Great Quotes: Disruptive Innovation

Many people put a great deal of faith in Clayton Christensen‘s theory of disruptive innovation. I do. The research is solid; as bulletproof as any business theory can be.

A few writers have applied the theory to higher education. (I’ve started a list of these authors, articles and books, below.)

One especially important aspect of the theory suggests that disruptive innovations tend not to come from established organizations. While large, well-run organizations may have the resources to generate innovations, their commitment to existing customers, focusing on improving existing systems, and unwillingness to pursue niche markets, stops them from investing sufficiently in new products and new markets. 

Robert Birnbaum applied this theory to the field of online higher education and came to the following conclusion:

“The logical conclusion of applying the theses of The Innovator’s Dilemma and The Innovator’s Solution to higher education may be that virtual education can thrive in traditional colleges and universities only if it operates outside their normal management and value frameworks, with the consequent risk of losing institutional control.”

Robert Birnbaum, Academe, Jan/Feb2005, Vol. 91, Issue 1

If it is uncommon for traditional organizations to produce disruptive innovations, the implications for universities are considerable. As of 2010, fewer people in the field of higher education are clinging to the notion that the traditional post-secondary model needs merely minor changes; modifications of its established model (what Christensen might define as “sustaining innovations”).  So what are the options?

Christensen suggests that it is possible for established organizations to create disruptive innovations by creating independent units within the larger organization. In order to be successful, however, these units need to be free of the larger organization’s control; they must be able to not only make their own decisions, but free to create an entirely new kind of organization. How feasible is this in the university sector? I’ve found remarkably little analysis of such efforts in universities. So it’s difficult to say just how successful this approach might be. The overall track record of innovation in higher education is, quite frankly, dismal. (For an excellent review of innovations in U.S. higher education, read William Tierney et al’s “New Players, Different Game” – see below).

Moreover, Christensen’s research suggests that the majority of new innovations come from new organizations. It may be possible for established organizations to create these independent units and to enjoy some success. But if you are placing a bet, you’re better off looking for new organizations that emerge from the periphery.

Tierney’s book points to the for-profit sector as an example of disruptive innovation. These organizations differ in important ways from traditional academia. They focus on under-served markets. They are designed to scale-up quickly, while traditional schools (particularly in the prestige category) equate limited enrollment with quality. Traditional universities have under-served adult students (the fastest growing segment of higher education) and approached online education as a “nice to have”, rather than a strategic opportunity.  For-profits took full advantage of this.

I agree with Tierney’s assessment of the for-profit sector; the sector fits quite neatly into Christensen’s model of disruptive innovation. But I also think that the for-profit sector is still figuring out how to realize its’ full potential. To a surprising degree, many for-profit schools have incorporated aspects of traditional higher education that serve neither their students or owners. There are new and better ways to deliver higher education that even these “disruptive” organizations have not identified or chosen to take advantage of. No doubt the residue of traditional academia is a by-product of the fact that many of the academic managers within these corporations come from traditional higher ed. And the regulatory hoops that for-profits are asked to jump through were set up by and for traditional higher education. Nevertheless, in order to fully realize their role as innovators I believe that further exploration of new approaches will reveal even greater opportunities. In other words, they can do better. Much better. I’ll post a few notes on this particular issue in the coming weeks. As always, I welcome your input.

(Author Interview Series) Clayton Christensen and Henry Eyring, The Innovative University

Ron Bleed. A Disruptive Innovation Arrives. EDUCAUSE Review, vol. 42, no. 1 (January/February 2007): 72–73.

Lloyd Armstrong, Changing Higher Education (Blog)

Tierney, William G. & Hentschke, Guilbert C. (2007). New players, different game: Understanding the rise of for-profit colleges and universities. Baltimore, MD: Johns Hopkins University Press

James J. Duderstadt. The Future of Higher Education in the Knowledge-Driven, Global Economy of the 21st Century, 2002.

Clayton Christensen and Michael B. Horn. Disrupting Class, 2008

Clayton Christensen and Sally Horn, Disruption in Education, Educause Review 2003

12 thoughts on “Great Quotes: Disruptive Innovation Leave a comment

  1. In their book “Seeing What’s Next: Using Theories of Innovation to Predict Industry Change,” Clayton Christensen, Scott Anthony and Erik Roth (HBS Press, 2004) have a chapter titled called “Disruptive Diplomas: The Future of Education,’ in which they foresee the disruptive changes being brought about by community colleges, online universities and for-profit colleges.

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  2. Accreditation protects higher education from disruptive innovation. Without the accreditation process, higher education would have changed over the last 50 years, like all other industries have. Accreditors are peer institutions beholden to old practices and fearful of disruption. Change will come to higher education only if/when states force public institutions to reinvent themselves (and operate with significantly smaller budgets) and private institutions go bankrupt, or if/when accreditors demand experimentation with new and lower cost delivery formats and accept the failures that come with any experiment.

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  3. Some folks who reside within public institutions seem to forget is they compete within a market for Education budget.

    Education consumers have a choice where they spend their education dollar. Competition breeds competitive response, disruption as it were. Public Institutions were somewhat immune to competitive forces in years past. With the emergence of private institutions and the proliferation of quality online programs, everyone is fishing in everyone else’s favourite fishing hole.

    Example: we are in Western Canada and have purchased Kaizen Training from an Institute in Denver… Go figure

    At the very least, Continuous Improvement initiatives need to be infused into the business side of education. Efficiencies will partially combat the inevitable block funding claw backs in the next few years.

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  4. Christoph – Thanks very much for the useful notes – very useful.

    I agree that accreditation bodies play a fundamental role in enabling innovation in the sector. (Although I’m not sure they view their roles in these terms.)

    Nevertheless, I’m optimistic.

    I see considerable innovation among the businesses that serve higher education, particularly among those that are looking for new ways to employ technology. Companies like Straighterline, Flat World Knowledge, 2Tor, and Virtual-TA have all found ways to rethink the value chain in higher education. Like others, I’m watching these and other companies closely to see what works and what doesn’t.

    Among colleges and universities I’m encouraged as much by what motivates their innovations as the innovations themselves. In the past, innovation in higher education was nicety, but not a requirement. Today, pressure from regulatory bodies/governments, sticker-shock among students/parents, and declining budgets is creating a true sense of urgency among institutions. Call me a cynic, but people don’t change unless (really) pushed. (Fun book on the subject of change: “Change or Die”.)

    The most thoughtful schools are moving beyond mere crisis management and using these rather extreme conditions as an opportunity to leap ahead of their competition. Some schools appear set to use technology as a vehicle to leapfrog their competition; defining themselves as leaders in “digital” (i.e. relevant, in sync with students, etc). In a market in which moving up the rankings is very slow and expensive, digital can serve as a relatively fast track to a competitive advantage.

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  5. Hi there Keith,

    We work with Arizona State where they have a spin off unit creating ASU online. They walk around with the Innovator’s Dilemma and Disrupting Class like start-up founders. It’s funny.

    I agree that for-profits follow Christensen’s model of disruption precisely. That’s why most of the successful IPOs in the past few years have been for-profits. According to Christensen, you have about a decade before for-profit completely eats non-profits. And then, a decade more and you’ll just have a bunch of empty buildings everywhere. Not sure I agree there, but scary…

    I have to say I haven’t been impressed with the number of IT leaders that seek out disruptive start ups and innovative small companies. At Inigral, we’ve become quite visible over the past year, but every time we talk to someone we get asked the same old questions you would ask established companies with established products in established markets. “Do you have any case studies? Can you tell me how you impact student retention?” Well… umm… we’re in our second year of operations and our second round of clients are just getting up and running. So, no. We can’t. We’re innovating. By nature, there’s no proof that it works.

    Anyway, hit me up when you cover innovative platforms. Would be happy to talk geeky product design, etc….

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  6. Gregg: Yes, it is easy to forget that education is a market. At the same time, though, education does not share all of the attributes common to most markets. The relationship between the buyer and seller is not as clear and direct as in consumer markets, for example. The “buyer” is not always the student; governments “buy” education through funding continued funding. And unlike other markets, the consumers (students) do not always have a great deal of choice. Policies on transfer of credits and residency requirements limit choice, for example. Nor do students know exactly what they are getting for their tuition (which is why higher education tends to focus on surrogates of quality, rather than outcomes). Note: Lloyd Armstrong describes the concept of surrogates of quality well, here: http://bit.ly/5pRbUN

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  7. I guess what the core of my thinking is on this is that many school leaders look at their school programs from a feature based, self centered approach. Education is largely and outcomes based field. Many school leaders forget students are passing through to a greater outcome.

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  8. Michael. Thanks for this. The tendency for established companies to want to see evidence that new products and services “work” is both amusing (because it’s often contradictory) and predictable. Maybe we are in a transitional stage, in which we are still learning to accept the higher levels of risk that are necessary in order to support innovations. I attended a talk recently in which Roger Martin (one of the proponents of “design thinking”) argued that we need to rid ourselves of the phrase “prove it”.
    I checked out Inigral; looks great. If the IT forecasts are correct, “lighter” applications like yours will become increasingly popular.

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