Despite all their lofty rhetoric about advancing human knowledge, most deans and chancellors at the world’s top-rated universities seem to believe the purpose of an elite university is to provide a grand setting in which a small number of carefully screened and highly privileged students acquire the exclusive credentials they will need to penetrate the ranks of other similarly elite institutions. This narrow, tradition-bound perspective has opened a gaping hole in the market for education — one that’s being filled by organizations like the University of Phoenix and even more radical initiatives such as Peer 2 Peer University.
I’ve never met a leader who swears allegiance to the status quo, and yet few organizations seem capable of proactive change. How do we explain this? The answer lies, in part, with the difficulty we have in identifying our deeply ingrained habits. While conceptually one may understand the idea of industry orthodoxies, how does one distinguish between an innovation-cramping habit and a time-tested policy that works?
There are only two things that can throw our habits into sharp relief: a crisis that brutally exposes our collective myopia, or a mission so compelling and preposterous that it forces us to rethink our time-worn practices. That’s the point I made a few years back at a conference for MBA program directors and business school deans.
The number I threw up on the screen was $250. Then I asked, “Why can’t we offer students an MBA degree for $250? Today, the all-in cost of an MBA degree at a top-flight university can run to $100,000 or more. If, as business educators, we really want to improve the quality of management around the world, we have to find a way to radically reduce the cost of a management degree.”
To push their thinking, I shared a case study. The Aravind Eye Care System was founded in 1976 in Madurai, India, by Dr. Govindappa Venkataswamy. His mission: eliminate needless blindness by dramatically rethinking ophthalmic care.
Modeled on McDonald’s low-cost fast food model, the chain of eye clinics has developed highly efficient protocols for cataract surgery. Those who can afford the surgery pay for the procedure, but approximately 70 percent of Aravind’s patients receive their care for free. Surgeons are paid competitive salaries, but perform as many as 100 surgeries during each 12-hour shift.
More than 300,000 surgeries are performed each year in Aravind’s five purpose-built hospitals, where operating rooms are in use 24 hours a day. The cost per surgery is about $18, about 1 percent of the cost for a similar procedure in the United States. Even so, Aravind’s complication rates are as good or better than the average in Western hospitals. The system is also financially self-supporting thanks to the extraordinary efficiencies that have been engineered into its facilities and practices.
So, I asked my B-school friends, if it’s possible to perform eye surgery for less than $20, why can’t we offer a basic MBA degree for $250? Yeah, teaching is more complicated than surgery, but still … Like health care, higher education is an extraordinarily inefficient business. Think about it: One professor in front of 80 kids. Hundreds of millions of dollars devoted to bricks and mortar. Huge research budgets devoted to the production of impenetrable articles for obscure journals. These taken-for-granted features of a typical business school seem sensible and indispensible until you redefine success. Instead of training a few hundred young managers each year, what if a business school aimed to train a few hundred thousand?
As institutions mature, the positive thrust of mission diminishes and the pull of habit strengthens — until, one day, the organization can no longer escape the gravitational field of its own legacy. For now, though, we need to remind ourselves that it’s impossible to build adaptable organizations without adaptable people — individuals who are humble, honest and inspired. These are the human roots of renewal. They aren’t the only things that are needed to build an evolutionary advantage, but they’re undoubtedly the most important.
Excerpted with permission of the publisher from What Matters Now: How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation by Gary Hamel. He can be reached at email@example.com.