5/21/2015Copyright Clayton M. Christensen1 Disruptive Innovation in Education Clayton Christensen...

04/18/23 Copyright Clayton M. Christensen 1

Disruptive Innovation in Education

Clayton ChristensenHarvard Business School

February, [email protected]


Disruptive Innovations create asymmetric competition

Non-c

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measu

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f Perf

orm

ance

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Disruptive

Innovations:

Competing

against

non-consumption

Per

form

ance

Time

Sustaining innovations

Incumbents nearly always win

60% on$500,000

45% on$250,000

40% on $2,000

20%

Performance that customers

can utilize or absorb

Entrants nearly always win

Pace of performance

improvement


7%

4%

Quality of m

inimill-produced steel

12%

8%

18% 22%

% of tons

Ste

el

Qu

alit

y

19801975 1985 1990

Rebar

Angle iron; bars & rods

Structural Steel

Sheet steel

25–30%55%

Beat Competitors with Asymmetry of Motivation

Quality of in

tegrated mills

’ steel


Disruption in business models has been the dominant historical mechanism for making things more affordable and accessible.

Today• Toyota• Wal-Mart• Dell• Southwest Airlines• Fidelity• Canon• Microsoft• Oracle• Cingular• Community

colleges

Yesterday• Ford• Dept. Stores• Digital Eqpt.• Delta• Hamilton• Xerox• IBM• Cullinet• AT&T• Land-grant

universities.

Tomorrow:• Chery• Internet retail• RIM Blackberry• Air taxis• ETFs• Zink• Linux• Salesforce.com• Skype• U. of Phoenix

OnLine


What is a business model, and how is it built?

THE VALUE PROPOSITION:

A product that helps customers do more effectively, conveniently & affordably a job they’ve been trying to do

RESOURCES:

People, technology, products, facilities, equipment, brands, and cash that are required to deliver this value proposition

to the targeted customers

PROCESSES:

Ways of working together to address recurrent tasks in a

consistent way: training, development, manufacturing,

budgeting, planning, etc.

PROFIT FORMULA:

Assets & fixed cost structure, and the margins & velocity

required to cover them


Market Understanding that Mirrorshow Customers Experience Life

“The customer rarely buys what the company thinks it is selling him” - Peter Drucker

http://images.google.com/imgres?imgurl=http://www.jalopnik.com/cars/assets/resources/2006/12/2008-Chevrolet-Malibu-TOP-BIG.jpg&imgrefurl=http://jalopnik.com/cars/detroit-auto-show/detroit-auto-show-preview-chevy-malibu-were-not-through-with-you-224988.php&h=466&w=699&sz=105&hl=en&start=0&um=1&tbnid=E2nLWW4m3hBrBM:&tbnh=93&tbnw=139&prev=/images%3Fq%3Dchevy%2Bmalibu%26svnum%3D10%26um%3D1%26hl%3Den%26rls%3DGGIC,GGIC:2006-14,GGIC:en


• When companies segment their markets by job, they find

– Their real competitors aren’t in their product category

– The market is much larger, and their share is smaller

– Growth potential is greater, because non-consumption is usually a major competitor

– They understand what keeps more customers from hiring their product for the job(s).

– They can create valuable brands inexpensively.


• What is the fundamental job or problem the customer is facing? This includes its functional, emotional and social dimensions.

– What are the experiences in purchase and use which, if all provided, would sum up to nailing the job perfectly?

• The “HIRING CRITERIA” – The factors that constitute the basis for choosing one “job candidate” over another.

- What are the product attributes, technologies, features, etc. that are needed to provide these experiences?

Three levels in the architecture of a job


Products and business models that focus on doing an important job seem able to

sustain differentiation

• Ikea

• Blackberry

• Federal Express

• Milwaukee Sawzall

• OnStar

• Disney World

• Land Rover

• Palm

• Starbucks

• Ebay


Disruption of General-Purpose Products Typically Happens on a Job-by-Job basis

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Disruptive

Innovations:

Competing

against

non-consumption

Per

form

ance

Time

Sustaining innovations

Pace of performance

improvementMajor Metropolitan Newspapers Help me:

• Unload the junk in my garage

• Find the right car

• Sell or buy a home

• Find the right job, or the right employees

• Kill commuting time productively

• Become well-informed

• Unwind at the end of the day

Craig’s List

AutoTrader.com

Realtor.com

Monster.com

Metro; Blackberry CNN.com

Unwind at the end of the day


The Harvard Business School is Being Disrupted

Time

Time

2-year MBA

$150,000 !!

Part-time MBA

On-line Garbage

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orm

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Corporate

Universities:

Competing

against

non-

consumption

Help me solve this problem

Help me be an effective manager

Give me the credential I need for my next job

Help me switch careers

Teach me how to analyze business problems

Give me a prestigious brand and connections in an exclusive network


So what should theHarvard Business School Do?


The right product architecture depends upon the basis of competition

Compete by improvingspeed, responsiveness and customization

Per

form

ance

Time

Compete by improvingfunctionality &

reliability

IBM Mainframes, Microsoft Windows

Proprietary, in

terdependent archite

ctures

Dell PCs, LinuxModular o

pen architectures


Modular Archite

ctures

Per

form

ance

Time

Interdependent Archite

ctures

Integrated companies with proprietary products typically commoditize their suppliers

CommoditizerIBM

CommoditizeeApplied Magnetics

General Motors Dana Corp.

P&G Dow Corning


Per

form

ance

Disruption is facilitated when historically valuable (and expensive) expertise becomes commoditized

Experimentation& problem-solving

Pattern Recognition

Rules-Based


In B2B markets, the buyer’s job-to-be-done typically is not to enhance capability, but to reduce cost or improve ROA. This creates

opportunities to disrupt from the bottom of the supply chain.

Asus Dell

Small boards

Mother board

Assembly

Supply chain

Design

BrandBrand

Design

Supply chain

Assembly

Mother board


The Commoditization of Expertise is Widespread.

Commoditizer Commoditizee

Business Professors

Bloomberg

Physicians

Orthopedic SurgeonsImplant Makers

Diagnostics

Wall Street Analysts

HBS Publishing


Insights from examining education through the lenses of this research

1. Education research has not shown the way forward2. Conflicting mandates in the way we teach vs. the way

we learn3. Computers have failed to make a difference because

we have crammed them into conventional classrooms• They must initially be deployed against non-consumption

4. Individualized, computer-based instruction requires a disruptive distribution model

5. Chartered schools are heavyweight teams, not disruptive competitors

6. We have imposed disruption on our schools three times in recent history by moving the goalposts – the metrics of improvement.


We all learn differently

Linguistic

Logical- mathematical

Spatial

Bodily- kinesthetic

Musical

Interpersonal

Intrapersonal

Naturalist

Lea

rnin

g S

tyle

s

Mu

ltip

le I

nte

llig

ence

s

Visual

Written

Aural

Playful

Deliberate Pac

es o

f L

earn

ing

Fast

Medium

Slow


Conflicting mandates in the way we must teach, vs. the way students must learn

Need for customization for differences in how we learn

Stan

dard

ization !! L

earn

ing

Sty

les

Pac

es o

f L

earn

ing

Mu

ltip

le I

nte

llig

ence

s

Interdependencies in the teaching infrastructure

Temporal

Lateral

Physical

Hierarchical Cu

stom

izat

ion

!!


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Pocket radios

Portable TVs

Hearing aids

Tabletop Radios, Floor-standing

TVs

Path taken byvacuum tube

manufacturers

Technology can only be deployed in existingbusinesses in ways that sustain (and addcost to) the current model. Disruption bestcompetes against non-consumptionat the outset.


Historically, most schools have “crammed” computer-based learning into the blue space

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Per

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Core curriculum

Path taken bymost schools,

foundations and education software

companies


School boards have been moving “Up-Market” to focus limited resources in the “new” trajectory of improvement

Time

Imp

ort

ance

o

f p

rog

ram

Time

German

Statistics

Psychology

Economics

Math

Science

English language & literature


This is a perfect opportunity to implement computer-based learning disruptively

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Computer-

based learning:

Compete against

non-consumption

Po

litic

al im

po

rtan

ce

of

pro

gra

m

Time

German

Statistics

Psychology

EconomicsEnglish language & literature

Science

Math


The substitution of one thing substitutes for another always follows an S-curve pattern

% new

.001

.0001

.01

0.1

1.0

10.0

% new% old

09 11070503

25%

50%

13 15


Proper team structure is crucial in every project

Business model in which product is used

Product architecture: What are the components, and which ones interface with others?

Change the specifications for how components must fit together

Improve performance of each component

Business model in which process is used

Process architecture: What are the steps in the process, and what is their sequence?

How must the steps in the process interface in time and space?

Improve individual steps in the process

Product Process Team Type

Lev

el o

f ch

ange

VP VP VP VP

Autonomous

VP VP VP VPHeavyweight

VP VP VP VP

Lightweight

VP VP VP VPFunctional


Disruption enables less-skilled peopleto do more sophisticated things

Disruptive innovations enable a larger population of less-skilled, less-wealthy people to do things in a more convenient, lower-cost setting, which historically could only be done by specialists in less convenient settings. Disruption has been one of the fundamental causal mechanisms through which our lives have improved.

• Computers

• Xerography

• Angioplasty

Almost always, disruptive innovations such as these have been ignored or opposed by the leading institutions in their industries for perfectly rational reasons.


Changes in integrality/modularity have profoundly changed the structure of the computer industry

Equipment

Materials

Components

Product design

Assembly

Operating system

Applications software

Sales & distribution

Field service

Intel, Micron, Quantum, Komag, etc.

Compaq, Dell, Gateway, Packard Bell

Compaq

Microsoft

Word Perfect, Lotus, Borland, etc.

CompUSA

Independent contractors

Microsoft

Contract assemblersContract assemblers

1960 - 1980 1980 - 1990 1990 - Present

Dell

IBM

Co

ntr

ol D

ata

Dig

ital E

qui

pm

ent

Monsanto, Sumitomo Metals, Shipley, etc.

Teradyne, Nikon, Canon, Applied Materials, Millipore, etc.

Ap

ple

Com

pute

r

Micro-Center


Modular Archite

ctures

Per

form

ance

Time

Interdependent Archite

ctures

When an industry’s value chain dis-integrates,assemblers of modular products must begin outsourcing.

Their suppliers then can commoditize their customers

Commoditizer Commoditizee

Implant Makers Orthopedic Surgeons

Bloomberg Wall Street Analysts

Diagnostics Physicians

HBS Publishing Professors


Anomaly

ConfirmPredict

The process of building bodies of understanding

Observe, describe & measure the phenomena

Categorization by theattributes of the phenomena

Preliminarystatements ofcorrelation

Ded

uctiv

e pr

oces

sInductive process


Anomaly

Confirm

Inductive process

The predictive power of theory improves markedly when careful researchers move beyond statements of correlation to statements of causality.

Anomaly

ConfirmPredict

Categorization by theattributes of the phenomena

Preliminarystatements ofcorrelation

Ded

uctiv

e pr

oces

s

Inductive processObserve, describe & measure the phenomena

Predict

Ded

uctiv

e pr

oces

sObserve, describe &

measure the phenomena

Categorization of thecircumstances in which we

might find ourselves

Descriptive theory

Normative theory

Statementof causality

5/21/2015Copyright Clayton M. Christensen1 Disruptive Innovation in Education Clayton Christensen...

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