UNC System Bets $97 million on Creating an Internal OPM

Author

Phil Hill
December 10, 2021

The University of North Carolina system received $97 million in state funding to create Project Kitty Hawk, which will form an internal Online Program Management (OPM) unit to accelerate the system’s online education efforts aimed at working adult learners. Suzanne Smalley has the best coverage of this news at Inside Higher Ed.

The University of North Carolina system is leveraging $97 million in pandemic recovery funding to launch a nonprofit ed-tech start-up intended to bolster adult online education in a state with a looming need for more skilled workers.

Project Kitty Hawk is named after the North Carolina beach town the Wright brothers returned to repeatedly before achieving their dream of flight, an apt metaphor for an undertaking that UNC leaders herald as a transformative effort to reach the state’s estimated one million working adults who have some college education but no degree. Sweeping in its ambition, Project Kitty Hawk’s five-year financial plan projects 120 new online program launches and 24,000 net new enrollments across the system’s 16 university campuses by the 2026–27 academic year, according to working papers project leaders shared with Inside Higher Ed.

I was quoted on two issues relating to this news. The first was around the budget and scope:

“Ninety-seven million is a lot, but not when you hear that they’re talking about 120 programs—that’s less than a million dollars a program,” said Phil Hill, an educational technology consultant and blogger. “The OPMs quite often invest several million per program … They might be biting off more than they could chew. They might not realize just how much time and effort and money is needed to really get these programs running.”

The second was around system buy-in on the initiative.

Hill reviewed the working papers and said he came away with the impression that the system hasn’t yet “done the hard work” of consensus building.

“They make a compelling argument why we need to invest internally, as in UNC system capabilities,” Hill said. “But it raises the question … ‘Are we building up capabilities just within this Kitty Hawk initiative? Or are we going to do it as a way of making each of the … campuses better?’ And I don’t think they’ve figured it out.”

The whole article is worth reading, and I think this initiative matters. With that in mind, I’d like to add some additional thoughts on Project Kitty Hawk.

Good Motivations

Online education is not new to higher ed, but it is increasingly seen as an existential issue that institutions need to address. Prior to ~2010, online education was a topic at the margins – addressed at scale (as in not just an ad hoc online course or program here or there) in the for-profit sector or handful of nonprofit institutions, or in continuing education departments. In the past decade, most institutions came to realize that they needed an online strategy, even if that strategy was based on limited programs, or a move to hybrid programs. What institutions could not afford to do in most cases was to ignore online education and leave it to someone else to figure out. Then came the pandemic, which acted as a step function, not creating the trend of online strategies at the intitutional level (or above), but accelerating them with nonlinear impacts.

Furthermore, the perspective on online education is broadly (but slowly) shifting from a revenue opportunity to augment overall finances to an investment opportunity to enable schools to be more responsive to learner needs and student demographic changes. Spend money and be patient, the payoff will come in the long term.

As an indication of this perspective, Kitty Hawk focuses on serving the state’s own working adults and doesn’t fall into the trap of drooling over out-of-state tuition revenue.

In this regard, Project Kitty Hawk represents the UNC system and the state making a wise choice to address online education for the state’s working adults by a serious investment.

While the details are not yet clear, it is somewhat encouraging to see this internal OPM perspective. Provide services to all 16 universities in the system to improve their capabilities. This approach is so much better than Calbright College and working completely separate from system colleges.

But that is the optimistic interpretation.

A Crowded Field

What I would love to see some day is an announcement from a state investing in strategic online education that actually builds on the lessons of the other initiatives that have been made in other states. Put another way, please stop selling a new online initiative like your state is discovering new territory; instead, show what you’ve learned and how you are improving the model. Kitty Hawk positions itself as an alternative to third-party OPMs, but not as building on a legacy of internal system efforts.

CalState Online, University of Texas Institute for Transformative Learning, UF Online, SUNY Online, Purdue University Global, University of Arizona Global, UMass Global, California Virtual Campus–Online Education Initiative, University of Arkansas eVersity and Grantham acquisition, Missouri Online, Calbright College . . . the list goes on. Unfortunately, many of these initiatives fail or require a complete restructuring once reality sets in. What has UNC learned from these initiatives, if anything? How is their approach better.

From the working document referenced in the IHE article (which I’ve read but don’t have permission to share), the Kitty Hawk plan mentions lessons learned from other state initiatives, but there is no meat to back up this claim. In the section on “Why”, the document lists:

  • Working adult learners are a large un/underserved market in NC

  • UNC system schools lack the services and infrastructure to serve working adults

  • Current private sector offerings are not a fix

I hope that I’m wrong in my interpretation, but the overall plan for Kitty Hawk does not indicate learning any actual lessons from other state initiatives.

The OPM Angle

From IHE:

ByProject Kitty Hawk will officially launch after the new year. System leaders plan an equitable revenue share between participating campuses, which will be “well below the rate typically charged by third-party providers.”

Will that be well below the cherry-picked 60% rate mentioned by system leaders, or the increasingly common 40 – 50% rate for MOOC-based / Lean OPM models, or some of the 20 – 30% rates that augment with fees? There is no answer yet on actual revenue share percentages, but my bet is that Kitty Hawk only intends to be well below 60%.

The services to be provided include the standard OPM areas: Market Demand analysis, Program Design, Technology infrastructure, Marketing, Enrollment advising, and Student Support. In my initial comments in the IHE article, I called out that $97 million is fairly low given the scope of 120 new programs and 24,000 net new students. Kitty Hawk plans desribe that organization’s role in the most expensive part of OPM work.

Kitty Hawk will handle all the marketing on behalf of schools and optimize marketing spend across the state to ensure minimal overlap and efficient cost of student acquisition

You can read that as confirming that the plans are overly aggressive, or you can read that as ‘by working across 16 universities we’ll be super efficient’.

Centralization or Collaboration

The IHE article and working document are not clear on how much this initiative aims to centralize online education – building up a new organization to execute the strategy – or to build up the system capabilities across all 16 universities. They actually say both.

The working papers depict a system with a uniquely ambitious vision for Kitty Hawk, which they say will provide “end-to-end support to help universities rapidly design and take workforce-aligned programs online as well as attract, enroll and support learners through graduation.” Kitty Hawk will rely on “a central technology and service infrastructure” to help UNC campuses reach working adults, in part, the working papers say, because it will be “less expensive than the traditional approach of more buildings, more personnel, and more programs … or [campuses] doing it themselves.”

Centralization and collaboration are not mutually exclusive, but it is clear from Smalley’s interview of individual campus leaders that there is no shared vision. Read the section on campus representatives refusing to comment or pointing out that UNC Online (a separate initiative) already helps the campuses to work together.

The biggest risk that UNC faces with Kitty Hawk is a subtle one that too often is at the center of centralize vs. collaboration discussions. Hubris. The staff of the new organization with $97 million of funding viewing themselves as ‘the smartest people in the room’. That risk killed many of the other state initiatives.

UNC system present Peter Hans doesn’t help in his comments.

Hans added that while some of the system’s universities already offer online programs targeted to adult learners, the current offerings do not engage them “nearly to the extent I think that we could and should be.”

He said Kitty Hawk classes will be high quality and more than “basically Zoom classes.” He hailed his senior vice president for strategy and policy, Andrew Kelly, who helped create the blueprint for Kitty Hawk after meeting and speaking with other system leaders and educational technology experts across the country about lessons learned from prior efforts.

I’m sure that existing programs could be improved, but it doesn’t help to imply that most are “basically Zoom classes” and then hail the Kitty Hawk leader.

This initiative is important, and I hope it pans out. But there are some troubling signs already with unrealistic goals and a lack of working with existing university efforts to both learn lessons from the past and form a basis for system collaboration.