What’s Happening Here?

Author: Ron Morris, The American Entrepreneur

Dateline: Very recently; Location: Duquesne University

My stomach hurt like hell and my leg was even worse. So, I sat down and told my students exactly what was going on with me, health-wise. After a twenty-minute explanation that included an historical overview of my situation, I asked the students whether they wanted to have an open-class discussion on their projects or, perhaps, to talk about a specific issue one-on-one.

Their response, while surprising, probably could have been anticipated: “Professor, why don’t you just go home?”

I don’t know if you know this, but Duquesne charges some $35,000.00 a year in tuition. That’s a lot of dough.

But the fact that they just wanted me to “go home” told me that they put almost no value on the money that someone was paying for their degree. If it were me, the last thing I would have wanted to have been told by my professor was to leave, thus leaving me holding the bag money-wise.

Dateline: Thursday afternoon; Location: CMU

After giving a lecture to perhaps forty-five or fifty students at CMU’s Graduate School of Business, I walked outside with the professor who taught this particular course - a very good guy and friend whose first name will only be revealed.

“Dave” said to me as he walked me to my car, and in response to my question about the earnestness of his students, “Ron, we have an awful lot of students who, and in my opinion, just want to trade their $100,000.00 tuition bill for a fast and easy degree.”

He went on to say, “We have some good kids too --- they want the knowledge – but every year it seems as if there are one or two more students who just want to trade money for a degree. I don’t get it. I just don’t get it.”

So what is happening here?

Well, I sat down and thought about it this afternoon and I came up with five solid reasons why I think our academic systems – especially at the collegiate level – might be failing. Here are those reasons:

  1. Nobody is prepared for college anymore. - What I mean by this is that most students simply lack what academicians refer to as “entering competencies.” These would be such things as:
    • The ability to write a logical, fluent, and coherent report;
    • The ability to conduct meaningful research (meaning that the student has a clear objective and approaches that objective with logic and diligence);
    • Where he or she lacks skills with statistical analyses and general mathematics (hence, the student cannot do a spreadsheet, a cash-flow report, or any other fundamental, analytical project).
  2. Colleges have lost their spine! – Let me explain what I mean by this:
    • Many, many professors are today simply afraid to give their students any grade less than an “A.”
    • Many professors grade only on the curve, thus pretty much assuring that “everybody wins.” (I am personally often in this circumstance --- for without the curve, I could easily end up with three-fourths of my students having failing grades.)
    • Finally, these same professors have a feeling of being “bullet-proof” by virtue of the tenure that they hold. I don’t know about you, but in my mind, tenure is a disease that spreads and infects everything and everyone. Tenure has nothing to do with a free-market economy. It is a false representation of reality.
  3. All the tough guys are gone! – This should be self-evident --- professors who would look students in the eye and say, “Yes, you failed the course --- and you deserved to fail the course. So what do you want from me?”

    One of the toughest of the tough guys was Tom Murrin. Tom’s motto (though I never actually heard him say it) was, “You take a pass … he’ll have your ass.”

    When I joined Duquesne back in 1999, Tom was probably the first (and for a while, it seemed like the only) individual on the faculty and/or its management that not only welcomed me to the program, but that also showed me which way the wind was blowing. His support was so very important to me. To have a guy of his caliber (he was also once president of what he liked to call the “Dirty Hands” businesses of Westinghouse) who really never cared much about whether or not you were slick, glib, and/or hip. He only cared about results.

    Many a night, Tom and I would sit in his office and he would tell me stories about the halcyonic days of Circle W. The stories were great --- the truth even better. I never knew that so much fun could be had in an environment of growth and learning.

    But as one who had grown up in the world of small business, I soon came to realize that there was a significant gulf between that which happened in a start-up and that which took place in a major corporation.

    You see, I wasn’t so interested in how these entities ran themselves as I was in how people like Murrin could squeeze so much productivity out of them. It must have been just lovely to watch him get what he needed while preserving “domestic tranquility” amongst the various executives (of which there were many). Tom was a master of orchestration.

    When Tom retired, he did so with the same class and dignity he employed while running the program. I missed him from the minute he left the building (a moment I remember so clearly) and I’m sure that I always will.

    I speak in this past tense because Tom passed away on Tuesday of this week. A pulling guard from Fordham University, Tom Murrin will always be remembered, at least by me, for his many achievements. My favorite is his role in actually ending the Cold War in the West’s favor. Perhaps we’ll talk about that more on a future show. It is also a story well-worth retelling.

    Tom used to gently grab me by the elbow and drag me into his office to bemoan the fact that, “there just aren’t any tough guys left.” I found it impossible to disagree with his contention.

    Today, our B-schools crank out “13-month wonders” --- people that more or less “buy” their degree in exchange for roughly $100,000.00 in cash. To them, it’s not about the knowledge gained. Instead, it’s all about the piece of paper, suitable for framing and readily affixable to one’s office wall. This “Red Badge of Courage” is what far too many graduate students are chasing.

    And I find this reprehensible. The fact that you have the paper in no way validates knowledge, courage, or achievement. It means only that you “showed up” a sufficient number of times.

  4. Money, Money, Money!

    My fourth reason as to why the university/college system as we know it simply may not be around when my children are ready for it (and I am really re-thinking this as well) is that most colleges and universities pretty much “blew their wad” back in the 70’s, 80’s, and even 90’s.

    For example, the “overbuilding” of what I like to call “instant-campuses” was in reaction to the fact that there was a period of time when all businesses began to slow down while costs kept rising and while the value of a college degree became more and more watered-down. This “adulteration of value” occurred during the period that roughly included 1990-plus through present times.

    For it was during this time that there were just too many empty seats and too few quality professors delivering too little real value.

    In other words, a “bubble.”

    And when bubbles begin to show up in the economy, there’s really not much a business can do but deal with it. I’m afraid that’s exactly what most schools did. They came up with their artificial programs; programs designed to lighten the wallet of the student or students (or government) while at the same time providing a rather weak product to the buyer.

    This is where “learning how to be tough” pays off. The lessons learned from being austere pay back in spades when times become difficult.

    In addition, the phenomenon of rising healthcare prices also simultaneously kicked into high gear. There was just no place to stash and hide these particular costs other than to simply pass them along. But to a young student, this was intolerable.

  5. Finally, a certain percentage of people in this one-time Valhalla of coverage were simply left holding the bag. A certain percentage of people (that is, people coming through the 1990’s and the early part of the 21st century) became the “oughts” by (finally) figuring out that it is the knowledge, and not the degree, that is truly important to them. Sometimes it takes a swift kick in the teeth to get someone to realize the real value of their education. So:

    • One must subtract the folks who are natural “clubhouse leaders” (and pushers) --- that is, people who would do whatever is necessary to build up a knowledge equity of some type from the overall beginning number of students, and,
    • Then add to this a growing number of leaders who “just don’t care about ‘degrees’” --- but instead care only about finding and hiring the smartest possible people.

    This simple little formula will put your company on the road to prosperity and success. What’s more, it really isn’t that hard to find these individuals. You just need to look.

Perhaps this is why Sir John Templeton, the almost-legendary stock analyst who long ago made his home in Bermuda and who also spent his evenings writing newsletter articles, predicted:

  1. The demise of the university system as we know it (Templeton said that there would ultimately be something on the order of fifty total universities on the geographic face of the North American continent by January 1, 2030; and,
  2. That there would be much contention for the “best of the best” of these people.

So far, this is exactly what’s happening. Companies are looking for people who appreciate the knowledge gained over the letter, degree, or even the course name (which can be so misleading).

Templeton knew that the universities had figured out the same thing that businesses had figured out centuries earlier: “Packaging is marketing;” and therefore, if you can get a student to buy off on what seems like a complicated class and even pay more for it, you are a big winner. Schools have only recently figured this out and begun to exploit its power.

As I said, Sir John predicted a number of things and I would urge you to look up his track record and see exactly what I’m talking about. Once you read his consolidated predictions, you will come to the same conclusion that I did --- that there are just too many young students “looking for a place to land” and too few students “looking for educational enlightenment.”

Your job is to find these enlightened ones. They are out there and they are the ones who will move your company from point “A” to point “B.”

Believe me, I’ve seen it work.

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Ron Morris

About Ron Morris

Ron Morris puts over thirty years of entrepreneurial experience to work answering your business questions, solving your business problems, and bringing you all the latest information about everything that is happening on the entrepreneurial landscape. “I’ve built companies with ZERO money and I’ve been associated with companies who have borrowed money”, says Morris, “I’ve merged companies, I’ve sold companies, and I’ve even bankrupted a company. (My “greatest learning experience.”) So, when you tell me about your business problem, it’s a pretty sure thing that I’ve ‘seen it at least once before ... this ain’t textbook stuff ...this is ‘real bullets’, real world stuff.”

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