Hospitality & Design Summit 2009 - 148

- Speaker Perspectives apollo group and the rise of For-Profit adult education A Case Study on the Art of the Advantage as presented by Jill Hellman I n 1994, the Apollo Group was one of the smaller firms in the for-profit education business. It earned about $125 million in revenue while its two closest competitors, ITT Educational Services and Devry, collected $185 million and $210 million respectively. But three years later, the Apollo Group eclipsed its competitors by a small margin. And by 2004, Apollo’s revenue, at $1.8 billion, towered over its peers.’ In just 10 years the Apollo Group had grown to more than double the size of ITT or Devry, and more than five times the industry average. The Apollo Group achieved this breakthrough growth without sacrificing performance. During this growth period it delivered the highest shareholder return and highest profit margin in its peer group. Today the Apollo Group serves over 200,000 students from over 150 centers around the world. Its University of Phoenix subsidiary is today the largest private university in the U.S. returned to civilian life at home, he immediately took up his studies again, earning a bachelor’s degree in history from a private liberal arts college.1 The discontent planted in him early by his school’s inability to properly teach him through his dyslexia crystallized at college. He grew acutely aware of, and frustrated by, the disparity he witnessed between the experiences of upper-middle-class students and poorer students like himself. In his view, the school’s professors and advisors expected that the richer students would go on to become influential people such as successful academics, business people, or governmental leaders, and treated them as such. They did not share this enthusiasm for their less-well-off students, nor encourage them in the same way. Sperling’s time at college would be a turning point. He describes it as the “period of my life [that] might well be entitled, ‘How I Learned to Hate the Middle Class.’”2 The discontent planted in Sperling would take several years to germinate. After graduation, he went on to earn a doctorate in economics history from Kings College at Cambridge University and became a tenured humanities professor at San Jose State University. It was not until the early 1970s that Sperling’s discontent found an outlet—when a weak signal revealed to him that the system had grown rigid, and unable to respond to an emerging need. How did the Apollo Group grow from one of many to the dominant firm in its industry? As with other great innovations, the Apollo Group shifted its perspective before others saw the major educational shift coming. It then propagated this perspective through the student, educational, and regulatory communities, navigating the five stages of change. Weak signals: the return of adults to college In the early 1970s Sperling won a grant to study how to deal with delinquency rates in a rough San Jose neighborhood. To understand the root problem he interviewed numerous law-enforcement personnel, and concluded that education (or the lack of) was a key contributor. To become productive members of society, many criminals needed to relearn skills so they could change careers. Sterling decided to study adult education. He believed that several things were happening in the world that would soon drive a surge in demand for education by working adults. The personal computer was driving a radical shift in the nature of work. People were spending more time working on computers and less time doing physical work. Value was shifting to services rather than goods. New jobs were demanding new skills. At the same time, the people who would fill these jobs were unprepared. Most would be baby-boomers who were reaching their 30s and would need retraining in order to remain relevant. These factors were further amplified by a shift in the nature of careers. Whereas historically people had joined a company for life, such loyalty was becoming uncommon. People were changing employers several times throughout a career–sometimes by choice, sometimes not. This trend would only continue. All these societal changes told Sterling that universities would face a radical shift in demand. In the near future, he was convinced, working adults would emerge as the primary source of students. So Sterling began exploring what teaching systems and delivery methods would be required to serve their needs. Note: for the decade beginning 1994 and ending 2004 metal/ diScontent The commitment: learning to “hate the middle class” As with nearly every major innovation, the Apollo Group’s story begins long before its innovation first emerged. It started when someone became infected by a deep-seated commitment. John Sperling was a poor student. A dyslexic child, he graduated from high school without becoming fully literate. Recognizing that the educational system could not adequately teach him, Sperling decided to teach himself. He joined the Merchant Marines where he sailed the world and taught himself to read. He read a broad array of philosophy, from Henry Miller to Nietzsche. He later joined the Navy and participated in World War II. When he hospi tal i ty des i g n su m m i t 2009

Hospitality & Design Summit 2009

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