The more I work in American universities, the more I see their decision-making and leadership behind the scenes.

The more I learn about student-focused project-based learning connecting students’ lives to what the schools are trying to teach and move away from more abstract academic approaches, the more I see alternatives to the education I got that I think serve students’ and society’s interests more.

I care about students in schools like I care about customers in businesses: I view their needs and interests as paramount for guiding the organizations’ direction. Faculty matter, as do employees, the community, and others, but I expect the organizations that focus on the people they serve will succeed most.

Universities’ leadership lies with its tenured faculty, often untrained in managing organizations, and whose interests conflict between research, teaching, and their personal well-being.

Strategically, American universities seem to be moving to a higher-end, more comprehensive service. My undergraduate school, Columbia, used to be a commuter school. Now nearly all undergraduates and most graduate students live on campus in a sheltered community. It gives them a collegiate feel, which creates community and probably improves learning in some ways, but it comes with costs.

The first cost is cost. American universities cost a lot and are increasing their costs. You know this, and about student debts, and so on. I won’t belabor what you already know.

The next cost is that this protection separates them from the world. Campuses have flare-ups all the time that look to most outsiders that I know like issues that adults would handle but children blow up. Protesting the life-or-death issue of the draft during Vietnam made sense in a way that today’s protests don’t seem to match. I’m not saying they aren’t important. I’m suggesting that universities’ continuing nurturing of adults may prevent them from developing life skills.

I read a fascinating review from MIT Sloan business school on how Japan’s car manufacturers, especially Toyota, overtook the U.S. and European manufacturers, who dominated the world, to prepare to talk about American universities. (This article, “How Detroit’s Automakers Went from Kings of the Road to Roadkill,” is less comprehensive but is similar.)

The article may be behind a pay wall, but for two fields so wildly disparate, the summary seemed more applicable to American universities and their creeping up-market against the large and growing demand for basic education, like U.S. car manufacturers did for decades after WWII. More important, in my opinion, is the inability of management to see and act on solutions.

Of course differences between these different markets will overwhelm similarities, but the similarities are significant. Topmost are the strategy and decision makers’ inability to see and act as fast or effectively as competitors.

The big picture was that U.S. car makers went for high margins, low variety, standardization, doing everything they could in-house, accepting some low quality. Some Japanese copied them, but others had to compete other ways. Some of their top results included addressing lower-end consumers, flexibility, simplicity, and empowering employees more effectively, mainly by fostering cooperation between managers and line employees.

U.S. universities aren’t exactly like U.S. car companies were, but the big picture is similar. Does that leave them open to competition? If so, can they learn from history—not just top-down analyzing but in-the-field acting?

MIT-Sloan concluded with:

Improvement Must Be an Incremental, Continual, Integrated Effort.

There is a tradition in manufacturing dating from Adam Smith, but epitomized in Frederick Taylor and his principles of “scientific management,” that calls for managers to analyze and freeze a process, divide it into small pieces, then dictate to workers and suppliers their “piece” in the process. While management might introduce automated equipment or even radically new procedures, there is not much room on the manufacturing floor for creativity, innovation, or incremental improvement. Nor is there any recognition that workers and suppliers might participate more fully, for example, by inspecting their own work and maintaining their own equipment, operating more machines, or delivering supplies in smaller quantities but more frequently.

To a large degree Toyota and Taiichi Ohno built upon Taylor’s work in process analysis and Ford’s efforts to create an integrated, smoothly running mass-production system. But Toyota and other Japanese companies introduced a fundamental concept: continual rather than one-time improvement, achieved through successive process refinements and a greater integration of workers and suppliers into the production system.

To understand what happened in Japan it is important to understand the U.S. automobile industry. By the early 1960s, American managers viewed automobile manufacturing as a stable or “mature” technology, assuming certain limits to productivity, minimum efficient scales of production, unit costs, quality, and the ability of workers and suppliers to cooperate (or be coerced) and to contribute to improving production operations. The “American paradigm” — characterized by large production runs, push-type scheduling, high levels of automation and worker specialization, and large numbers of inspectors using statistical sampling — dominated the thinking and the goals of U.S. (as well as many European) managers.

There was nothing particularly wrong with this approach to manufacturing. It proved to be remarkably effective for high-volume production of a limited number of models. But market conditions and financial constraints in Japan after World War II presented an opportunity for Toyota and other Japanese auto producers to challenge convention and become equally or more efficient at far lower volumes.

Critical to the Japanese success in auto manufacturing was that managers such as Toyota’s Ohno did not accept U.S. practices as the only viable way to produce automobiles and did not believe that U.S. firms had reached their limits in capital and worker productivity, quality, or inventory turnover. There was nothing mysterious or miraculous about what Toyota and other Japanese automakers accomplished in manufacturing. They responded to specific market conditions, creatively applying techniques first developed in the U.S. in new ways. Ultimately, by seeking a better solution to a fundamental problem, the Japanese set new standards of efficiency and started a revolution in manufacturing theory and practice that has yet to end. While companies and management-labor relations have evolved differently in the U.S., the unique quality of Japanese workers in Japan can no longer be used as an excuse in the U.S. for a lack of efficiency, innovation, and improvement in manufacturing.

Top-down academic analysis—what university management does best and most—seems to lead to large, abrupt changes. This article suggests that strategy, or lack of, fails compared to incremental change involving people on the line.

In the case of universities, competition isn’t coming from foreign markets but from other sources. Online education is a big one. So is top students’ choosing to forgo college, finding it too expensive, too academic, and too separate from regular life.

Universities with huge endowments and alumni communities have huge assets that can help them, but so did U.S. car manufacturers for decades before they went bankrupt. Those assets also lead them to resist change.

Do Harvard, the Ivy League, and their peers dominate their market like GM did? Not close. The greater competition they face may help them improve faster, hopefully faster than their assets’ inertia slow them.

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