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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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10/15/09 Copyright Clayton M. Christensen
Sustaining and Disruptive Innovations
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Incumbents nearly always win
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10/15/09 Copyright Clayton M. Christensen
Disruptive Innovations create asymmetric competition
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Incumbents nearly always win
60% on
$500,000
45% on
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40%
on $2,000
20%
Perform
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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
10/15/09 Copyright Clayton M. Christensen 7
Centralization followed by decentralization: Computing
10/15/09 Copyright Clayton M. Christensen 8
The decentralization that follows centralization
is only beginning in education
12/02/09 Copyright Clayton M. Christensen 9
•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
11/05/09 Copyright Clayton M. Christensen 11
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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
12/02/09 Copyright Clayton M. Christensen 5
The pursuit of revenue and differentiation in sustaining competition
amongst similar business models generally adds cost
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10/15/09 Copyright Clayton M. Christensen
Costs in higher education
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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
10/15/09 Copyright Clayton M. Christensen 33
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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10/15/2009 Copyright Clayton M. Christensen
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
Craig’s List
AutoTrader.com
Realtor.com
Monster.com
Metro; Blackberry
CNN.com
Unwind at the end of the day
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10/15/2009 Copyright Clayton M. Christensen
The Harvard Business School is being disrupted
Time
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Incumbents nearly always win
$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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10/15/2009 Copyright Clayton M. Christensen
So what should the
Harvard Business School Do?
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10/15/2009 Copyright Clayton M. Christensen
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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
12/02/09 Copyright Clayton M. Christensen 12
• Ikea vs. Levitz Furniture
• iPod / iTunes vs. Kazaa
• Best Buy-Geek Squad vs. Costco
• Take Care-Walgreens vs. Doctor’s office
Corolla
Camry
Avalon
4-Runner
Tundra
Toyota
Tacoma
Sienna
Cobalt
Malibu
Impala
Trailblazer
Colorado
Avalanche
Uplander
Chevrolet
12/02/09 Copyright Clayton M. Christensen 13
Focus on product categories leads to feature
proliferation and undifferentiated products
Who are our customers?
12/02/09 Copyright Clayton M. Christensen 15
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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10/15/09 Copyright Clayton M. Christensen
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
11/05/09 Copyright Clayton M. Christensen 14
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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10/15/09 Copyright Clayton M. Christensen
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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10/15/09 Copyright Clayton M. Christensen
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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10/15/09 Copyright Clayton M. Christensen
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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10/15/09 Copyright Clayton M. Christensen
Online learning gaining adoption
Enrollments up from 45,000 in 2000 to 1,000,000 in 2007
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10/15/09 Copyright Clayton M. Christensen
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 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
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10/15/09 Copyright Clayton M. Christensen
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 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.
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10/15/09 Copyright Clayton M. Christensen
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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10/15/09 Copyright Clayton M. Christensen
Disrupting Class:
How Disruptive Innovation Will Change the
Way the World Learns
Michael B. Horn
October 16, 2009
mhorn@innosightinstitute.org
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10/15/09 Copyright Clayton M. Christensen
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
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10/15/09 Copyright Clayton M. Christensen
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
10/15/09 Copyright Clayton M. Christensen
•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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10/15/09 Copyright Clayton M. Christensen
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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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10/15/09 Copyright Clayton M. Christensen
Stages in instructional disruption
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Online learning
Student-centric learning
facilitated user networks
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10/15/09 Copyright Clayton M. Christensen
Student-centric software will be a
facilitated-network business
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Modules
Custom classes
Tutoring
Facilitated Network: parents,
teachers, students, entrepreneurs
10/15/09 Copyright Clayton M. Christensen
Assessment in today’s 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