The University of Phoenix, John Sperling’s brainchild, is the centerpiece of the Apollo Group, a large and rapidly growing corporation that not only has made Sperling and his investors wealthy but that is also transforming the face of higher education. This publicly traded corporation has brought professional education to many thousands of adults who otherwise would not have had the chance to pursue advanced degrees. With campuses all across the Americas and parts of Europe, the University of Phoenix is fast becoming the world’s largest provider of academic programs to adults. The university also has become known as a pioneer of “distance learning” through its on-line course offerings. In these and many other ways, Sperling’s creation is a trendsetter in a field that often resists change and innovation. And the business is highly profitable, as the rising price of its shares in the midst of a brutal bear market attests.
Because change—and especially market-driven change—does not come easily to the education establishment, Sperling has had to fight many battles to bring his concept to reality. He has been vilified by the higher education community as a crass opportunist, and he is forever waging trench warfare on the political front to get Phoenix its necessary approvals and accreditations. These fights have left Sperling angry yet wholly undeterred. “I hated the bastards,” he told me, referring to the higher education establishment that tried to block his business plans. He has learned to be “utterly indifferent to disapproval”: “So I didn’t give a goddamn what the professoriat or the establishment thought about me. I thought they were a bunch of idiots anyway. Not idiots, but they were a bunch of people who were unthinkingly defending their own turf without enlarging their vision of what education should be.”
Sperling gets especially incensed when he speaks about a time when the higher education lobby succeeded in stopping Apollo from starting a trade-school business. This was his attempt to bring Phoenix-type instruction to the economically disadvantaged, and he was defeated because he could not prevent a sizable number of these students from dropping out. This opened his trade-school business to criticism that it was not meeting Department of Education regulations, a criticism that Sperling feels was exploited at the expense of the many disadvantaged students who had stayed in and were well served by the school: “The higher education establishment demanded the same metrics for these lower orders as you have at a state university. They’re immoral, heartless sons of bitches, and I think they know not what they do. They are so absolutely tunnel-visioned, and their desire to help the lower orders is zero, absolutely zero.”
Nevertheless, despite all the friction and hard feelings, Sperling is slowly winning over the higher-education establishment. A recent issue of Dean and Provost, a newsletter for traditional college administrators, lauded the University of Phoenix for its innovative approach to learning. It noted that the university’s approach has much to offer the adult students who constitute its primary market. The article points out that when the university was founded in 1976, it was “revolutionary.” Most institutions of higher learning at that time ignored the adult market entirely. “There were few, if any, night classes, accelerated programs, or programs offering credit for learning outside the classroom. No one talked about customer service for any students.” The article concludes that one of the “lessons learned” from Sperling’s revolutionary approach is that “competition in any form may lead to a re-evaluation of your institution’s programs and services. And that’s a good thing for students.” Such favorable recognition by the very establishment that the University of Phoenix long fought represents a major victory for Sperling and his Apollo group and is a testimony to the value of his creative achievement.
How did Sperling do it? He began with a philosophy of education based on three principles, each with moral overtones: (1) everyone who wants an advanced education deserves a chance to pursue one, (2) people learn best through community, and (3) learning is what makes people human. Sperling has “absolute moral certainty” about these principles, and they form the basis of his creative vision.
The belief that everyone deserves the chance to pursue an advanced degree led Sperling to develop professional programs for working adults. This turned out to be a brilliant marketing strategy as well as a matter of principle: at the time, working adults were an underserved part of the student population, and they could afford to pay for courses that would further their careers. Sperling’s idea that people “learn effectively and joyously if they are part of a learning community” led him to develop an innovative peer-group approach to higher education, which is now admired in the field. In the University of Phoenix model, every student becomes a member of a study group, and half of all assignments are done by the group as a whole rather than by the individual student. The concept that learning is what makes people human motivates everything that Sperling does. He told me that promoting this principle is the best way to avoid the Hobbesian nightmare of living lives that are nothing more than “short, nasty, and brutish.”
Sperling’s morally backed philosophy not only generated this innovative approach, but it also helped him sustain it in the face of withering attacks and, even more problematic from a business perspective, absolute skepticism on the part of the investment community. “I couldn’t get anyone to give me a dime,” he recalled. “No venture capitalist would give me the time of day.” So Sperling started with $26,000 of his own savings. “I knew I felt alone—I was alone.” But he also remembers never feeling discouraged or intimidated: “I just felt that it was a very steep hill to climb.”
On his way up that hill, Sperling encountered unusually vicious headwinds, even when compared with today’s competitive business climate. Not only was his company under attack from its competitors (in this case, the nonprofit colleges and universities) but also from their allies in the government and the press. Sperling was personally excoriated every step along the way—for selling out, for cheapening a noble profession, and for doing away with treasured academic practices such as tenure and full-time faculty. Commonly described as a “diploma mill,” Sperling’s university was roundly condemned for lacking traditional assets such as a big campus with libraries and gyms.
But his approach had little to do with the physical plant. Sperling wanted his courses to be offered in places and at times that best suited his students. He realized that courses taught locally in the evenings would give working adults far greater access than they could have found in most of the college campuses at the time. And he was early in recognizing that excellent library access can be found on-line.
Sperling also was more concerned about the content of courses than about the composition of his faculty. He realized that if he hired working professionals to teach his courses, he would gain the flexibility to offer standardized curricula with learning objectives carefully crafted to his students’ needs. Expert consultants could develop courses that a part-time faculty would be glad to teach. In this manner, Sperling placed the student—rather than the faculty member—at the center of his instructional agenda. Although this strategy evoked the wrath of the professoriat, it had obvious appeal to the consumer-savvy, self-starting adults who are Sperling’s primary student market.
On the management front, Sperling emphasizes truthfulness and free speech, moral values that he has shown to have great practical importance. He is careful to cultivate these values in all his employees, so that he can then trust them to represent the company with integrity when they attain positions of leadership. “You have to teach them to tell the truth,” he says, indicating that this is not as straight a shot as it might sound. “The truth is very, very painful most of the time. And you just say, you can’t tell different things to different people.” Truth goes hand in hand with free speech, which Sperling has written into his company’s core ethical charter: “It’s announced every year, reaffirmed every year, and we expect all employees to have a card with the free speech ethic in their cubicle, in their office, so that everyone is constantly made aware of it.”: He continues: “We have a free speech policy in all these companies, so that anyone can talk to anyone about anything at any time. And if they can’t, we have a mechanism called ‘Comments to the Chairman,’ and if any employee feels his or her voice is being restricted in any way, they just write me a letter or leave me an e-mail or a voice mail. And you can get fascistic elements out of the company pretty fast.”
The management result of all this is an institutionalized sense of honesty and trust that fosters experimentation and open feedback. This atmosphere makes possible the kind of orderly change that has made the university a symbol of bold progress within higher education. Because Sperling takes such pains to cultivate honest exchange among his employees, he looks to them first for promotions within the company—a sign of trust that further enhances employee morale: “We’ve got something like 110 campuses now across the country, and there’s a great sense of security when you send loyal employees out to start a new one. You don’t have to worry about it. They know how to do it. They’ll do it. In running all these controversial companies for twenty-five years now, no employee has ever gone to the press with horror stories or anything like that. So you have to have absolute integrity within the company so that there’s no doubt what the ethics are.”
Dean and Provost, March 2003, pp. 7–10.