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1businessas usual

disruptive innovations2Current leadership models are inadequate fordisruptive innovations

Dr. Scott McLeoddangerouslyirrelevant.org(a 2008 K12 Online presentation)Hello!My name is Dr. Scott McLeodI am the Coordinator of Ed Admin program at ISUI also am the Director of UCEA (CASTLE)Some of you may know me from my blog, DI

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I am going to talk in this presentation about some concepts put forth by Dr. Clayton Christensen in two of his books, TID and DCDr. Christensen is a professor in the Harvard Business School and has gained great renown for his work on what he calls DIs

In this presentation, I am going to explain what a DI is, describe what effective organizational leadership looks like when faced with a DI, and, finally, actually connect it all to schools by discussing some implications of DIs for elementary and secondary school leaders. Although Dr. Cs second book, Disrupting Class, does some of this too, Im going to try to reframe and summarize some of his key points in a way that hopefully is useful to you. Please be patient I promise Ill eventually link all of this stuff to schools and educators.

Before we get started, please note that a great deal of what I say in this presentation comes from Dr. C. Any mistakes or logic flaws, however, are mine alone. Image credits and other references are at the end of this presentation.4What is adisruptive innovation?So what is a DI?

Well, before I begin to describe in detail what a disruptive innovation is, let me give you a few examples to help you understand the concept.

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Back in the day we used to have vinyl records.6

The vinyl record was eventually replaced by the cassette tape7

Which was then replaced by the music CD8

Which is now being replaced by portable music players such as the iPod.

The cassette tape was a DI to the vinyl record paradigm. The music CD was a DI to the cassette tape paradigm. And iPods and other portable music players are proving to be DIs to the music CD paradigm.9

Heres another example. We used to have mainframe computers that ran reel-to-reel tape.10

Those were replaced by minicomputers11

Which were then replaced by personal computers12

Which are increasingly being replaced by portable computers. The laptop is looking like its a DI to desktop PCs, which were DIs for minicomputers, which were DIs to the old mainframe computers.13

Similarly, film cameras14

Have for the most part been replaced by digital cameras15

And its not just products. For instance, everyone used to shop at local shops, such as department stores. 16

Then Sears came along and carved out a huge slice of the department stores customers17

In turn, Walmart then came along and shredded the customer base of Sears.18

In the financial services arena, previously-dominant stock brokerages19

Are increasingly facing pressure from online brokerages such as ETrade which allow customers to purchase stocks directly. As we can see, DIs arise in the service industries too.20Disruptive innovationschange the game.By now, youre probably realizing that DIs change the game. They represent completely new paradigms, ones that often completely replace systems that were previous widely-held.

In order to understand HOW DIs do this, we need to learn about two lines.21more thanneeded

The first line is the more than needed line. Christensen has a fancier term for this line, but I like this one.

An example of the more than needed line relates to those push-button phones that connect to the wall that many of us still have. If you recall, over time these phones have gotten fancier and fancier. Some became cordless, for example, or could be used as intercom systems. Similarly, the phone company began to offer us new services such as call waiting or caller ID in order to make additional money. But for many folks, the regular phone worked just fine. Most of the new features were more than they needed.

[When this occurs, Christensen calls this situation performance oversupply.]22goodenough

The second line is the good enough line (which, of course, also has a fancier name in Christensens books).

For example, when the first mobile phones came out, they were big, heavy, and expensive. Over time, however, they got better and better, until eventually they were good enough for the mainstream public.23more thanneededgoodenough

In both cases, the lines of progress represented here by green lines are what Christensen calls SIs. SIs are gradual, continual improvements of current products for existing customers. Over time, products get better and better as organizations strive to maintain and grow market share. As this occurs, products get less expensive, add more features, etc.24more thanneededgoodenough

What happens when a brand new technology comes along that is not a SI? For example, the first mobile phone was not a refinement of the wired, push button phone. It was not a SI. Instead, it was a completely new telephone technology.

Well, what happens when a new technology like the mobile phone enters the market is that most existing customers are NOT interested. Their current phone works fine its good enough. In fact, on a number of different fronts, the new technology is much WORSE than the old one. Why would customers be interested in that?25more thanneededgoodenough

In this case, the phone company logically and rationally listens to its current customers, the ones that generate all of its revenue. It continues to engage in SI, improving its current products and ignoring the new technology because it doesnt meet the needs of its customer base.26more thanneededgoodenough

What happens, however, is that the new technology finds a new group of people who ARE interested in it. Rather than taking away existing customers, the new technology finds a whole new bunch of folks that need it. For instance, when the first mobile phones came out, their disadvantages made them distinctly unattractive to the mainstream market. But there was a different, smaller, unserved market that jumped on mobile phones right away despite their shortcomings.

The key thing to remember about all of this is that, over time, many new technologies get better as they continue along their own SI path serving their new markets. Each change for the better attracts new customers, and the technology gets refined even more and makes even more progress. At some point the new technology actually gets good enough for the mainstream, at which point things get interesting.

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Why? Because when a DI crosses the good enough line, folks start buying it in droves because it has other advantages such as reliability, convenience, size, or price.

When this occurs, the new technology officially becomes a DI, so-called because, as more and more customers start buying the new technology, it completely disrupts the old market. The old technology eventually disappears due to lack of customers. Cell phones are a classic example of this, as more and more people simply cancel their wired phone service altogether.

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Pretty soon all you have left is the DI.29more thanneededgoodenough

The new organizations then proceed to engage in SI just like the old ones did 30more thanneededgoodenough

?, until a new DI comes along and starts the process all over again.31Effective leadership fordisruptive innovationsThis has major ramifications for organizational leadership. As Christensens research shows, there are some absolutely vital things to understand when your organization is confronted by a DI.32Good organizations with good people will disappear if they dont understand the natural laws of disruptive innovation.First of all, leaders need to recognize that the fact that the old organization is severely injured or disappears is not due to mismanagement or bad employees. In fact, as Christensen points out, organizations typically do exactly what theyre supposed to, which is listen to their customers and make their products better based on what their customers want.33more thanneededgoodenough

The progression of the rotary phone to the push-button phone and then the cordless phone is a classic example of this. The phone companies engaged in SIs based on what their customers wanted, making continued improvements and adding new features.

When the first mobile phone came out, phone company customers didnt want it so the companies didnt pay attention to it. They had the technological and organizational capacity to build mobile phones, they just didnt have a market base that was interested. Unfortunately for them but fortunately for the rest of us - over time the mobile phone improved until it got good enough. At that point, the mobile phone manufacturers such as Nokia and Sony Ericsson began taking away large chunks of market share from existing carriers. The mistake of the old phone companies was taking customer needs as a given and trying to retrofit the new technology into those needs rather than taking the new technology as a given and trying to find a new customer base for it.34more thanneededgoodenough

The same thing happened in the computer industry. The first personal computers were quite primitive compared to the minicomputers sold by companies such as Digital and Wang. Customers didnt want them, so the companies didnt make them. What Digital and Wang and their customers didnt realize, however, was the potential of personal computers to evolve from mere toys to products that were good enough to completely replace the entire line of business. Wang and Digital are gone today, replaced by companies like Dell, HP, Apple, and Toshiba.35Its very difficult for existing successful organizations to become dominant players in the new market.A second key principle leaders need to understand is that the very characteristics that make organizations successful are what lead to their downfall. The organizations resources, processes, values, and other methods of operation are what led them to be successful in the first place. Over time, these organizational characteristics get fine-tuned to optimize current ways of doing things. Doing something different gets harder and harder.

Even if leaders see the new DI for what it is, they have a difficult time making the case to the rest of the organization that the journey is worth pursuing. As organizations get bigger and more successful, they increasingly require unambiguous, solid returns on their investment, thus making it quite unlikely that they will foray into unknown, risky ventures where it is clear that the new way of doing things is much worse than the current one. Across all organizational fronts, resources go to feed existing customer bases rather than toward tenuous, poorly-defined new audiences.

From an organizational standpoint, this makes complete and perfect sense - all the way up to the time when all of a sudden its too late. 36Its much easier to create a new organization - or buy one - than it is to turn an existing organization around.Because its so difficult to take old, groaning organizations as Charles Leadbeater calls them and turn them in completely new directions, an organization that is currently successful has to do something different when faced with a DI. Because organizational values and methods of operation are well-aligned for current ways of doing business, expecting them to simultaneously handle new, different, disruptive innovations is asking too much. Although a number of organizations try to simultaneously engage in SIs AND pursue DIs, organizational norms are such that, time after time, the risky DI projects always get starved for resources in the face of more pressing needs of the existing customer base.

An easier path is to create or maybe buy - a new, spinoff organization. One example of this was IBMs success in the early 1980s with the original IBM PCs, which resulted from IBM spinning off a completely-autonomous unit down in Florida far from New York headquarters - and giving it the resources, leadership, and permission necessary for it to succeed. Rather than trying to fit the new technology which performed poorly compared to existing products to current customer groups, the new entity marketed to completely new, underserved groups instead. IBM even gave its new unit permission to compete with other existing IBM products and customer bases.

37Its difficult to analyze the unknowable.Christensen makes two other key points. One is that often its quite difficult to analyze the potential success of new technologies because almost invariably they end up being used in ways quite different than originally expected. The important thing instead is to set up mechanisms for experimentation and small-scale failure while the organization figures out what the eventual market and user base will be. Over time, the new technology will grow, engage in SI, and, perhaps eventually overtake the original paradigm.38First-mover advantage is important when it comes to disruptive innovations.Finally, first-mover advantage is important when it comes to DIs. As Christensen notes, waiting until a market is large enough to be interesting is a loser strategy. By that time, new organizations are well ahead of the old, dominant ones on all of the relevant learning curves. By the time the former leaders catch up, its too late.39Implications forschool leadersOkay, so those are the basics. As you might imagine, all of this has several important implications for school administrators.40K-12 education is facing a disruptive innovation. Its personalized learning.The first implication is to understand whats happening here. Most school leaders have yet to recognize that K-12 education is facing an extremely disruptive innovation. What online courses, interactive Internet text, audio, and video resources, video game artificial intelligence engines, user-generated content, charter schools, homeschooling, and other communicative and connective mechanisms illustrate is that it is becoming increasingly easy to personalize ones own learning - to pursue topics of personal interest, meaningfulness, and relevance rather than having to subject oneself to a mass model of education.41The existing educational model is not a given.The second implication is that our existing educational model is not a given. Public schools need to be wary of being complacent. The current educational model evolved to meet a need. That need was to educate the masses in a way that was efficient and sometimes also effective.

Times have changed. Schools are being asked to prepare students for a different era. Educators are hearing from employers that technology and globalization necessitate a new schooling model, one that prepares graduates for effective digital citizenship and empowered global employment. If we truly are to leave no child behind, we must take advantage of the burgeoning capabilities of digital technologies and use them to foster individualized, personalized learning opportunities for students. Every year this becomes easier and easier as the new technologies the DIs mature and become even more capable.42All of this is going to sneak up on most school organizations.The third key concept is to recognize that while schools are special places theyre not immune to what Christensen calls the natural laws of DI. In many ways, school organizations are no different than many other service industries. Schools typically have dedicated employees and capable leaders, and over time they have refined their work to meet the demands placed on them by stakeholders. And yet as we have seen in countless other industries when faced with a DI, time after time dominant organizations still fail to successfully transition to the new, disruptive paradigm. Instead, other organizations rise up and take their place.43Cycles 1-20Cycles 21-25Were in here somewhere!One reason for this is due to the exponential nature of the changes that are occurring around us. The technologies and the usage statistics are progressing unbelievably quickly. During the old Industrial Revolution we began creating large machines that were many, many times stronger and more powerful than us. During this new Information Revolution, we are creating computing devices that increasingly can do cognitive tasks many, many times faster than us. These capabilities are opening up new possibilities for us, but as this example exponential growth curve shows - its hard to know what the end result will be when were still on the left side of the curve. Thus its hard to predict when and how to move toward the DI.

The end result is that educators sit on the left side of the curve, relatively content and complacent, lacking a sense of urgency because things havent changed much.

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??schoolsWhat teachers and administrators dont realize, of course, is that while they sit in the good enough area, making sustaining innovations, the disruptive forces of digital technologies, globalization, and increasingly-personalized learning are marching inexorably forward over in the space where theyre not paying attention. As the capacities of the DIs continue to improve, they get closer and closer to the good enough line. And when they finally do, we will see the mass migration begin to occur.

Just remember, seemingly overnight, everyone had cell phones. In just a few years, most people had a personal computer and access to the Internet. In what probably seemed like a blink of an eye to film camera manufacturers, most people had a digital camera. As we get closer to the right side of the exponential curve, huge forward leaps begin to occur.45Cycles 1-20Cycles 21-25Were moving this direction!A look at current student enrollment trends bears this out. The number of K-12 students taking at least one online course is now around a million strong. That number has been increasing dramatically each and every year. The number of students in charter schools has grown substantially over the past decade. Homeschooling trends also are on the rise. Even small districts are beginning to implement alternative schools for those students that are unsuccessful in the regular classroom setting.

We are seeing large amounts of growth in every sector where personalized learning is more possible than the current paradigm. These trends are cumulative. We are moving toward the right side of the exponential growth curve. One day well wake up and realize its tipped.462019Christensen thinks the magic year is 2019. Starting around 2012, he says, the DIs will begin to take off up the right side of the curve. By 2014, online courses will have roughly a 25% market share in high schools. By 2019, that number will be over 50%. What is now new and different will become commonplace, driven by SIs that make the new learning paradigm more palatable to the mainstream public. Right now the disruptive technologies are not good enough for most families. But by the end of the next decade, they likely will be.47To survive, school organizations must structure themselves to comply with the natural laws of disruptive innovations.Superintendents and school boards who want to ride the DI wave - rather than be engulfed by it - need to do several key things.

48Dont wait until it is good enoughFirst, they need to understand that most current stakeholders families and employees - will be rationally disinterested in the DI because its not as good as the current paradigm. Trying to mobilize the existing stakeholder base toward a DI is nearly impossible. The paradox, of course, is that the time to invest in a DI is precisely when its not good enough. By the time it is good enough, its too late.

49Dont wait until it is good enough

Start with underserved student groupsSecond, there are a number of underserved student populations where a DI of personalized learning often facilitated by digital technologies makes a lot of sense. For example, there are large groups of students who need AP, foreign language, or other advanced courses; who need credit recovery courses; who cant come to school because theyre homebound or incarcerated; who are being homeschooled; who are in alternative school settings; and so on. These are the groups with whom to use the disruptive technologies. Even if the technologies arent good enough right now - when compared to regular metrics - theyre better than the alternative that these subpopulations typically face - which is nothing. The students who either are underserved or not being served are the perfect populations for which school leaders should set up pilot programs and provide them with adequate resources, effective leadership, and, most importantly, independent autonomy to experiment and grow. Innovation occurs at the fringes.

50Dont wait until it is good enough

Start with underserved student groups

Use different metrics of successThird, school leaders need to use different metrics of success. For example, the question when looking at virtual schools or charter schools is not whether theyre BETTER than traditional classroom instruction but whether theyre AS GOOD AS traditional instruction but have other advantages that are of interest to certain student populations. Using this second metric, we can see quite clearly that the answer is usually YES and thus we can understand why these schooling methods are growing as quickly as they are.

51Dont wait until it is good enough

Start with underserved student groups

Use different metrics of success

Compete directly with the existing organization

Finally and this is perhaps counterintuitive school leaders should allow the spinoffs to compete directly with the existing organization for students. Artificial barriers regarding funding or enrollment merely delay the inevitable. Such mechanisms are simply ways to try and preserve the old paradigm in the face of a DI. History proves over and over again that the end result of these preservation attempts will be failure.

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digital world

dangerouslyirrelevant.orgglobal worldWe have challenging and interesting times ahead of us. The retirement of the Baby Boomers, accompanying teacher shortages, learning expectations of the digital generation, increasing stresses on government budgets, and accountability demands all will help drive the adoption of personalized learning. So too will advances in digital technologies, as our abilities to communicate, collaborate, create, and share get better through sustaining innovations in learning software, gaming software, and the Internet. Dropping costs of personal computing devices and increasing broadband wireless access to the Internet also will facilitate this movement.53The 21st centuryis here.(Isnt it time we started preparing students for it?)

I think the key takeaway from all of this is that even though things currently seem fairly fine - the time for schools to move is now. Schools need a greater sense of urgency than they currently possess and they need to move in directions that make strategic sense when faced with DIs. If they dont, they will be eclipsed by new entities that better meet the needs of students, families, and the global workplace.

Thats it. Thanks for sitting through this entire presentation. I encourage you to read Christensens two books, starting with The Innovators Dilemma. Enjoy the rest of the conference!54IMAGES AND OTHER CREDITS

http://cdn.harpercollins.com/harperimages/isbn/large/8/9780060521998.jpg

http://ecx.images-amazon.com/images/I/51iQA%2BI3hDL._SL500_.jpg

http://www.nonstopmac.com/images/ipod-family.jpg

http://www.hongwanjihi.org/Web2003/links/compHist/Pict_Comp_Hist/minicomputer2.jpg

http://www.computersciencelab.com/ComputerHistory/HtmlHelp/Images2/IBM7094.jpg

http://www.solarnavigator.net/images/apple_IIe_original_personal_computer.jpg

http://digitaldaily.allthingsd.com/files/2007/06/iphone_34.jpg

http://blog.loaz.com/media/blogs/timwang/mini-laptop-fujitsu-P7230.jpg

http://www.360software.co.uk/images/sears_logo.gif

http://www.roflsaurus.com/stories/Walmart_Logo.jpg

http://img.presence-pc.com/news/m/e/Merrill_Lynch_logo_215x178.jpghttp://trickledown.files.wordpress.com/2007/11/etrade.gif

http://www.shoprobinsonmall.com/images/macys-logo_000.jpg

http://cdn.harpercollins.com/harperimages/isbn/large/8/9780060521998.jpg

http://ecx.images-amazon.com/images/I/51iQA%2BI3hDL._SL500_.jpg

http://www.amazon.com/Innovators-Dilemma-Revolutionary-Business-Essentials/dp/0060521996

http://www.amazon.com/Disrupting-Class-Disruptive-Innovation-Change/dp/0071592067Current leadership models are inadequate fordisruptive innovations

Dr. Scott McLeoddangerouslyirrelevant.orgk12onlineconference.org57DI=?DIangerouslyrrelevantisruptivennovation