Clayton Christensen argues that theory of disruptive innovation could have solutions for colleges and universities
Whether or not you believe that higher education in its more traditional model is relevant for the students of tomorrow is moot, since higher education’s model (thanks to student loan debt, college and university debt, rising tuition costs, and a lousy economy) is currently in jeopardy.
A problem, explained Clayton Christensen, the Kim B. Clark Professor of Business Administration at the Harvard Business School, that can potentially be solved by looking at his creation, the “disruptive innovation” theory.
In short (you can read a more detailed account here) the disruptive innovation theory “describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.”
See Christensen’s video explanation here:
According to Christensen’s keynote during a recent Colgate University’s Innovation + Disruption Symposium, disruptive innovation transforms something that was once complicated and expensive into something more affordable and accessible to a whole new population of consumers; and it’s this innovation that essentially kills the leaders in the middle.
That’s because while Christensen could be talking about the examples in industry throughout the last decade where this theory proves true (Ford vs. Toyota; Digital Equipment Corporation vs. Apple; integrated steel mill vs. mini mills), he came to Colgate to talk about what’s happening with higher education…and how by understanding why other big leaders in industry were once sacked by the little guys, colleges and universities today could be saved.
(Next page: Saving higher education)
“If you as a little boy want to kill a giant by making a better product for better profits to the giant’s best customers, the giant will squash you,” explained Christensen. “But if you come in at the bottom of the market and pick a fight where the giant isn’t motivated to fight you for customers and will flee rather than fight, that’s the winning mechanism.”
A mechanism that’s currently happening through for-profits, career and technical, and many online universities today—by targeting those education consumers, such as adult and remedial learners, these higher education models are thriving.
However, the reason why they’re displacing traditional four-year college and universities and not merely supplementing them is a relatively new development, said Christensen.
“If you look at businesses like McDonald’s and hotels, the disruptive theory doesn’t really apply, and that’s because the theory needs to have a technological component to it. Recently, the technologies enabling online learning for higher education, coupled with the changes to the economy, are driving the mechanism.”
In other words, accessible technology + shaky economy = perfect storm for traditional higher education.
“Online learning and its cousins provide a technology core, allowing those entities entering at the bottom of the market to take over the giants,” he continued. “The question now is: ‘Is there something that can’t be displaced within a traditional university’s value offering?’”
3 key strategies
“I’ll be honest,” said Christensen, “within 10 to 15 years, half of the universities around today will either be liquidated or in bankruptcy.”
However, Christensen outlined three ways traditional college and universities, like his own Harvard Business school, could survive into the future:
1. Focus on professors.
During his keynote, Christensen related a story about another talk given at a university. After his lecture, a university official pointed out people in the audience, as well as board members, who gave substantial funds to the university. They were all alumni.
Intrigued, Christensen asked these members why they donated, and without fail, each mentioned a professor that changed his/her life.
“It didn’t matter if they were now a mathematician or financial analyst,” he explained. “It wasn’t about what was taught, but how the professor inspired them. However, after further investigation into Harvard Business School’s own alumni, it seems that the same 10 to 12 professors were cited again and again—that’s less than 1 percent of faculty.”
Christensen’s recommendation for colleges when recruiting faculty is to focus less on their publishing capabilities and expert knowledge of material, and more on their ability to connect to others.
“I predict that those universities that in a decade from now will be in turmoil will only see themselves survive another day because of the resources provided by loyal alumni,” he said.
(Next page: Stategies 2-3)
2. Understand why technology, like online learning, is disruptive.
Though online learning is the technological core driving disruptive innovation in higher education, Christensen said that most colleges and universities do not understand how the technology is transformative.
“Think about the radio,” he explained. “The radio was successful to my mother’s generation because of the quality of sound it was able to produce. For me and my generation, the portable radio was popular for a different reason: it’s accessibility, and therefore freedom away from a specific area.”
If the radio is higher education, and online learning the technology available to it, success of higher education doesn’t depend on improving the technology, it depends on how it is deployed and who it’s marketed to.
“It’s not about how can Harvard Business School’s technology be better than older technology, but more about reaching those previously unreached,” he continued.
3. Don’t try to change from the inside-you will fail.
A final example given by Christensen was when he was asked by the University of Phoenix to record his 10 most popular lectures to be distributed by students. Christensen, already aware of the power of “the little guy,” agreed.
“It was interesting, because the University of Phoenix rented out this beautiful lecture space at a nearby art institute, which had a huge bay window that would be my backdrop. I was told the University would find people to populate the lecture as it was recorded, and when I gave the lecture, I noticed all the people were incredibly beautiful…I found out later that they were hired models.”
As Christensen related the story, the models were used for moments when Christensen’s lecture became a bit dull—the camera would pan to the models who looked interested in what Christensen was saying, therefore motivating the attendee to keep watching.
Other tactics used by the University included background music that rose to a crescendo during the lecture’s key points.
“I realized that this wasn’t just providing a lecture online, it was a whole new model of presenting information,” he related.
Christensen concluded by saying that colleges and universities, once they understand that this different model is disruptive, shouldn’t try to change from within; but, rather, through offsets.
“If you’re a giant and you try to emulate a little guy, you’ll fail. But if you offer similar services like the little guy in an offset, you’ll do better,” he said. “One example of this is with mega department stores in the 90s—those that tried to offer cheaper goods to a wider consumer base by drastically changing their inventory ultimately failed. The one that survived was a large department store at the time called Dayton’s. Their offshoot store is known today as Target.”
Watch Christensen’s keynote, further commentary and full symposium: