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Business Model Innovation: A Blueprint for Higher Education

Business Model Innovation: A Blueprint for Higher Education

Christine Flanagan, BIF’s Student Experience Lab* Director, authored this piece. This article is featured in the December 2012 issue of the EDUCAUSE Review.

Business model innovation is one of the most challenging components of 21st-century leadership. Making incremental improvements to a business model—creating new efficiencies, expanding into adjacent markets—is hard enough. Developing and experimenting with new business models that truly transform how an institution delivers value (while continuing to drive the performance of the current business model) is exceptionally difficult. Yet nowhere is the imperative for business model innovation more prevalent or more relevant than in higher education, which is under intense scrutiny and facing rising costs and potential disruption from all angles.

To compete in a world where the shelf life of business models is shortening, higher education leaders need the tools, skills, and experience to envision, test, and implement new business models. They must believe in the power of experimenting, in the real world, with a network of collaborators who have the audacity to change everything. As the legendary innovation mastermind Clayton Christensen says: “You don’t change a company by giving them ideas. You change them by training them to think a different way.”

Turning Threat into Opportunity

A business model is an organization’s blueprint for creating, delivering, and capturing value and for generating the revenue needed to cover costs, reward stakeholders, and reinvest funds in order to remain competitive. All organizations, both for-profit and nonprofit, have a business model, whether or not that business model is explicit.

To understand how to think about business model innovation in a different way, higher education leaders first need to abandon long-held beliefs about what innovation is, how it works, and what makes it successful. They then must engineer and architect a true platform for transformation—a place where the intractable system that is higher education can design and test proposed solutions in a real-world environment. Moreover, leaders must establish an ongoing process to explore new models for delivering value—even those models that are disruptive to current operations.

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*Visit our Student Experience Lab site to learn more about how we’re transforming education.

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