Disrupting Class:

How Disruptive Innovation Will Change the

Way the World Learns

Michael B. Horn
December 3, 2009
mhorn@innosightinstitute.org

10/15/09 Copyright Clayton M. Christensen

1
 Sustaining and Disruptive Innovations

e of cal
Incumbents nearly always win Pa c logi
e c hno s
T
gres
Performance

P r o
ti o ns
no va
in
ni ng
u s tai
S
t customers
Performance tha
sorb
can utilize or ab

Time

10/15/09 Copyright Clayton M. Christensen

2
 Disruptive Innovations create asymmetric competition
a nce
e r for m
a ce of p nt
Incumbents nearly always win P
r o v eme

Performance
imp
v at ions 60% on
g i nno
t ai ni n $500,000
Sus

45% on
Of Performance
Different measure

$250,000
t customers
Performance tha
sorb
can utilize or ab

Time

o va t ions: 40% 20%

r u pt iv e Inn against on $2,000
is ng
on- D C ompeti sumption
N n
or non-co
ers
m
n su Entrants nearly always win Time
n -co ming
s
No nsu sion
co cca 10/15/09 Copyright Clayton M. Christensen
o 3
 Disruption in business models has been the dominant
historical mechanism for making things more affordable and
accessible
Yesterday Today
Ford Toyota
Dept. Stores Wal-Mart
Digital Eqpt. Dell
Delta Southwest Airlines
JP Morgan Fidelity
Xerox Canon
IBM Microsoft
Cullinet Oracle
AT&T Cingular
State universities Community colleges
Sony DiskMan Apple iPod
Copyright Clayton M. Christensen
4
Disruption of Toyota

Copyright Innosight Institute, Inc. 5

 Disruption in business models has been the dominant
historical mechanism for making things more affordable and
accessible
Yesterday Today Tomorrow
Ford Toyota Chery
Dept. Stores Wal-Mart Internet retail
Digital Eqpt. Dell RIM Blackberry
Delta Southwest Airlines Air taxis
JP Morgan Fidelity ETFs
Xerox Canon Zink
IBM Microsoft Linux
Cullinet Oracle Salesforce.com
AT&T Cingular Skype
State universities Community colleges Online universities
11/05/09
Sony DiskMan Apple iPod Cell Phones 10
Copyright Clayton M. Christensen
 Centralization followed by decentralization: Computing

10/15/09 Copyright Clayton M. Christensen 7

 The decentralization that follows centralization
is only beginning in education

10/15/09 Copyright Clayton M. Christensen 8

Important characteristics of Disruption
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

12/02/09 Copyright Clayton M. Christensen 9

 Expensive failure results when disruption is framed in
technological rather than business model terms

Tabletop Radios,

Performance
Floor-standing TVs

Path taken by
Of Performance
Different measure

vacuum tube
manufacturers

Time
Portable TVs
Pocket radios
on-
N Hearing aids
s or
mer
u Time
ons g
c
on- umin s
N ns sion
co cca 11/05/09 Copyright Clayton M. Christensen 11
o
The pursuit of revenue and differentiation in sustaining competition
amongst similar business models generally adds cost

12/02/09 Copyright Clayton M. Christensen 5

 Costs in higher education

Endowment
Dollars

10%

Endowment
= ~
r e ase
st Inc
o
u al C
Ann = ~8%
se
on in crea
l tuiti
n ua
An

Time

10/15/09 Copyright Clayton M. Christensen

12
Understanding how users experience life

The customer rarely buys what the company thinks it is selling

him - Peter Drucker

Clayton M. Christensen
2
 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?

10/15/09 Copyright Clayton M. Christensen 33

 Disruption of general-purpose products
happens on job-by-job basis perf
o r m ance
o f
Pace vem
Major Metropolitan Newspapers ent me:
Help
o
impr

Performance
Unload this stuff ns
o v atio
Find the
i n g inn car
right
n
staior
S uSell buy a home
Find the right job, or the right employees
Kill commuting time productively
Of Performance
Different measure

Become well-informed
Unwind at the end of the day

Time
Craigs List

o va t ions: AutoTrader.com
pt iv e Inn a inst
isr u g a g Realtor.com
on- D C o mpetin umption
orN n o n-cons Monster.com
ers
sum Metro; Blackberry Time
n
- c o ing
n m
No nsu sions CNN.com
co cca 10/15/2009 Copyright Clayton M. Christensen 15
o Unwind at the end of the day
 The Harvard Business School is being disrupted

Incumbents nearly always win

$150,000 !!

Performance
r MBA
2-yea
e M BA
tim
Part- age
ar b
Of Performance
Different measure

n - line G
O
Help me solve this problem
Teach me what I need to know to
become a great manager Time

ve r sit ie s: Give me the credentials I need to get

a t e U ni n st
r po r a g a i the next, more lucrative job
n- C o m p et i ng o n
N o
C o m p t i Help me switch careers
re s
or
o n - c onsu
m u
n Help me join a prestigiousTime
network
ons g
c
on- umin s Brand
N ns sion
co cca 10/15/2009 Copyright Clayton M. Christensen 16
o Connections
 So what should the
Harvard Business School Do?

10/15/2009 Copyright Clayton M. Christensen 17

 Disruption is facilitated when historically valuable
(and expensive) expertise becomes commoditized

Experimentation
Performance

& problem-solving

Pattern Recognition

Rules-Based

10/15/2009 Copyright Clayton M. Christensen 18

 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

12/02/09 Copyright Clayton M. Christensen 12

Focus on product categories leads to feature
proliferation and undifferentiated products

Toyota Chevrolet
Sienna Uplander
Avalon Impala
Camry Malibu
Corolla Cobalt
4-Runner Trailblazer
Tundra Colorado
Tacoma Avalanche
12/02/09 Copyright Clayton M. Christensen 13
 Who are our customers?

What jobs do they hire institutions of

higher education to do?

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?

12/02/09 Copyright Clayton M. Christensen 15

 We all learn differently
Multiple intelligences Talents
- Linguistic, Mathematical, Kinesthetic - Giftedness is fluid
Motivations/interests Aptitudes
Learning Styles Different paces
- Visual, aural, playful, deliberate - Fast, medium, slow
Depends on subject/domain Ongoing cognitive
Research in practice science research
- Scientific Learning - fMRI scans
- Universal Design for Learning/CAST
- K12, Inc.
- All Kinds of Minds

10/15/09 Copyright Clayton M. Christensen

22
 The right product architecture
depends upon the basis of competition
IBM Mainframes, Microsoft Windows
Performance

Compete by improving
functionality &
reliability es
ur
t ect
r chi
a
ent
d
pen
te rde es
, in tu r
t ary i tec
oprie arch Compete by improving
Pr pe
n speed, responsiveness
l aro and customization
du
Mo
Dell PCs, Linux
Time
11/05/09 Copyright Clayton M. Christensen 14
 Conflicting mandates in the way we must teach
vs.
The way students must learn
Interdependencies in the Need for customization for
teaching infrastructure differences in how we learn

Multiple Intelligences

Paces of Learning
Standardization !!

Customization !!

Learning Styles
Temporal
Lateral
Physical
Hierarchical

10/15/09 Copyright Clayton M. Christensen

24
 Historically, most schools have crammed computer-
based learning into the blue space
Core

Performance
curriculum
Of Performance
Different measure

Path taken by
most schools, foundations
and education software
companies

Time

on-
N
s or
mer ing
u
ons nsum sions Time
c
on- co occa
N
10/15/09 Copyright Clayton M. Christensen
25
 The substitution of one thing for another
always follows an S-curve pattern
% new
% old
% new 10.0

1.0

0.1

.01

.001

.0001
03 05 07 09 11 13 15

10/15/09 Copyright Clayton M. Christensen

26
 Online learning gaining adoption

Enrollments up from 45,000 in 2000 to 1,000,000 in 2007

10/15/09 Copyright Clayton M. Christensen
27
Why does an organizational model lock us in?

RESOURCES:
THE VALUE PROPOSITION:
People, technology, products,
A product that helps
facilities, equipment, brands,
customers do more effectively,
and cash that are required to
conveniently & affordably a
deliver this value proposition
job theyve been trying to do
to the targeted customers

PROCESSES:
REVENUE FORMULA:
Ways of working together to
Assets & fixed cost structure, address recurrent tasks in a
and the margins & velocity consistent way: training,
required to cover them development, manufacturing,
budgeting, planning, etc.
10/15/09 Copyright Clayton M. Christensen
28
 RESOURCES:
THE VALUE PROPOSITION:
People, technology, products,
A product that helps
facilities, equipment, brands,
customers do more effectively,
and cash that are required to
conveniently & affordably a
deliver this value proposition
job theyve been trying to do
to the targeted customers
Business units dont evolve.
Corporations do.
PROCESSES:
PROFIT FORMULA:
Ways of working together to
Assets & fixed cost structure, address recurrent tasks in a
and the margins & velocity consistent way: training,
required to cover them development, manufacturing,
budgeting, planning, etc.
10/15/09 Copyright Clayton M. Christensen
29
 When launching disruptions, autonomy is key
Autonomous
Organizational model in which VP VP VP VP

product is used
Heavyweight
Product architecture: What are VP VP VP VP
Level of change

the components, and which ones

interface with others?
Lightweight
Change the specifications for how VP VP VP VP

components must fit together

Functional
Improve performance of each VP VP VP VP

component
10/15/09 Copyright Clayton M. Christensen
30
 Disrupting Class:
How Disruptive Innovation Will Change the
Way the World Learns

Michael B. Horn
October 16, 2009
mhorn@innosightinstitute.org

10/15/09 Copyright Clayton M. Christensen

31
 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

10/15/09 Copyright Clayton M. Christensen

16
32
 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
33
 Transforming the content model
Value-adding Facilitated-
process network
businesses businesses

Manufacturing Telecomm
Food services Insurance
Medical procedures EBay
Instruction D-Life
Textbooks; education Education software
software today tomorrow
10/15/09 Copyright Clayton M. Christensen
 The instructional materials business historically has been a
value-adding process business

Performance
Path taken by
Of Performance
Different measure

Educational
software
developers

Time

on-
N
s or
r
u me ming s Time
ons nsu sion
c
on- co10/15/09
occa Copyright Clayton M. Christensen
N
35
 Stages in instructional disruption
Little

Performance
ion
iza
t
co u rses
sto
m
h e r-led
fc
u
Tea c
o
e
re
Of Performance
Different measure

e g
D

Extensive
Of Performance
Different measure

ou rs es Teacher-led

nl in ec monolithic instruction
O

Online learning

g to ols
Tu torin
Student-centric learning
facilitated user networks
10/15/09 Copyright Clayton M. Christensen
36
 Student-centric software will be a
facilitated-network business

Performance
Of Performance
Different measure

Custom classes
Modules
Tutoring
on-
N
s or
r
u me ming s Facilitated Network: parents,
Time
ons nsu sion teachers, students, entrepreneurs
c
on- co10/15/09
occa Copyright Clayton M. Christensen
N
37
 Assessment in todays monolithic system

Deliver content to students Testing & assessment Progress to next grade, subject,
or body of material

Receive results

10/15/09 Copyright Clayton M. Christensen

 How should assessment work?

Deliver content to students Testing & assessment Receive real-time

interactive feedback

Progress to next grade, subject,

or body of material

10/15/09 Copyright Clayton M. Christensen

39