News that a group of British private schools is considering setting up a private university is a fascinating reminder to us all to keep looking out for innovation opportunities.

So often it is our outdated perspective on our own market and adjacent markets that prevents us from seeing opportunities for innovation. For these schools, an opportunity such as this could be seen as a ‘close in’ - university education as opposed to high school education. In such circumstances, what sometimes happens is that an organisation gains an understanding of a market; what the customers want and who the key players are who are meeting those needs, and on that basis decides that the market presents no opportunity to them. However, over time it's worth revisiting that decision.

All markets develop over time and the needs of customers change. If we can just keep our market knowledge up to date and our minds open, we will spot exciting new opportunities.

Why Innovate Now?

So why is the time right now for these schools to consider a launch into the university market?

• The drive to increase the number of university students in the UK in the last ten years has meant that many universities have had to cut their ‘teaching hours’ for students. Many students are unhappy about this.
• The cost of a university education has increased sharply in recent years in the UK. Students are now liable not just for their living costs but also for tuition costs and these are set to increase further in coming years. This has meant that students are now discerning ‘customers.’
• Until recently ‘good’ universities were viewed as places where academic staff undertook significant amounts of high quality academic research. The expertise to win grants for such research and to attract high quality academic staff to undertake such research could have been perceived as a high barrier to entry for any parties considering setting up a new university.

However, this group of schools has detected a shift in priorities among their target market (students and their parents). High levels of teaching hours may previously have been taken for granted in British universities but now that is no longer the case. However, teaching time is still viewed as important to students and their parents - who are often contributing to the cost of the study course. Many people view teaching hours as far more important than the research credentials of a university.

This now means that a proposition which offers higher levels of teaching time with high quality academic staff has potential. Couple this with the fact that it is likely that group of private schools will have already accumulated significant marketing knowledge about their target customers and this is a new proposition that may fly.

If so, this could be an excellent piece of innovation. In particular:-

• The group of schools will be creating a new product for current customers – the lowest risk innovation strategy.
• The reputations of the private schools will serve to strengthen the nascent university ‘brand’ they may create.

Action For Opportunity Spotting.

So what are the key leanings we can take from this:-

• Keep your knowledge of your market and adjacent markets up to date.
  • Consider whether the barriers to entry in adjacent markets have reduced in any way.
  • The Kano Analysis segments customer needs into  ‘basic’, ‘performance’ and ‘delighters’. It’s critical to keep track in your markets of how current players are delivering in all these areas . Has anything changed which means new opportunities are emerging?

In the case of British universities we see that teaching time is a ‘basic’ feature. Without it the product is simply not fit for purpose. However, some universities are no longer able to deliver at levels to meet customer expectations.

At the same time a barrier to entry has been removed which means that customers are now perhaps willing to consider buying their university education from new sources, including a place that does not have a reputation built on research credentials.

Once again we see here that a key attribute for the innovator to develop is an ability to  ‘stay present’. The innovator needs to keep assessing the competitive space with fresh eyes, to spot those innovation opportunities as they emerge.

For further information see article from the  UK Times.