Disruptive Innovation is NOT a Myth – Understand How and When to Apply it

I have studied, leveraged and lectured about disruptive innovation theory for more than a decade.   When we launched GameTap at Turner Broadcasting, our internal strategic pitches illustrated how the invention was potentially a disruptive technology in the video games industry.   It was disruptive because it possessed the following characteristics which are common characteristics of a disruptive innovation:

  • The product was serving an area of nonconsumption in the marketplace – game publishers and console manufacturers were not focused on backward compatibility of video games and were focused on first-run, retail sales of new titles due to lack of viable distribution channels for back catalog content.    As such, the market was perceived to be smaller and more niche than the hardcore game market.   Further, incumbents were concerned of the potential cannibalization of new releases which ironically, was the same undue concern the movie studios had when cable television came to being.
  • The initial product was perceived as cheaper and less attractive than existing products.
  • It was a lower margin opportunity which was largely ignored by established companies.

I remember when Nintendo launched the Wii, I had several spirited debates with industry executives who believed that the Wii was a disruptive innovation.   I firmly believed it was NOT a disruptive innovation.  Conversely, I felt that Nintendo wisely introduced a sustaining innovation to the marketplace.   Instead of competing head to head with Sony and Microsoft, it focused solely on games in its new console.  However, it broadened the market for video games because it made the experience family-friendly.  The introduction of the nunchuk controller was a revolutionary feature in the console gaming experience.   It was a stellar strategic move by Nintendo at the time, but it was NOT disruptive.   It targeted the same market and it was still, first and foremost, a game console.   However, by focusing solely on games and broadening the market, it introduced a less expensive game console that was priced far below its competitors.     It served Nintendo well for a while, but as the market evolved towards online gaming and mobile gaming, Nintendo was ill-prepared for this transition and found itself in a significantly disadvantaged position. In its most recent fiscal year, the company suffered its first annual financial loss and its stock was hammered in the markets.

Disruptive innovation theory must be used properly.    A recent article  wisely alluded to the fact that everyone is trying to apply the theory to their latest technological innovation.    Entrepreneurs have turned the theory into a “fad,” which it is not.   Because of the misuse, it has caused some in the blogosphere to call it a “myth” and that the theory is believed to be “unassailably true” and a “sacred text.”  This would be a gross misunderstanding of the theory and its principles.  And sadly,  this misapplication could not be more evident than in the area of public education.

When Clayton Christensen and Michael Horn wrote Disrupting Class, they discussed how public education was primed for disruptive innovation:  how a shift to student-centric learning would and could fundamentally transform the manner in which we educate our children.  Yes, they introduced certain projections on the growth of online learning, but the strategic premise was correct.   I have had many conversations with the book’s co-author, Michael Horn, over the past five years, and as we’ve seen digital learning take various forms, the latest being blended learning, we NEVER said it was disruptive.  Even if an invention appears disruptive, the question is whether you are distributing it disruptively.   When I was working on an ed tech startup five years ago, Michael always made me consider that question.  This is one reason why technology has been “crammed” into schools.   Back in 2011, Horn penned an op-ed piece, one of many on the subject, where he talked about how the United States has wasted over $60 billion cramming technology into public schools over the past few decades, with little to no effect on productivity, economic efficiency, or most importantly, academic achievement.

When the Clayton Christensen Institute introduced their latest whitepaper last week:  Is K-12 Blended Learning Disruptive, blogger Audrey Watters took the opportunity to fundamentally challenge the theory and make it look like the institute was “backpedaling” on their original premise by introducing a new term, “hybrid innovation.”  Per the whitepaper:  a hybrid is a combination of the new, disruptive technology with the old technology and represents a sustaining innovation relative to the old technology.  While I do not question Ms. Watters’ skepticism, I challenge her assertion that the Institute is perpetuating a myth and that there is a political influence to their actions.   Think about what blended learning is and is not:

  • It is NOT typically targeting an “area of nonconsumption.”   It is attempting to transform the physical classroom and manner in which knowledge is delivered to a student.
  • As Horn points out, “Disruptive innovations, in contrast, do not try to bring better products to existing customers in established markets. Instead, they offer a new definition of what’s good—typically they are simpler, more convenient, and less expensive products that appeal to new or less demanding customers. Over time, they improve enough to intersect with the needs of more demanding customers, thereby transforming a sector.”  Blended learning is targeting an established market, unlike virtual schooling and other forms of online learning outside the classroom.
  • We do not yet know whether it will be less costly than the status quo.  In fact, as long as funding mechanisms continue to be inefficient and improperly aligned with student outcomes, it may require additional investment in its initial phase in order to integrate into the public school infrastructure.  When you target an existing market, it becomes a tradeoff analysis.   To fund this, what must you cut?
  • Hybrids try to do the job of the existing product or service.  Isn’t that what blended learning is attempting to do?
  • Blended learning appears to be less “foolproof” than a disruptive innovation. It does not significantly reduce the level of wealth and/or expertise needed to purchase and operate it.  Teachers need to be trained to fundamentally alter the way they teach, particularly in a station-rotation type blended model.

I take the position that the Christensen Institute is NOT backpedaling on their original book.   Rather, they wrote this paper to create a baseline understanding of what blended learning is and is not.   It NEVER was a disruptive innovation, but many educators, policy experts, and writers are questioning the credibility of the Institute because of the people who not only do not fully understand the theory, but also, as a result, misapply it in the marketplace.   When has a projection been correct?  I’m sure that some of the projections in Disrupting Class, even the ones Ms. Watters points out ( 1.  in 15 years, half of our universities may be bankrupt; 2. by the year 2019, 50% of all K-12 classes will be taught online), may be overstated to a certain agree.  However, it is broadly believed that the underlying premise of these estimates is accurate.  The higher ed system has an unsustainable business model which has led to the introduction of MOOCs (e.g., Coursera).  We also know that the use of digital learning in the classroom is growing at a rapid pace – it might be more “blended” than solely online, as we expect it to be.  The physical classroom is not going to be eliminated anytime soon, nor should it. 

Ms. Watters does not have an MBA as she points out.  This does not make her any less informed or less intelligent than those of us who have MBAs.   In fact, she is a very experienced, knowledgeable education technology blogger.   However, time and time again, disruptive innovation has proven to be an accurate framework to illustrate how breakthrough innovations emerge and transform industries.   What the Christensen Institute has done is create a framework to accurately capture the ongoing transformation of public education.   Blended learning is NOT disruptive.   It’s a sustaining innovation relative to the status quo, and it’s time everyone started applying the nomenclature correctly.

Disruptive innovation is most definitely a sacred text.   But when mis-applied, it can become a catch-all phrase for all inventions, and that would be grossly unfair to Professor Christensen and his valuable contributions to our society.

 

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s