Amazon can teach higher education something important about innovation and uniqueness

Keane, Ph.D., is dean at the Knauss School of Business at the University of San Diego. He lives in Del Mar.

The other night I escaped into the NFL’s latest product-line-extension of its original, 50-year-old product-line-extension: “Monday Night Football with Peyton and Eli,” also known as the “ManningCast.” The show is a spinoff that features two former NFL greats, ex-quarterbacks Peyton and Eli Manning, watching the game while engaging in delightful banter with celebrity guests.

I was jolted from my football-induced coma when my wife suddenly got “pinged” on her phone, jumped up and ran to the door to find that day’s Amazon delivery awaiting her — Minnesota wild rice — which she had ordered online from Amazon less than 24 hours earlier.

Like most from the land of 10,000 lakes, my wife endures an inexplicable longing for the uniquely Minnesotan grain every fall. Before the miracle of Amazon, living on the West Coast forced an annual October negotiation with her sister, still living in Minneapolis, to go to the grocery store, buy a season’s worth of wild rice, pack it in a box, drive it to the UPS store, and dole out a hefty fee to ship it via ground for arrival just before Thanksgiving.

Being a business school dean, I’m constantly reflecting on everyday life through the lens of the classroom. What lessons can be learned in the “real world” that make the textbook come alive for students? After witnessing my wife’s craving fulfilled almost instantaneously from her phone, I was reminded that the warp and weft of any organization’s successful strategy depends on two things — innovation and uniqueness. Amazon epitomizes both, innovating a unique shopping experience by completely disrupting the bricks-and-mortar retail industry. The NFL’s “ManningCast” is at best an incremental change to a very old business model.

The question of what makes you different from your competitors can sometimes be hard to articulate. After all, every organization believes that its products are better than its competition, otherwise why would it even be in business? However, in marketing, posting hyperbolic superlatives about being the “best” on social media is about as useless as a chimney without a fire.

Equally foundational to any sustainable strategy is an internal culture that cherishes new ideas, and pushes the organization to pioneer toward new frontiers. Like hops to beer, innovation is foundational in the pursuit of uniqueness. Embedding innovation requires an intentionality that may threaten individuals who have a vested interest in maintaining the status quo.

Consider higher education as a case study. The competitive environment is densely packed with barely differentiated institutions that deliver a certificate of achievement to customers — the academic degree. According to U.S. News & World Report, the number of colleges in the United States has been declining since 2012. Worse, enrollments have also decreased by 17 percent over the last decade.

A decreasing number of suppliers (colleges) combined with a decreasing number of buyers (students) usually triggers alarm bells in an industry. Within academe, the ringing is muffled by the fatalistic grousing about the so-called demographic cliff, a reference to the lower birth rate in the U.S. after the 2008 recession that will translate into fewer college-aged students. That red herring might not be the smelliest, but it certainly distracts from the fact that innovation and uniqueness are not always a tight focus of strategic planning in most universities.

Uncovering what might be stifling innovation, and thus uniqueness, within higher education isn’t difficult. Nearly every objective study concludes that diversity is a key driver of innovation.

Yet according to research out this year from the McKinsey management consultant firm, at the current pace of change in higher education, it would take 70 years for the student population to reflect the diverse makeup of the general population in the United States. And faculty diversity is even worse. McKinsey estimates that it would take nearly 300 years for faculty to reach parity with the general population. Of course there are other obstacles to innovation and uniqueness in higher education, like the decades of tuition price increases needed to fund a lack of scale economies caused by undifferentiated program offerings and inefficient operations.

For leaders within higher education, change won’t come from a “ManningCast”-like approach to extending an old business model.

Start with making diversity a strategic imperative designed to seed an innovation culture. Then, apply the same scientific inquiry academe is noted for to assess your own operations.

If the analysis shows that your college is not unique enough to sustain the high tuition price, then an Amazon-like disruption might be in order.