E-Learning | Feature

The Secret of Southern New Hampshire University's Success

SNHU went from a small, relatively unremarkable New England institution to one of the biggest nonprofit online educators in the country.

On the competitive playground of higher education business, where institutions vie for students and tuition dollars and survival, Paul LeBlanc is the sort who will take your lunch money and eat your lunch.

LeBlanc comes across as a nice guy in an interview, but he is a disruptive force. In just a few years, the president of Southern New Hampshire University has transformed a relatively unremarkable New England institution into the fastest growing not-for-profit online educator in the country -- and one of the biggest. SNHU's College of Online and Continuing Education (COCE) enrolls 25,000 students in 36 states, generates annual revenues of $200 million and has double-digit profit margins.

SNHU has succeeded in the online space by leveraging technology and providing well-constructed courses and Amazon-like customer service to mostly older students at a cost they can afford. Tuition and fees for SNHU's online BA is about one-third of what students pay to earn the same degree at the university's leafy brick-and-mortar campus, not including housing and meals. The main campus and its virtual counterpart have a symbiotic relationship. The former provides credibility to the online operation. The latter distributes profits to its alma mater in the form of royalty payments.

LeBlanc is at the crest of a gathering IT-enabled wave of disruptive innovation that will put half of all universities out of business in 15 years, predicted Clayton Christensen, a Harvard Business School professor, author of The Innovative University and a friend of LeBlanc. Christensen's work provided the principles and philosophical underpinnings that LeBlanc has exploited to create a new business model for delivering education at SNHU. A true believer, LeBlanc continues to innovate. What's next? Creating a new model that will blow up the current one, of course.

"Paul is one of the few people who took our research on innovation and how to survive disruption seriously," said Michael Horn, co-founder and executive director of the Clayton Christensen Institute for Disruptive Innovation. "They are developing a recipe book for how you manage innovation at an established [university]."

Reinvention by Necessity

When Leblanc arrived at SNHU in 2003, the institution was in no shape to throw its weight around. It was a second- and perhaps a third-tier institution. Founded 70 years earlier as a proprietary storefront secretarial school in Manchester, the university had evolved into a middling traditional institution of a few thousand students. Six years into LeBlanc's administration, amid the Great Recession, enrollment was down and budget pressures were becoming increasingly uncomfortable. Forced into action, LeBlanc and SNHU's board made a decision to build up the university's anemic online presence, which had existed since 1996, and aggressively enter the market for non-traditional students.

"When you have opportunity and urgency, that's a powerful combination," LeBlanc said.

The growth of the last four years has been remarkable. In 2012, Fast Company named SNHU to its list of the World's 50 Most Innovative Companies, recognizing it ''for relentlessly reinventing higher education online and off.'' The university was number 12 on the list, ahead of LinkedIn. Higher education leaders hopeful of establishing an online beachhead have sought the advice of LeBlanc. Eduventures predicts that in the next 12 to 24 months, as many as 500 institutions of higher education will enter the online education space or attempt to expand existing programs.

SNHU's success has been due, in part, to good timing. In the decade or so before the economy crashed, the for-profit education sector had proven that there is a viable market for online education. More recently, the buzz about massive open online courses (MOOCs) created by elite institutions such as Stanford, MIT and Harvard further legitimatized online education.

When the recession hit, the combination of high unemployment and high tuition created a new market: millions of older workers searching for a low-cost means of acquiring new credentials and marketable skills. Yet pioneering for-profit institutions were back on their heels amid withering government scrutiny of their business practices.

SNHU saw an opportunity and seized it.

"The market was ready for a high-quality, nonprofit alternative," LeBlanc said.

SNHU's online success wasn't all fortuitous timing and dumb luck. LeBlanc and his team were smart about their virtual adventure. The president raided the for-profit sector to assemble a crack team of online education professionals. He gave the online operation autonomy, allowing it to take chances that the university's bureaucracy otherwise wouldn't have allowed. And he used troves of electronically collected data to analyze progress and make course adjustments.

"We studied the way for-profits use data to drive decision-making, streamline administrative processes, focus on customer service and more," LeBlanc said. "We also invested heavily into academic quality, superb advising and student support."

The result is a new hybrid university "that combines the best values of the nonprofit sector with the operational prowess of the for-profits," LeBlanc said. An unexpected benefit is the way SNHU's online education has benefited traditional modes of instruction. Lessons learned about teaching and student engagement online inform operations on SNHU's main campus.

"When faculty teach online, they often bring back to their face-to-face courses new pedagogy, resources and thinking. Advising on the main campus was reorganized in ways inspired by online," LeBlanc said. "Ten years ago we used to ask, ‘How can we make an online course as good as a traditional face-to-face course?' That question is now reversed."

Beyond Seat Time

In April 2012, SNHU became the first institution eligible for federal financial aid using a competency-based approach to grant associates degrees. With the Education Department's blessing, SNHU went live with a new education delivery platform, College for America, that combines online learning and competency-based assessments. Students earn credentials on the merit of what they know, not seat time or earned credits.

The amount of quality data captured by online courses makes them stronger candidates for competency-based assessment than traditional classroom learning, noted Sue Talley, dean of technology at Capella University. "You come to the realization that seat time and credits are not a great way of measuring the success of students in a course," she said.

LeBlanc goes further, suggesting that "competency-based education could be the paradigm shift for higher education, much more than MOOCs, though MOOCs have been a subject of media adoration." (For more on SNHU's College for America program, see Blazing the Trail: Competency-Based Education at SNHU.")

LeBlanc intends to stay ahead of the disruption curve. He indicated that innovation proceeds apace at SNHU, coyly suggesting that there is some "really cool stuff" in the development pipeline that he is keeping under wraps for now.

"We really don't want to give that away to soon," he said.

About the Author

John Pulley is a freelance writer based in Washington, DC.

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