Innovation in Higher Ed: Who is the customer?

For my dissertation I conducted multiple interviews with managers involved in innovation in 40 service organizations. Two types of organizations stood out as different from all the others in terms of innovation: hospitals and universities. I concluded that universities and hospitals had three key traits in common that hindered innovation:

  1. The organizations were not “user-centric” – they were instead “doctor-centric”,
  2. Both had distinct “silos” and difficulty with cross-departmental cooperation and innovation, and
  3. Government and third-party payers.

Despite the incredible growth as Higher Ed moved from an elite luxury to a middle class requirement, the dominant business model and primary delivery process hasn’t changed much in 400 years. Ironically, organizations that serve as centers for scientific research and innovation have not innovated despite incredible growth and skyrocketing costs.

Customer- and user-driven innovation

Readers of this blog know that I believe that innovation starts with a deep understanding of user needs and ideally draws users and customer into co-creation and collaborative innovation.

Customer-centricism drives innovation in many industries, but in education it is not simple to define the customer. Are customers current students? Employers? Alumni? Parents and government (who pay)? Each of these groups may have different views on needs and what would improve the service.

Most colleges now have students evaluate their professors. Some universities (especially teaching-oriented schools) weigh the ratings in pay reviews and tenure or promotion decisions.

Are current students the customer? Students have a wide range of reasons to be in college including: parental pressure; credentials for a job after school; a relatively safe and enjoyable place to continue their high school experimentation with sex, drugs and liquor; and (hopefully) studying something that they are interested in.

Scholars have argued that attempts to focus on current student feedback have resulted in dumbed-down courses and less focus on cheating. See:

For how student evaluations and course selection dumb-down courses:

For how student evaluations taught a professor not to enforce the honor code: via @rogerschank

Math is hard and writing papers are a drag. Through course selection and student evaluations rigor and demanding assignment decrease. As the saying goes “a college education is one of those very few goods for which the less the buyer gets, the more he likes it.” Once again: Are current students the sole or even primary customer for Higher Ed?

Who do you think universities should consider the customer? Who can they use as innovation partners?

This entry was posted in Innovation education, NSD Process, Process Innovation and tagged , . Bookmark the permalink.

14 Responses to Innovation in Higher Ed: Who is the customer?

  1. Not being a business type, I don’t know what I takes to define a customer, but if money’s what’s at stake you’re correct in saying there are different groups. Parents are still most likely to be footing the bill, though at state institutions more students pay; and yes, courting alumni/donor/gov’t money is definitely part of the university game. Cynically, I think they’re all pretty agreed that your money should buy you a meaningful degree with the least effort possible — they don’t see the paradox of that, apparently.

    The main reason I think consumer satisfaction doesn’t work for teaching, though, is because nobody in their right mind enjoys being told their work isn’t good enough — and that’s the essence of a teacher’s job, enforcing high standards. I know the hippie dippie types will object, and say the focus should be on “fulfilling potential” or some such. Ha. In reality, the students can’t focus long enough to do acceptable work, can’t/won’t admit it’s low quality, and certainly don’t see the point of making it better. So frankly, I couldn’t have cared less about their satisfaction and I told them so. I also frequently told them that currently level of performance would get them fired in the real world…not that they (or their parents, I guess) seemed to care.

  2. Kelly Knight says:

    I have long maintained that higher education- colleges, trade and tech schools, and universities- have an intersection of business and academics that requires a different kind of thinking. The administration is the business end, and the faculty are the education end. Innovation occurs when both ends come together to ensure the best learning envirionment for the student at a price comenserate with that education. To this end, the business professionals must view the university as a business for the purpose of delivering a service, and academia must understand that they are the service deliverers, within the framework of rigorous studies. If both are to be true to the mission of higher education, it is my opinion that rigor comes first, and dumming down for the sake of the student is a disservice. This is not to say that compassion should not be exercised, and all options provided for the student to learn.

    As you have stated, the customer in this mix is first the student to whom the services are delivered, and then the payor. If a business is paying for one’s education, it is encumbant on the school to deliver education that will enhance the student/employee’s performance, though learning cannot be guaranteed or forced. In the case where the government is paying through student loans, the student is still the customer as he or she must reimburse the loan. If parents are paying, the student is still the customer and the parent must hold the student accountable for learning.

    BTW, a similar discussion is being held at Linkedin on whether a student is a student, or a customer. I have expressed the opinion that a student is a student, and why should we call him or her anything different, as if the word customer invokes special priveleges.

  3. gschirr says:

    Thanks for your comment! That’s a central dilemma – both students and parents seem to prefer easy graders and low homework…

  4. gschirr says:

    SOME students are students 😉

  5. Pingback: Higher Education Marketing Links of the Day : TWG Plus

  6. Nicolas Bry says:

    When I completed Hec Business School last year, we performed oral feedback and written ratings at the end of each weekly course of lessons. We were considered as students willing to graduate a MBA. We were all as well professionnals, with substantial experience, expecting to complement it with additional knowledge in Marketing, Business Strategy, Management, Finance, etc These expectations and the fact that we were paying for the lessons made us customers as well. My view is that the ratings and oral feedbacks were fruitful both for the teachers and for the students, to refine their teachings for the firsts, focus on specific topics, and to share views for the students, helping to build a common team spirit.

  7. Gary,

    The student, as customer philosophy, is evident at most universities. Schools that are selective, the ‘students are students’ since the faculty and the administration can discipline them and replace them without damaging their reputation or revenue. Schools and programs that are not so selective, there is enormous pressure to treat ‘students as customers’.

    MBA programs, both EMBA and MBA, are in a state of flux and are experiencing similar student/customer relationships. Many universities, MBA programs have become a business and there is sensitivity for the students as customer, especially Executive MBA programs which are declining due to the economic conditions. Corporations no longer can pave the way. By default, the potential EMBA students, become MBA students and their voice/evaluation and reviews thus are critical.

    There is another important element to consider. Social Media is transforming universities’ marketing initiatives. Students are the new brand ambassadors.

    But all of this makes us ponder your question and take this a step further: Should medical students be treated like “customers” rather than students? What about airplane pilots?

    Think about all these thoughts, Gary, you’ve asked an interesting question. Though, I wonder if any of this really matters. Education is becoming social regardless. Brick and mortar universities are being replaced by online education and the university’s brand/reputation is critical. Too many #fail in the university’s Twitter stream is far worse than an F.

    Perhaps, my commentary is amusing to some, but in truth it is the future of our education. We both know that. Ohhh, Gary, before I end….is Klout factored into student/customer relationships 😉 Is a +K like getting a good review? See you smiling 😉 Could not let that one go 😉



  8. gschirr says:

    Great! Sounds like a really good experience.

    Thanks for the comment and for your insights on innovation. – Gary

  9. gschirr says:


    The student vs. customer issue is a big one in its own right, as you point out so well. It also is perplexing to someone who believes in customer co-creation for service innovation.

    Rate My Professor and Koofers are the Klout of academia, but no one pays much attention because they don’t give out freebies 😉

    Thanks for your thoughts!!!!

    – Gary

  10. Angela says:

    I strongly dislike the business model of students/parents as customers buying a credential. I remember reading somewhere (apologies, for I truly cannot remember where) a better analogy: If we insist on using the business model of higher education, then we should at least realize that the “product” is an education, not a degree, and the “customer” is the public, not a student.

  11. gschirr says:

    Agree that student as customer is a problem in a variety of ways, which may partially explain a lack of innovation in HigherEd since service innovation generally benefits from customer collaboration.

  12. Hey Gary,

    Thanks for this. You have provided me with a very helpful resource.

    Considering the same question in preparation for a LEAN initiative at my university after this summer holiday, I considered the three options as suggested by Robert Simons (HBR, 2010): “Shareholders, Employees, and Customers”. In relation to this question I felt most comfortable with the employee-as-customer: As “former Southwest CEO Herb Kelleher has argued, “If employees are treated well, they’ll treat the customers well. If the customers are treated well, they’ll come back, and the shareholders will be happy.” As your earlier responses have shown at least ambivalence in the argumentation for students-as-customer, the employee-as-customer approach can be managed to support judgement calls for differentiating between the various student needs and the many requirements of academic achievement.

    This does not deny the idea it should be hard to enter the study in question, based on academic achievement, for students and professors alike. I’d see this as a sort of order-qualifying criteria (Hill, 2000).

    The (long-term) success, however (say, order-winning criteria, Hill, 2000), will be determined by employees’ ability to drag poor performing students out of their hole and/or stimulate ever-increasing performance.

    What do you think…on the right track?

    Wouter de Valk MBA

  13. gschirr says:


    Sounds like a great approach. I look forward to seeing the final product.

    I concern of mine is that in education and Healthcare this has gone too far and those service are run by and for the “doctors”…


  14. Gary,

    Students are the customer, but higher ed should not take advantage of the fact that the “customer” doesn’t know what they want. Students want to get a degree, but they should want real world experience, they should want to network with potential employers on real projects while still in the classroom.

    We are trying to make that a reality at by connecting university student class projects with businesses. Gary don’t you think universities should be accountable for preparing their students for the real world?

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