know, badly. Like, you know, maybe you don't know that, but I'm just interested in whether this, I suppose in a way started in, started with a slightly better motives than it appears. And, you know, things just unravel from there.
00:20:42
Speaker
Better motives in terms of, hey, let's reach non-traditional students. That's the best I can do. But good faith? No, absolutely not. I was highly critical during the acquisition process where they were ignoring all advice of, hey, for example, the enrollment was dropping for a long time at Ashford University.
00:21:07
Speaker
Well, it takes investment and time to turn out around enrollment. Well, the way they were presenting the story is, oh, this is not going to be a problem. We won't have to spend any money here. Basically, every step of the way, once the news became public, was the decision makers behind the purchase were treating any amount of questioning or pushback. They would treat it as a bad faith attack on them.
00:21:37
Speaker
as opposed to ever listening to it saying, huh, that's a good point, we do need to consider that. That was the core of the problem, if you ask me. So one, they didn't do a lot of due diligence, and two, whenever there was any adverse opinion voiced, even in a very measured kind of way, like some of the letters that were written by people at Arizona that was treated as an attack.
00:22:03
Speaker
Yeah, well, I guess that speaks to the culture right there, isn't it, in terms of the problem. If your immediate reaction to any kind of critique is to go on the defensive, then you're going to have problems in the long run, ultimately. So rather than faulty towers, this is more of a we hit bottom and kept digging kind of situation. OK.
00:22:23
Speaker
Okay.
University Acquisitions and Financial Risks
00:22:24
Speaker
So let's bring in the other two stories and then talk about it more broadly. University of Phoenix, obviously the most well-known for-profit university. They used to dominate online learning in the U.S. They've dropped enrollment from the 400,000 down to about 85,000. But in the meantime, and they've been taken private, they've been working to get acquired by a nonprofit university for at least two years.
00:22:52
Speaker
for multiple reasons. They think it's important for them. The schools looking to acquire them think it's important because it gives them a step function of a massive presence in the online space just by one fell swoop of an acquisition. The current attempt is the University of Idaho and they're deep into the negotiations and they were supposed to complete the deal by this month, by April.
00:23:17
Speaker
But part of what's happening, there's been a lot of pushback, including in the Idaho legislature. And again, it's did you do do diligence on this? And the claim is, oh, we looked at all the downsides, but the big one that impacts me, the purchase is not for a lot of money, but there's a six hundred and eighty five million dollar bond.
00:23:43
Speaker
that they're creating a nonprofit group to do the acquisition that's wholly controlled by the University of Idaho. They're taking out $685 million of debt as part of the acquisition. And they have in the contract that the maximum liability for the debt payments, if things go south, is I think $10 million a year.
00:24:07
Speaker
So they're presenting it as that's our maximum risk here. So it's a low risk acquisition. Well, you're now finally getting people, including lawyers within the state saying, Hey, that's not true. If you're fully acquiring an asset and taking out debt owned by this nonprofit bond holders are not going to simply say, if, if the finances don't work out, they're not going to say,
00:24:33
Speaker
Oh, the nonprofit can't pay us, but I see you two have a contract that says we won't take liability. So we'll leave you alone and we'll lose hundreds of millions ourselves. No big deal. That's not what's going to happen. People are now doing true legal analysis, saying, no, you're liable for the whole amount of the debt.
00:24:53
Speaker
if the acquisition doesn't pan out financially. So yes, the University of Idaho is assuming large liabilities and debt risk if things don't work out. And part of what's happening is the president of the Idaho system is denying that saying, oh, no, we're clever. We did the negotiation. We're not doing it. And over this question of did you truly evaluate the risk of the acquisition?
00:25:23
Speaker
It's now getting people within the legislature saying, Hey, is this even legal to say that the University of Idaho can create a nonprofit and make this type of acquisition without going through the legislature at all? And several days ago, the Senate rejected a bill that would have fixed that issue. So as it appears today, there's a low likelihood that the acquisition is actually going to go through.
00:25:52
Speaker
And the thing that's ironic to me is University of Phoenix has actually turned around. Their enrollments are going up. Their finances are solid. They're actually making money. But what's torpedoing the deal again is governance and people saying, wait, you're not being honest. You didn't do due diligence. Anybody who criticizes you, you're saying it's bad faith. And now the deal may be dead because
00:26:20
Speaker
of this poor governance, and it's remarkably similar to UAGC. Well, there are some aspects that are very similar. I think that this one, to your question, Neil, I think that the Idaho was much more in the good faith acquisition. They did have some good rationale behind it. They were buying a property that has turned around, but now that people are pushing back on this risk issue,
00:26:48
Speaker
Now they're doing the faulty towers around that. So I think those are the differences there. But again, it comes down to governance. Any thoughts on this one before we mentioned the final one and then the broader topic? Just, you know, prior to this, to the sale or the attempted sale to Idaho, they had tried to
00:27:09
Speaker
there was an effort to buy it by the University of Arkansas, which eventually Arkansas rejected. And also we just recently learned that there had been an effort to sell it to Tuskegee University, a traditional, historically black university that also got rejected in part because they actually got some expert opinion who knew a little bit. Yeah. Yeah. So it's not their first attempt.
00:27:34
Speaker
Yeah, I was just going to say that maybe this is just nature of where we are, but the risks of these deals are very clearly in focus. But what I'm not really getting is the sense of
00:27:49
Speaker
the opportunity around these deals. And maybe there isn't, and maybe it was just a bad move all around. But I suppose what I'm interested in is, what was the potential?
Motivations and Dynamics in University Acquisitions
00:28:04
Speaker
What was the pot of gold at the end of the rainbow in terms of these deals, if you can put it like that?
00:28:12
Speaker
Well, Idaho, the way they're touting it is that there have not been a big player in the online space. They're demographically, they know their student, natural student population is going down. So there's going to be some really tough choices with the public universities there coming up. So part of this is now
00:28:33
Speaker
Not just we're going online, but we now are naturally expanding who we serve and it's going to not cover up, but it's going to, we have different students who are available in the future than were in the past. And so this gets us out of the slow process of adapting and leap frogs it. So I think that's the Idaho is claimed it that way. Arizona,
00:28:57
Speaker
their claim was partially financial. We have budget problems already, and this purchase is we're going to be able to take money from the deal and help the main campus university. I know that's a cynical view, but Morgan, how would you describe the upside of UAGC? I mean, I would argue that
00:29:18
Speaker
higher education, public higher education in Arizona has been under some severe financial stress. And in a way, Arizona State has dealt with that by growing their online population quite enormously to the point where it really is a contributor to the financial wellbeing. And suddenly Arizona woke up to this fact and it's like, hold on, they've figured out a way to let's do the same sort of thing. Certainly, I remember watching some of the Senate
00:29:48
Speaker
presentations around this issue early on, like right after the decision had been made. And it was really palpably clear at that point that Arizona was haunted by Arizona State and their success in the space. So I think that was very much a thing. I'm actually brewing a blog post about this sort of decision making in higher ed. And I think one of the things
00:30:16
Speaker
explaining some of these decisions is that people think about new money differently than they think about constant money. One of my colleagues back at my old job used to explain this to me. She'd come out of manufacturing, but she said, people think about new money differently. Like, you know, you make a perhaps a more rational decision
00:30:35
Speaker
in terms of your regular budget, but if it's new money, hey, let's grab it. And I think they sort of suspended some of their judgment because it's seen as new money. And I think a lot of OPM stuff sometimes is subject to that.
00:30:49
Speaker
One thing that would be just as interesting as you're saying that, well, UAGC, they should have targeted University of Phoenix because since finances, what's a big part of why they acquired it? Phoenix is turned around and is actually making money whereas Ashford was on the decline or is on the decline. So there's an argument they bought the wrong company.
00:31:12
Speaker
Yes, no, absolutely. I think that's absolutely true. I wonder how much they targeted things or whether they were just sitting back and Ashford actually came to them and said, hey, buy us, you know, and Ashford got in before Phoenix because I don't get a sense that they were masters of their own destiny here. I think they were.
00:31:31
Speaker
I think you're right. In the emails that came out of the Arizona Republic article definitely painted that picture of the Ashford-Zovio people really pitching the idea to University of Arizona leaders. That's a good point. One final story to bring into this and ask you guys some broad questions.
00:31:53
Speaker
Project Kitty Hawk, we've covered that. There was an excellent article that just came out this week that was really looking at the changes and the goals of Project Kitty Hawk for the UNC System. $97 million new money to pick up on your point, Morgan. New money investment that was COVID money.
00:32:11
Speaker
And it's one-time money they have to spend by 2026. They created an internal OPA with wildly optimistic projections, which we discussed last week. The governance question is, as they're coming up, as they are now pitching a new plan, which quite honestly is so much better than the previous plan, they've got a lot of good changes they're making. However, the governance is disturbing.
00:32:39
Speaker
During the Board of Governors meeting and even to the legislature, the chair of the Board of Governors sounded like he was the one pitching the project, not providing oversight, but he was the one really saying, this is a great thing and it's safe and let's go do it. And then when the reporter, Pam Kelly, tried to get questions, there were a couple of the governors
00:33:01
Speaker
who said, no, we're not going to talk. Even though it's a public project with $97 million of money, they don't feel the need to speak to their decisions. And two of the governors said, we don't know enough to provide commentary. And part of the question for me is,
00:33:17
Speaker
What does it take if they've radically changed the goals, which I think is smart, but shouldn't you be asking tough questions such as how do we know your new plan is going to meet the financial goals that we're assuming? How do we know you're not going to need a new cash injection after 2026? Help us believe this new, better plan is going to succeed.
00:33:40
Speaker
But $97 million is not enough money for the governors to actually know what's happening and be able to comment on it. So good luck for their turnaround, and I think that they're on a much better approach, but it really raises the government. Who's actually providing oversight and pushing them in the right direction?
00:34:01
Speaker
So that's a third story. And again, it comes down to governance. And all three of these, I would note, it's not just governance within the university systems. This is branching into state government as well, since we're talking public funds. Interestingly, I had heard some scuttlebutt at one point about how involved
00:34:23
Speaker
the board was in terms of like selecting staff and things like that. For Kitty Hawk, you mean? Yeah. Yeah. And, you know, it was gossip. So, you know, that's why we're on a podcast. You can gossip here. But it seems borne out by some of what we're learning now. All right. So let me ask you guys some questions.
Prevalence of Governance Problems in Online Education
00:34:45
Speaker
Given these stories and what I see as a common thing, why are we seeing this
00:34:51
Speaker
large governance problems across these, and it's not just these three, but they're the most high profile, these high profile online initiatives. Is, is it something about online education that begs a governance issue or why is governance becoming such a crisis as exhibited by these three examples?
00:35:15
Speaker
I personally don't think it's something to do with online education specifically. I think it's like a few things that have happened in higher education where things happen and certain practices and cultures and ways of doing things, you know, time catches them up a little bit. And I think the university kind of governance model is a bit more susceptible to
00:35:45
Speaker
being a little bit closed, being a little bit unwilling to hear critique. I think obviously that doesn't speak to every single institution, but I think just thinking about my experiences and the experiences of others, one of the kind of perennial frustrations in universities is not having the right people
00:36:09
Speaker
Feeding in to some of the decisions that are made and the problems that are caused from that and I think that is a That is a cultural problem and that might equate to People that work in digital and online education when it refers to those kinds of decisions it may just refer in terms of legal the legal profession around contractual stuff and There is something
00:36:35
Speaker
around higher education governance that at times doesn't seem to bring the right people into the room to be informed about decisions. And I don't know whether that's a kind of sense of protectionism and a kind of closed kind of group, but I've seen that a lot. And I think that speaks to a cultural thing that is obviously part of these stories, I think.
00:37:01
Speaker
I actually wonder whether there is something here, not related to online learning per se, but it comes out in online learning in part because the stakes are so high, to paraphrase Henry Kissinger. But in a way, often the way that some of these online things are set up, a lot of money is flowing directly to different kinds of units. So they have
00:37:29
Speaker
financial interests at stake. I remember just at one institution where I was being told not to poke the bear because money was flowing directly to deans because of online learning. And if you actually tried to put more scrutiny on that, you'd get a lot of
00:37:52
Speaker
opposition pretty quickly. And I think Kitty Hawk is seeing that in reverse a little way, you know, some of what some of the slowness I think has come because they're not addressing incentives quite enough. So so I think some of it is because of money flows. Also, I think some of what we're trying to see here is people trying to take shortcuts.
Challenges in Rapid Expansion of Online Education
00:38:14
Speaker
You know, when you look at how a UCF or
00:38:18
Speaker
Oregon State or some of these players built up, it took time, you know, it took time, and it's going to take longer now because there are more players in the space. And and, you know, what you've got with Arizona and Idaho certainly is trying to leapfrog that. And that gets messy. And you don't want to look at that sausage too closely, because you're trying to jump ahead in a way. And so I wonder whether there's something there.
00:38:42
Speaker
I think as well that's for me where some of this relates to online education because I think in the current climate the temptation is
00:38:52
Speaker
to view online education as almost like a separate initiative that offers you different avenues to achieve what you want to achieve at scale, an OPM or an acquisition. And it's thought about in that way and it's not thought about something that's to do with the evolution of an institution that means more wholesale change. I think that's where
00:39:17
Speaker
people can be seduced around online education. It feels to me, in my personal opinion, that it is smarter and wiser for an institution to think this is a longer term trajectory that involves more fundamental change across our institution, not an initiative that we run along the side separately and try to just scale up as quickly as possible because University of X down the road has done it and isn't that attractive and appealing.
00:39:45
Speaker
One thing I would add to sort of what both of you are saying, and it gets to the culture, but it does get to online, is there's this disdain in higher education culture against the corporatization of education. And there is a point to be made there. But when it comes to the things we're talking about, such as, are you managing a contract? Are you evaluating risk? Do you know what the terms of this bond are?
00:40:13
Speaker
there's higher education that feels very corporate. And that's what we're resisting, is turning the academy into a corporate business making decision. But the fact is, these are very real issues. So when you're saying sometimes we don't have the right people in the room, part of it to me is because there's a resistance to even want to think critically.
Need for Critical Thinking and External Input in Governance
00:40:37
Speaker
But then, when it hits the fan, then people do care.
00:40:42
Speaker
But there is a reason for this up front. Yeah, I think, you know, it takes a certain degree of humility at times, especially when you're in a, you know, senior leadership position, to admit that you're not well armed or knowledgeable about a particular area, and you need to bring other people in. And I think, you know, that's an aspect of the culture thing. But I completely agree with you, Phil. I think this is where
00:41:07
Speaker
people can rail against the commercial aspect of higher education and marketization than they do in the UK, but you also have to engage in the real world as well. And I can think of, I remember chatting to someone who was on the university side of an OPM deal, who wasn't part of the exec board. And the way that they described those negotiations around the contract was a complete mismatch between a very experienced commercial team
00:41:34
Speaker
and a university executive team that didn't speak or understand that language. And so there has to be a degree of humility and a degree of self-refection to say, look, things have changed. We're maybe not the best arm to make these decisions. So we need to bring in others. It doesn't mean that you resign and you think, well, that's my job done now. The times have changed. But you have to bring in the right people.
00:42:02
Speaker
to kind of support you in those kind of things but it takes a certain mindset to do that I think.
00:42:07
Speaker
I have a, I have a sort of a joke list of 10 iron laws of edtech, which is actually deadly serious. But the first two. You're going to have to put this in a poster by the way. Yes. And a poster as well. I'd like a poster, please. Never let your president go to a conference because he'll come back wanting to buy the University of Phoenix or create a world campus. The other one is never let your provost sign a contract. Sorry, good provost out there.
00:42:33
Speaker
And it stems from exactly these things. So part of what we're hearing here, though, is in my mind, it takes humility.
00:42:46
Speaker
But there's also a tendency, and it might be born out of the lack of humility, that instead of viewing as we need other points of view, we should listen to some of this pushback because it can legitimately make the decision process better. Instead of doing that, there's such a tendency to say, oh, that's just bad faith. That's the Faculty Senate doing what they always do. And they would resist anything.
00:43:12
Speaker
And you have to admit, faculty governance in particular has been very faulty and very capable of shooting down good initiatives
Handling Critique and Faculty Governance in Higher Education
00:43:21
Speaker
in the past. But I think the leadership needs to understand the difference between those two.
00:43:28
Speaker
resistance for resistance sake or a bad process versus I need outside voices and other people making sure we get the deal right. And I don't see that a lot of leaders know how to make that that judgment.
00:43:44
Speaker
I guess as well, Phil, I think an aspect of it is you might not have a great faculty senator, and I think you kind of referred to that. But my feeling is that as a leader, when those two things become overly adversarial, nobody wins. And so that is an aspect of leadership that kind of compromise on managing those kinds of relationships in the odd governance environment of universities. And often, unfortunately,
00:44:13
Speaker
governance bodies get co-opted by other bodies. I remember going back to some of the issues at Illinois and as it came out, it was clear that the Faculty Senate had been co-opted by the leadership and was hand in hand with some of the things that were going on that actually landed up in the Chancellor getting fired.
00:44:32
Speaker
But the risk is, or what I think we're seeing, certainly in the first two cases, the UAGC and University of Phoenix, if you take these very legitimate problems and issues with other bodies, if you handle it the wrong way, and if you just use it to shut down input, you can torpedo an entire initiative out of it.
00:44:57
Speaker
So there are real problems, but higher education, in my mind, higher education's got to learn how to handle these big change efforts much more effectively. And the answer is not ignore governance and ignore oversight. The answer is also not let the existing processes do everything. And if it takes five years, oh, well.
00:45:18
Speaker
But higher education, part of the challenge we face now is how does it actually evolve its decision making capability between these two extremes become a lot more effective moving forward. And unfortunately, we're seeing these cases quite a bit in online education right now with these three stories. So
00:45:39
Speaker
Well, it's another cheerful episode, but we can't help the environment that we're in right now. These are the questions that people are grappling with, but it's great to hear your perspective. And we look forward to meeting with everyone again and our loyal listeners next week. Thank you.