Disrupting Class:: How Disruptive Innovation Will Change The Way The World Learns

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10/15/09 Copyright Clayton M. Christensen

Disrupting Class:
How Disruptive Innovation Will Change the
Way the World Learns
Michael B. Horn
December 3, 2009
mhorn@innosightinstitute.org
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Sustaining and Disruptive Innovations
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Incumbents nearly always win
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Disruptive Innovations create asymmetric competition
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45% on
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can utilize or absorb
Entrants nearly always win
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Copyright Clayton M. Christensen
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
Apple iPod
Yesterday
Ford
Dept. Stores
Digital Eqpt.
Delta
J P Morgan
Xerox
IBM
Cullinet
AT&T
State universities
Sony DiskMan
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Disruption of Toyota
Copyright Innosight Institute, Inc.
11/05/09 Copyright Clayton M. Christensen 10
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
Apple iPod
Yesterday
Ford
Dept. Stores
Digital Eqpt.
Delta
J P Morgan
Xerox
IBM
Cullinet
AT&T
State universities
Sony DiskMan
Tomorrow
Chery
Internet retail
RIM Blackberry
Air taxis
ETFs
Zink
Linux
Salesforce.com
Skype
Online universities
Cell Phones
Centralization followed by decentralization: Computing
The decentralization that follows centralization
is only beginning in education
Takes root in a new ring because it is better than nothing, or
basis of competition has shifted to convenience and
customization
Customers or applications get pulled into the new ring or
adopt the low-end solution when performance of the product
or service becomes good enough to do the job. The disruptive
technology does not invade the inner circle
Recessions often accelerate the disruptive devolution of an
industry
Customers rarely go back toward the middle
Important characteristics of Disruption
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Pocket radios
Portable TVs
Hearing aids
Tabletop Radios,
Floor-standing TVs
Path taken by
vacuum tube
manufacturers
Expensive failure results when disruption is framed in
technological rather than business model terms
The pursuit of revenue and differentiation in sustaining competition
amongst similar business models generally adds cost
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Costs in higher education
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E
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Clayton M. Christensen
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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 is the fundamental job or problem the
customer is facing? This includes its political,
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?
- What are the product attributes, technologies, features, etc. that are
needed to provide these experiences?
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Disruption of general-purpose products
happens on job-by-job basis
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Major 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
Craigs List
AutoTrader.com
Realtor.com
Monster.com
Metro; Blackberry
CNN.com
Unwind at the end of the day
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The Harvard Business School is being disrupted
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$150,000 !!
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Help me solve this problem
Teach me what I need to know to
become a great manager
Give me the credentials I need to get
the next, more lucrative job
Help me switch careers
Help me join a prestigious network
Brand
Connections
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So what should the
Harvard Business School Do?
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Disruption is facilitated when historically valuable
(and expensive) expertise becomes commoditized
Experimentation
& problem-solving
Pattern Recognition
Rules-Based
Focus on a job to be done defines proper
integration vs. inefficient integration
Ikea vs. Levitz Furniture
iPod / iTunes vs. Kazaa
Best Buy-Geek Squad vs. Costco
Take Care-Walgreens vs. Doctors office
Corolla
Camry
Avalon
4-Runner
Tundra
Toyota
Tacoma
Sienna
Cobalt
Malibu
Impala
Trailblazer
Colorado
Avalanche
Uplander
Chevrolet
Focus on product categories leads to feature
proliferation and undifferentiated products
Who are our customers?
Which elements of our presently integrated
system are actually tangential to their job-to-
be-done? Which ones must be integrated into
the core experience?
What jobs do they hire institutions of
higher education to do?
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We all learn differently
Multiple intelligences
- Linguistic, Mathematical, Kinesthetic
Motivations/interests
Learning Styles
- Visual, aural, playful, deliberate
Depends on subject/domain
Research in practice
- Scientific Learning
- Universal Design for Learning/CAST
- K12, Inc.
- All Kinds of Minds
Talents
- Giftedness is fluid
Aptitudes
Different paces
- Fast, medium, slow
Ongoing cognitive
science research
- fMRI scans
The right product architecture
depends upon the basis of competition
Compete by improving
speed, responsiveness
and customization
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Compete by improving
functionality &
reliability
IBM Mainframes, Microsoft Windows
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Dell PCs, Linux
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Conflicting mandates in the way we must teach
vs.
The way students must learn
Need for customization for
differences in how we learn
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Interdependencies in the
teaching infrastructure
Temporal
Lateral
Physical
Hierarchical
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!
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Historically, most schools have crammed computer-
based learning into the blue space
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Core
curriculum
Path taken by
most schools, foundations
and education software
companies
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The substitution of one thing for another
always follows an S-curve pattern
% new
% new
% old
.001
.0001
.01
0.1
1.0
10.0
09 11 07 05 03 13 15
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Online learning gaining adoption
Enrollments up from 45,000 in 2000 to 1,000,000 in 2007
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PROCESSES:
Ways of working together to
address recurrent tasks in a
consistent way: training,
development, manufacturing,
budgeting, planning, etc.
Why does an organizational model lock us in?
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 theyve 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
29
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
THE VALUE PROPOSITION:
A product that helps
customers do more effectively,
conveniently & affordably a
job theyve 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 dont evolve.
Corporations do.
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When launching disruptions, autonomy is key
Improve performance of each
component
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VP VP VP VP
Autonomous
VP VP VP VP
Heavyweight
VP VP VP VP
Lightweight
VP VP VP VP
Functional
Product architecture: What are
the components, and which ones
interface with others?
Organizational model in which
product is used
Change the specifications for how
components must fit together
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Disrupting Class:
How Disruptive Innovation Will Change the
Way the World Learns
Michael B. Horn
October 16, 2009
mhorn@innosightinstitute.org
32
What are states doing?
44 states have some form of online learning
initiative
32 states have supplemental state-led
programs
FLVS, Idaho Digital Learning Academy, MVU
4 of these have 10K+ enrollments
Over a quarter grew by over 50% last year
16
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Policy implications
Autonomous
Self-sustaining funding
Not beholden by the old metrics
Seat time Mastery/Performance-based
Student: teacher ratio
Teacher certification
Human resources pipeline and professional
development
Broadband/wireless infrastructure
Portal/Based on usage and what works
Treatment and use of data
Manufacturing
Food services
Medical procedures
Instruction
Textbooks; education
software today
Value-adding
process
businesses
Telecomm
Insurance
EBay
D-Life
Education software
tomorrow
Facilitated-
network
businesses
Transforming the content model
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Path taken by
Educational
software
developers
The instructional materials business historically has been a
value-adding process business
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Stages in instructional disruption
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Teacher-led
monolithic instruction
Online learning
Student-centric learning
facilitated user networks
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Student-centric software will be a
facilitated-network business
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Modules
Custom classes
Tutoring
Facilitated Network: parents,
teachers, students, entrepreneurs
Assessment in todays monolithic system
Deliver content to students Testing & assessment
Progress to next grade, subject,
or body of material
Receive results
39
10/15/09 Copyright Clayton M. Christensen Copyright Clayton M. Christensen
How should assessment work?
Deliver content to students Testing & assessment
Progress to next grade, subject,
or body of material
Receive real-time
interactive feedback

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