Disrupting College

Disrupting CollegeHow Disruptive Innovation Can Deliver Quality and Affordability to Postsecondary Education

Michael B. Horn | [email protected] | Twitter: @christenseninst

Clayton christensen institute@christenseninst

The struggles facing colleges & universities


Chorus questioning higher ed’s qualityWhat do students learn?

• Study of 2,300 undergraduates at two dozen universities who took the Collegiate Learning Assessment

• 45% demonstrated no gains in critical thinking, analytical reasoning, & written communications during first two years

• 32% did not typically take courses with more than 40 pages of reading per week

• 50% did not take a single course in which they wrote more than 20 pages


America’s degree edge is slippingPercentage of students with postsecondary degrees by age group

55-64 45-54 35-4425-34 All (25-64)

CLAYTON CHRISTENSEN INSTITUTE# christenseninst

Job mismatch paradox

• 3.6 million job openings for which employers say they can’t find qualified employees

• 49% of US employers struggle to fill vacant jobs because of lack of talent, compared to 34% globally


E < T + G + I + C + MTraditional college business model is breaking

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Private Four-Year Public Four-Year Public Two-Year


What is disruptive innovation?


Perf

orm

ance

Time

Disruptive Innovations

Time

Sustaining innovations

Incumbents dominate sustaining battles

Entrants typically win at disruption

Customer ability to use

improvements

Pace of technological

improvement

45% margin on$250,000

40% margin 20% margin on $2,000

60% margin on$500,000

Perf

orm

ance

Sustaining vs. Disruptive Innovation


Disruption = affordability, accessibilityPast and present examples

Yesterday• GM• Dept. Stores• Digital Equipment• Delta• JP Morgan• Xerox• IBM• Cullinet• AT&T• Sony DiskMan

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

CLAYTON CHRISTENSEN INSTITUTE@christenseninst

Disruption of Toyota

From hyundaiusa.com May 5, 2013


Disruption = affordability, accessibility

Yesterday• GM• Dept. Stores• Digital Equipment• Delta• JP Morgan• Xerox• IBM• Cullinet• AT&T• Sony DiskMan

Past, present, and future examples

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

Tomorrow• Chery• Internet retail• Smart phones• Air taxis• ETFs• Zink• Linux• Salesforce.com• Skype• Smart phones


• Is the innovation targeting people who are nonconsumers or overserved by existing products?

• Is the innovation not as good as existing products as judged by historical measures of performance?

• Is the innovation simpler to use, more convenient, and more affordable?• Is there a technology enabler that can carry the new value proposition

up-market?• Is the technology paired with a business model innovation that allows it

to be sustainable?• Are existing providers motivated to ignore the new innovation and not

threatened at the outset?

How to identify a disruptive innovationDisruption is a relative phenomenon


How does disruptive innovation relate to education?


Where does disruption not apply?Industries without an upwardly scalable technology are not disrupted


Disruption in higher ed is just beginning


Perc

enta

ge o

f col

lege

stud

ents

taki

ng a

t le

ast o

ne o

nlin

e co

urse

, div

ided

by

stud

ents

who

did

not

take

an

onlin

e co

urse

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20190.01

0.1

1

10

Substitution follows the S-curve patternLinear S-curve logarithms indicate growing online learning adoption

50% all students take at least 1 course online

by 2015


What are online learning’s potential new value propositions?


Potential benefits of online learning

Personalization


Learning environments modeled upon factoriesCurrent system was built to standardize


The “Swiss-cheese problem” in educationStudents develop holes in their learning


Different learning needs at different times

Long-term Memory

Declarative

Episodic Semantic

Procedural

Skills Habits


Personalization through modularityBenefits of online and blended learning


Sound learning design boosts student outcomes

Student achievement in online courses when administered by faculty in core

4.6

Student achievement in traditional classes taught by faculty in core

5.6

Student achievement in online courses when administered by focused online faculty

5.7



Personalization Data and Feedback


Deliver content to students

Testing & assessment

Progress to next grade, subject, or body of

material

Receive results

Fixed-time, variable learning


Offer learning experiences to

students

Testing & assessment

Receive real-time interactive feedback

Progress to next body of material

Learning is fixed and time is variableCompetency-based learning



Individualization Teacher Effectiveness

Data and Feedback


Disaggregated staffing models

Teacher

Rigor Faculty

Relationship Faculty

Relevance Faculty

DisciplineFaculty

New opportunities:• Teacher specialization • Extend the reach of best teachers• Career growth opportunities


Benefits of online and blended learning

Teacher EffectivenessIndividualization

Data and FeedbackCost Control


How do existing organizations survive disruption?


Disruption is not a technology problem

Per

form

ance

Time

Time

Diff

eren

t Mea

sure

of P

erfo

rman

ce

Tabletop Radios, Floor-standing TVs

Path taken byvacuum tube

manufacturers

Pocket radios

Portable TVs

Hearing aids


What is a business model?And why does it lock us in?

PROCESSES:

Ways of working together to address recurrent tasks in a

consistent way: training, development, manufacturing,

budgeting, planning, etc.

REVENUE FORMULA:

Assets & fixed cost structure, and the margins & velocity

required to cover them

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


What is a business model?And why does it lock us in?

PROCESSES:

Ways of working together to address recurrent tasks in a

consistent way: training, development, manufacturing,

budgeting, planning, etc.

REVENUE FORMULA:

Assets & fixed cost structure, and the margins & velocity

required to cover them

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

Business units don’t evolve.Corporations do.








Much amuck about MOOCsAre MOOCs a disruptive innovation?

@christenseninst

Disrupting CollegeHow Disruptive Innovation Can Deliver Quality and Affordability to Postsecondary EducationMichael B. [email protected]

Twitter: @christenseninst


How do existing organizations survive disruption?


Understanding how users experience life

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


Three levels in the architecture of a Job

What’s the job-to-be-done? (Each job has functional, emotional & social dimensions)

What experiences in purchase & use must we provide to do the job perfectly?

What and how to integrate?


Recommendations for existing institutions

Strategic Focus 1 → Focus, differentiate→ Frame online learning as sustaining

innovation to disrupt class→ Apply correct business model for Job

Strategic Focus 2→ Discovery-driven approach

→ Test & learn→ Apply correct business model for Job→ “Capabilities exchange”


The danger of trying to be all things to all people


3 different kinds of business models

Solution Shops Value-Adding Process Businesses

Facilitated User Network

• Diagnose and solve unstructured problems

•Add value to something that is incomplete or broken

• Enable exchange among participants

• Fee for service • Fee for outcome • Fee for transaction or membership; ad-

supported


Polishing Dept.Turning machines

Hobbing departmentTapping equipment

Boring machines

Annealing furnace

Shi

ppin

g D

epar

tmen

t

Cut-offsaws

Path

take

n

by p

rodu

ct A

A st

arts

her

e

Pat

h ta

ken

by p

rodu

ct

B

B starts here

Storage


The Maysville plant


The danger of trying to be all things to all people


General purpose products disrupted job-by-job

Per

form

ance

Time

Time

Diff

eren

t Mea

sure

of P

erfo

rman

ceMajor Metropolitan Newspapers Help me:• Unload this stuff• 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 ListAutoTrader.comRealtor.comMonster.comMetro; Blackberry CNN.comUnwind at the end of the day


Harvard Business School is being disrupted

Per

form

ance

Time

Time

Diff

eren

t Mea

sure

of P

erfo

rman

ce

$150,000 !!

Part-time MBA

Online “Garbage”

2-year MBA

Corporate Universities:

Competing against

nonconsumption

Help me solve this problemTeach me what I need to know to become a great managerGive me the credentials I need to get the next, more lucrative jobHelp me switch careersHelp me join a prestigious network• Brand• Connections


The rise of unbundling


The right product architecture? It depends…

Compete by improvingspeed, responsiveness and customizationP

erfo

rman

ce

Time

Compete by improvingfunctionality &

reliability

IBM Mainframes, Microsoft Windows

Proprietary, interdependent architectures

Dell PCs, LinuxModular open architectures


Integration: Rise of the corporate university


Modularity and targeted partnerships


Integration shifts impact on computer industryEquipment

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 assemblers

1960 - 1980 1980 - 1990 1990 - 2000

Dell

IBM

Con

trol D

ata

Dig

ital E

quip

men

t

Monsanto, Sumitomo Metals, Shipley, etc.

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

App

le C

ompu

ter

Micro-Center


Modularity of the university


How future universities may be built

Unit of accreditation: The institution

Unit of accreditation: the course

A different type of university

Standards:thru course acceptance


Dell AsusTek

Outsourcing can set disruption in motion

Mother boards

Computer assembly

Supply chain& logistics

Product design

Brand

Simple circuit boards

Mother boards

Computer assembly

Supply chain& logistics

Product design

Brand


The new kids on the block


Benefits of blended learning for teachers

1. Eager students2. Better information3. Team teaching4. Extended time with

students5. Individualized PD plans6. Motivate hard to reach

kids7. More leadership roles8. More earning power9. Focus on deeper learning10. New options to teach at

home

Source: Digital Learning Now!


Improved conditions• Reduced isolation and new

opportunities for collaboration

• Better student data• Time efficiency• Less grading and busy work• Role differentiation

Source: Digital Learning Now!








How to identify a disruptive innovationDisruption is a relative phenomenon

Disrupting College

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