‘Why do people go to university?” author B. Joseph Pine II asked a roomful of USC leaders.

It’s not for the ideas or the books or the classroom instruction, he said. It’s not even for the out-of-classroom encounters, though that’s getting a bit closer.

“It’s because they’re looking to be transformed.”

The renowned author and business consultant was the featured speaker at this year’s President’s Leadership Retreat, held Nov. 20. Some 400 USC managers gathered in the Ronald Tutor Campus Center ballroom that morning to listen and then brainstorm on the university’s place in what Pine has dubbed “the experience economy.”

The event doubled as the formal launch of The USC Experience initiative, a new push to integrate Pine’s business ideas into the fabric of Trojan life.

In a fast-paced presentation sprinkled with ingenious examples by retail “experience” wizards such as Starbucks, Apple and Progressive Insurance, Pine made a compelling case for doing things differently.

First published in 1999, Pine and co-author James H. Gilmore’s best-selling book The Experience Economy argues that providing goods and services is no longer enough in a digital-driven, global marketplace. Success today demands the staging of memorable experiences — the more authentic, immersive and richly textured, the better.

Every attendee at the leadership retreat received a 2011 revised edition of the book, along with the pamphlet, “Pine & Gilmore’s Field Guide for the Experience Economy.”

The customer is the product

President C. L. Max Nikias listens to keynote speaker Rick Caruso at the 2014 President’s Leadership Retreat. (USC Photo/David Sprague)

“Delivering the experiences that our stakeholders expect — and surpassing those expectations whenever possible — is paramount to USC’s viability and ascent,” USC President C. L. Max Nikias said in his introductory remarks, noting that “institutions of learning and health care both … are facing greater pressure than ever before.”

Unlike retailers, though, universities have the potential to go beyond staging experiences to actually guiding life-transformations, the top level of Pine’s experience-centered economic hierarchy. Or, as Pine put it: “The customer is the product.”

His point was driven home in a keynote address by USC Trustee Rick Caruso ’80, CEO of Caruso Affiliated, who has actively integrated lessons from The Experience Economy in his upscale retail properties, which include The Grove in midtown Los Angeles and The Americana at Brand in Glendale.

“What’s sold at The Grove can be found online and in a thousand other locations,” Caruso said. “The only thing that differentiates us is the experience and service we provide. Otherwise, retail is a commodity.

Rick Caruso discusses how quality service differentiates the good from the great. (USC Photo/David Sprague)

“In similar fashion,” Caruso added, “a great education can be found at hundreds of universities across the globe, and increasingly online. Competing on academics alone is no different than retailers competing solely on price. It’s a fool’s game.”

The USC Marshall School of Business alumnus was careful not to equate education and health care with retail.

“What we do on our properties cannot ever compare to saving someone’s life or opening someone’s mind,” he said. “While the predisposition of a university or a medical center rightfully and necessarily is toward the intellect, I also think we need to embrace the emotional, the social, the aesthetic — in short, the experiential. This will differentiate us.”

With a wink at signature features of his company’s lavish retail properties, he urged USC leaders to find “the educational equivalents of the hundred-foot Christmas tree and the dancing fountains.”

Caruso concluded his lunchtime talk with a startling analogy to Sears, once the No. 1 retailer in America with its headquarters in what was then the tallest building in the world. “And even from that vantage point,” Caruso said, “they never saw the competition coming. So it doesn’t really matter how high those Ivory Towers are, because even from that vantage point, as USC marches forward, they will never see us coming.”

Early adopters

Earlier in the day, participants had heard success stories from four areas of the university that have implemented “experience economy” practices.

Ainsley Carry is pushing USC Student Affairs to create a better experience for students and their parents. (USC Photo/David Sprague)

Ainsley Carry, vice provost for student affairs, described a new wellness initiative called “Prescription for Exercise” that is “packaging” existing separate student health services — delivered by physicians, counselors, nutritionists or fitness coaches — into one unified experience. Carry also has challenged his division to identify and eliminate “customer sacrifice” — for example, the inconvenience to Trojan parents living in other hemispheres of having to interact with USC administration on West Coast time, or the limited access to student services enjoyed by online students who, by rights, should receive full service for their tuition dollars.

Dan Stimmler, associate senior vice president of auxiliary services, described changes in both policy and staff training that have empowered his frontline hospitality workers to make case-by-case decisions to better customize guest experiences.

USC Roski School of Art and Design Dean Erica Muhl described her admissions team’s deliberately “experiential” approach to recruiting the inaugural class of the USC Iovine and Young Academy, which she directs.

Lastly, Scott Evans, CEO of Keck Medical Center of USC, described the new Patient Experience Department, which focuses on streamlining everything from scheduling appointments to parking, billing and follow-up, with an eye toward maximizing the “wow” factor.

“Today’s discussion is only the starting point,” Nikias said, in closing the retreat, “because we’re going to get very serious about improving the experience.”

He promised to hold follow-up meetings with senior administrators across the university, which in turn will lead to new initiatives from different divisions.

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