Working with it’s ad agency Leo Burnett, Heinz Ketchup changed the criteria of what constitutes good ketchup and, as a result, increased its market share. They defined the products’ relatively thick quality as the new ideal. The difficulty of getting the ketchup out of the bottle became a marker of quality.

The criteria we use to evaluate different aspects of our world can have an immense impact. Different criteria encourage different behaviours and outcomes, whether we’re talking about something as banal as ketchup or more substantial matters such as how we evaluate political leaders (e.g. great at speeches, but no experience) or what constitutes great higher education.

In most sectors, evaluations strike a balance between the issues of cost and quality. Both concepts can be interpreted in a number of ways, of course: cost can include the price paid, but also the “cost” of accessing the product or service. Quality can focus on the experience of using the product/service, but also the ways in which ownership of the product/service will position the user in social circles.

Higher education is unique in this regard. The tendency in this sector is to focus almost exclusively on issues pertaining to quality and to downplay the relevance of cost.

This is unfortunate. The primary focus on quality sounds ideal, but it serves to dramatically limit the range of options that higher education offers students. Seeking out innovations that offer new combinations of cost and quality will increase the diversity of solutions available. The objective should be to maximize value; to find new ways to improve the balance between quality and cost.  A wider range of options are needed at various price points.

“Free, as in cost-free”

Neglect of price is evident in criticism of MOOCs. This comment followed The Economist recent articles on online higher education (See “Creative Destruction” and “The Digital Degree“):

“I’m a prof at a mid-sized Canadian university. Plenty of my students have told me that they’ve looked at the MOOC recorded lectures from MIT and Harvard, and they weren’t any better than what we offered.”

A direct comparison of traditional online higher education and MOOCs based solely on quality is insufficient for determining the significance of this new format and business model — because, as everyone knows, MOOCs are free (or close to free).  The dramatically greater scale (number of end-users) of the MOOC model provides economies which in turn allow for higher quality relative to cost (i.e. value). Consequently, it should be of no solace to our Canadian academic that his courses are as good. The fact that this isn’t obvious reflects the tendency to downplay the relevance of cost. It’s also naive.

“She got into a good school . . . “

The tendency to only think in terms of quality is also evident in the way in which we compare institutions. Students are told that Yale, Vassar and other selective institutions are “great institutions” that are better than state universities, which  in turn are better than community colleges, and so on. The fact that tuition levels between different institutions can vary by as much as 1500% is downplayed. While everyone understands the importance of relative price on an intellectual level, we continue to reinforce this odd evaluation scheme year after year. In any other sector of the economy, this logic would seem bizarre.

This accepted logic and criteria helps to reinforce the tendency of institutions to move in unison toward a singular notion of excellence. Clayton Christensen, and others, have defined this as the Harvard DNA — the guiding North Star of higher education — that encourages universities to gravitate toward the selective research university model. We see this same logic in play when colleges seek to transform themselves into universities, and when mid-tier schools like George Washington University and NYU use dramatic increases in tuition fees to signal “excellence”. (See Daniel Luzer’s excellent article, The Prestige Racket.)

The narrow definition of value can also suppress innovations in higher education that offer excellent value at far lower prices. Straighterline pioneered a business model that allows students to pay low monthly fees for ACE-accredited courses as they begin their college and university careers. While the company has managed to succeed, their approach challenges orthodoxy in higher education that equates low-prices with bad education. But at these monthly tuition levels, the value is greater than what students would receive from most other education providers.

A broader and more fluid evaluation scheme in higher education that considers value — not merely quality – will open the door to new instructional strategies, business models, and types of programs.

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Keith Hampson, PhD is the founder of digital / edu / strategy, a research and consulting service that helps colleges, universities and education businesses develop better strategies for maximizing value.