Illustration by Rose Wong

It’s no secret that theological education has been under sustained financial pressure for at least a decade. Declining enrollments and increasing fixed costs, particularly deferred maintenance and debt service, are creating persistent deficits. Philanthropy is an inconsistent source of support, and its proceeds are often restricted. Mergers are becoming more commonplace. Some institutions are closing.

So says David Rowe, Ph.D., in an In Trust Center webinar in March, part of the “Sustainable Pathways” initiative. Rowe suggested that the problem is not poor management or inattentive governance so much as a persistent reliance on a business model that is driven by schools’ insistence on what students need.

“As educators we have to let go of the idea that our value proposition springs from what we think that they need,” said Rowe, a former college president, interim seminary president, and trustee. “Start thinking more plainly about the economic value of the programming, the experience, or the transformation that we offer to students.”

Rowe cited the groundbreaking business disruption theories of Clayton Christensen, whose 1997 book The Innovator’s Dilemma remains among the most influential business texts of this century.

“Christensen posited that when people have money and they have a need, they’re not necessarily going to go buy a product or service. They’re going to hire a product or a service to do a job for them,” Rowe said.

“And if the value proposition doesn’t do the job, or if we fail to help the student realize we are doing the job that they want done, then we will not be able to engage them in a financial transaction. Ultimately, they get to decide.”

Rowe suggested that schools take a more customer-centric approach, acknowledging that there are both functional and social components to getting a job done.

“Functionally, the job may be ‘Help me become a pastor, help me become a chaplain,’” he said. “On the social emotional side, the jobs to be done might be something like ‘Help me follow my calling without losing my job’ or ‘help me become a pastor before I retire.’

“Think about that: If you’re late getting into a second career, you don’t necessarily want spend a long time getting an M.Div.,” Rowe said.

He suggested that schools do the difficult work of defining their customers, determining the jobs they are hiring schools to do, and then determining how to more effectively help the customer “do the job that they want done....”

Institutions may find multiple value propositions depending on which customer set they’ve identified, Rowe noted. In addition to traditional and non-traditional students, denominations, individual donors, and foundations also may be looking to hire a product or service to meet their specific needs.

“If we really want to be distinct in the market, we want to make sure that we double down on those experiences that really affect personal and professional transformation,” Rowe said.

Click here to view the webinar.