- December 11, 2019
- Posted by: Stephen Johnson
- Category: Vistage
Higher education has historically been viewed by many as a place of occupational safety characterized by tenure, solid endowments and the absence of the make or break competition that characterizes the business world. Rarely have institutions of higher education failed.
Fifty-five high quality, private colleges have closed down and liquidated in the past three years according to a Forbes article, their facilities being repurposed and their employees scattered. Hundreds of these institutions are for the first time facing forces well known to the private sector: falling demand, intense competition and capital challenges. As one small college president said: “I told them (my board) the only way we’re going to succeed is by putting other colleges out of business, because you have to take market share.”
Over the decades many activities that were once considered not to be businesses have become, well, businesses. Law, medicine, architecture and other fields that one considered themselves “professions” have acquired distinctly corporate attributes as well. I suppose that for higher education it was just a matter of time.
For some post-graduate education, check out the Forbes article “Dawn of the Dead: For Hundreds of The Nation’s Private Colleges, It’s Merge or Perish.”There are lessons here for every organization; for profit or not. It will be interesting to see how these institutions respond to these challenges. Maybe the colleges aren’t through teaching us. Are the larger schools and the Ivy League next?
Rank and Yank, RIP
General Electric under Jack Welch became notorious for its “Rank and Yank” performance review system in which the “bottom” 10% of its work force was annually “made available to industry.” (Whether this system contributed to GE’s remarkable fall from admired company to basket case I leave to others to explore, but even it has moved away from it). “Rank and Yank” was based on comparing a employee to everyone else. A different approach says that the best performance review compares employees to themselves.
Not only does such an approach change the focus of the review from competing with co-workers to bettering oneself, there are other benefits as well. Find out How Performance Reviews Can Kill Your Culture. In a related article, if you’d like to learn about GE”s move away from Rank and Yank a few years back, check out “How Millennials Forced GE to Scrap Performance Reviews.”
And there is still another performance review system that Reinforces Your Culture! and your goal of having the right people on the bus, and in the right seats on your bus. If you’d like to learn more, drop me a line and I can introduce you to The People Analyzer (TM) from the Entrepreneur Operating System (EOS).
Value, Properly Understood
Many companies are currently engaged in year-end planning and too many plans are not much more than “how can we do more next year?” This can happen when companies are enjoying success and don’t ask themselves the question, why? As we often say at Vistage meetings, “the second worst thing that can happen to a company is success” becausewe take that success for granted and assume, often incorrectly that we understand its source, instead of asking whether we’ve been lucky or smart.
To help you discern what your customers really value, these two HBR articles offer a process to check your thinking. The first “The Elements of Value” offers research from Bain and Company in the form of a compelling visual pyramid of value that puts you in mind of Maslow’s “Hierarchy of Needs.” Have your team review these elements and see if you agree on what your value proposition is. This first link is for B2C companies. HBR offered a follow up article that brings the same analysis to bear on B2B issues. Check it out to be sure what business you’re REALLY in.
What Really Matters
In this newsletter, I try to offer a brief description of an article, video or blog posting so that you can quickly decide whether to read it. I don’t have words for this one. I hope you’ll share this pediatrician’s blog posting.
An Inconvenient Truth: Economic commentaries in recent decades has been characterized by a lament over the departure of manufacturing from our shores. Dr. Alan Beaulieu of ITR Economics offers some data to the contrary. Find out why he thinks that the strength of US manufacturing is an inconvenient truth.
Giving Thanks: Thanksgiving was two weeks ago. That said, we can never too grateful our many blessings. Economist Brian Wesbury often has opinions that not all economists concur with. However, in his Thanksgiving blog posting, he offers some Thanksgiving thoughts I think we can all agree with.