This is what disruptive innovation looks like

By Laura Hollis

The global coronavirus pandemic has thrown the United States (like most of the rest of the world) into a sort of quasi-organized chaos. All across the country, businesses, health care systems, governments and schools have been disrupted. In my own field of higher education, most colleges and universities have been forced to close live, in-person classes and move entirely to online instruction.

As someone who teaches courses in entrepreneurship and innovation, this is a riveting phenomenon to watch, a case study unfolding in real time.

Since the early 2000s, I have taught from author Clayton Christensen’s seminal 1997 book, “The Innovator’s Dilemma.” Christensen, who held a chaired professorship at Harvard Business School (and just passed away in January) did not coin the term “disruptive innovation,” but his bestseller brought the concept to the forefront of business theory.

Christensen described “disruptive innovation” as a process whereby a new and radically different innovation moves slowly upmarket until it utterly displaces the old established products, services and/or business models, putting previously successful companies – and even entire industries – out of business. Consider what the invention of the internal combustion engine did to the market for horses and buggies. Or, more recently, what the internet and MP3 files did to the music industry. Or what the smartphone has done to the market for traditional cameras and film.

In my opinion, Christensen’s most groundbreaking contribution was explaining why companies – having seen this phenomenon take place over and over again – would not change their strategies to capitalize on these new innovations. Using case studies from eight very different industries, Christensen demonstrated that companies were not complacent, ignorant of these innovations or cavalier about their customers. To the contrary, it was precisely because their customers had no interest in these new innovations – at least initially – that the best companies would not – indeed, could not – devote significant efforts or resources to their development.

Since the early 2000s, I have taught my students about disruptive innovation, using online higher education programs as an example. Distance education has been around for decades; the evolution of the internet simply enabled people to put it online. Despite their facility with and love of technology, very few students in the past 25 years seriously considered an online program for their undergraduate degree. Applicants to everything from the Ivy League to vocational and technical schools traditionally looked for particular aspects of the college experience that online programs did not offer.

But some people did want online college: for starters, single parents or working adults who needed flexibility to finish their degrees; people who never finished high school; and people whose grades or test scores were too low to be admitted to traditional schools. These individuals were simply not the target customers for most schools – and certainly not the most prestigious schools.

But the early adopters – the first online programs – were willing to take these students 25 years ago. And they have been moving upmarket ever since.

In the meantime, what have the schools that attract the “best and brightest” done? While most schools have put at least some courses for credit online, far fewer have put their entire curricular offerings online.

Until now.

What makes an innovation disruptive is not merely a whizzy new technology; it is the confluence of multiple factors: new technology plus widespread public demand – or dissatisfaction with the existing business model – and, sometimes, circumstances no one anticipated.

Hello, COVID-19.

Across the country, schools of every cut and caliber are scrambling to put everything online. Many of them are dealing for the first time with the legitimate challenges associated with distance learning, among them:

  • What happens when the technology fails?
  • How do we keep students engaged?
  • How do we provide academic and other guidance?
  • How do we prevent cheating?
  • If we grade pass/fail, will students still do the work?
  • How do we persuade prospective employers that students have received the education they need for their employment?

These are serious questions, and there are no one-size-fits-all answers. But in general, which schools are in the best position to address those now-widespread concerns? Those that have been doing online education for 20 years? Or those throwing themselves into these efforts for the first time?

This is how disruptors, once considered “upstarts” that wouldn’t be given a serious thought, become industry dominators, seemingly overnight.

Admittedly, our circumstances are unique – and, hopefully, temporary. Online education isn’t a motorcar in a world of horses and buggies, or a smartphone.

But … higher ed has been in need of serious reform for years, and everyone knows it. Tuition has skyrocketed, and student loan debt cripples young graduates’ ability to launch into their adult lives (even more so when students need graduate school for their careers). Some courses seem to exist purely to gratify the interests of the faculty teaching them. Tenure can be used as a bludgeon to limit intellectual or ideological diversity. The costs of bloated administration often exceeds that of instruction. Student athletes make millions for the most successful programs and yet cannot profit from their own names or likenesses. Substance abuse and sexual assault are serious problems.

Traditional brick-and-mortar educational programs are not going away; they offer too much rich experience that online education cannot. But online education has been eating away at the edges for some time. After months of widespread distance learning, parents and students will be asking hard questions about what’s really necessary, where to cut costs and what can be eliminated or adapted. We won’t get away with going back to the way things were just because “it’s always been done this way.”

This is what disruption looks like.

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