Disruptive versus destructive innovation: an answer to Paul Prinsloo

I think that the discussion on business models, innovation and disruptiveness will improve as we make a distinction between value and profit, and between disruptive and destructive.

In my opinion, each organization tries to deliver value to the outside world. Whether you supply a product or a service. Whether you aim to earn a profit or are a task oriented organization, someone has to belief your activities.

Whereas profit is the outcome of a monetary transaction, value is created by the usage of the offering: by using a product or using the products which result form a service. It is therefor that in modern marketing the influence of the user or receiver is so important: production determines the characteristics of a product or service, usage determines its value.

A monetary profit is neither a sufficient nor a necessary condition for the realization of value. Learning can add value by increasing a persons competences, by making an organization smarter or a society more egalitarian. Yet it can be very difficult to express these increases in monetary terms, necessary to determine the amount of profit.

Classical oriented economists and politicians will argue that learning will increase a person’s potential future income and that it would be justified that people would pay for their own education. This ignores the positive external effects of this education on the productivity and lives of other members of society, but it also ignores the risks of general economic factors which are as important for the realization of the potential income.

Value does not imply profits, hopefully profits do represent value.

Within the field of innovation, we often speak of Schumpeterian destructive innovation. With that economists indicate that often the creation of new things will result in the replacement of old products and services. Creativity is a source of more productive processes, of more attractive products and better services. A problem is the translation of a creative invention into a sustainable innovation. Frequently, the proof of the superiority of an innovation is backward looking. Economists can give a long list of inventions which were technically superior to other inventions, but did not survive the competition.

Disruption is something else; Christensen defines it as an invention, aimed at non-consumers and the bottom of an existing market. It becomes a successful innovation when it convinces non-consumers to use the product and slowly nibbles at the bottom of the existing market. These kind of innovations are characterized by a negative development: by removing features which are aimed at the upper part of the market, the product or service becomes less complicated and cheaper to produces. This results in a lower price. Both the decline in price as the concentration on the core features of the value offering, non-consumers will be convinced to try the new product.

Christensen predicts that the newcomer will, in time, move upwards in the market; the same propensity explains why the incumbent firms cannot counter the entry of the new firms at the bottom of the market. Given an initial position, existing customers expect the firm to add new features increasing quality and usability for the existing customers. However, this increase in quality will cause the costs of production to rise. It therefore not to be expected that incumbent firms are able to counter the entry of the new firms or even initiate a disruptive innovation in their own market.

Disruption adds additional products to total supply and can turn into a destructive force when the firm moves upwards. Creative destruction will be replacing existing products with superior competitors from the start.

Applying these concepts towards the educational sector, we have to distinguish new alternatives aimed at non-learners and alternatives replacing existing educational supply.

For example, studying physics through Youtube-movies can be inferior to an f2f education in modern laboratories. Yet, for some students it is the only way to study a subject, given their restrictions in terms of location, money or time.

Educational alternatives as Moocs can be disruptive in the sense that they offer non-learners a chance to (re)start an education by removing some of the barriers of traditional education. However, they will not be destructive in the sense that they will replace traditional education as long as they miss some of the essential features as certification and degree awarding. When they move up, for example when a firm uses Moocs as internal trainings programs, they replace part of the traditional education. Yet, they have a long way to go before free educational programs will take the place of traditional education.

(Open) Distance education is potentially more destructive than Moocs. In a world of fragmentation, where people want to find a personal mix of work, learning, personal time, there is a demand for just in time and just in case (formal and informal) learning. The supply determined approach of traditional education does not fit this modern way of life. So an open and creative approach to education could result in forms of education which will replace (destroy) the traditional 16 – 24 years oriented programs.

This depends, as Christensen et al. points out, on the way accreditation institution react. Incumberants will try to influence the quality “eisen”, to protect their own programs. So standaards can act as a barrier to entry, the same as in other sectors.

Soucrce: Christensen et al on disruption of education

So when Paul Prinslo remarks that: “In the context of Unisa, there is also ample evidence that some initiative is launched under the banner of “disruption” and “innovation” without considering the implications and impacts of these ideas on our students, staff and institutional well-being. Some of these also disrupt the core business of the institution to such an extent that the center does not hold, and that several systems cannot cope with the impact. I am OK with the idea of piloting a novel and disruptive idea alongside the main business  and then go big. But there seems to be a believe that starting small is not disruptive enough

I can sympathize with his feelings. Management at the Open university of the Netherlands also has the tendency to start developments that are criticized by the staff and students. I think that the educational sector globally is in a state of flux, ranging from financial problems of institutes to financial problems of students, from having to redefine their mission to dealing with the effects of the economic crises.

Yet, disruptive innovation has become a fashionable management term; sometimes disturbing your organization can be a good thing, often it is not. Organizations benefit from incremental changes. It shows good management: [most of the time] sudden changes indicate that management was not prepared for outside changes; incremental changes towards the new outside conditions give the opportunity to build on the existing competences and change them slowly. When the organization (management and non-management) are incapable to react to new conditions, they leave room for others to come up with creative new modes of education which better fit the new economic and social conditions. These trends could become destructive and replace educations as we know it.

Disruptive innovations are occurring in situations that traditional education ignores the potential group of non-learners increasing research efforts and raising demands on students to meet rising qualifications. The ignored group could become the target of organizations which supply a less complex and cheaper form of education.

Organizations should make a well balanced choice between stakeholders, potential students and competitors before drastically changing their existing business model.

Yet, I belief that especially the open universities of this world offer value to individual students but also to society as a whole by offering a formal education to those who otherwise would not be capable to increase their knowledge, be it a single course to increase their knowledge on a single subject, by taking several courses as lifelong learning or taking a full program as a second chance to education!!

And because a new version of something old can be beautiful:

(the original: https://www.youtube.com/watch?v=FaVDXyXqI9Q)

The Crowd and Open Education: resilience and sustainability

Updated July 21 2014

 Update:

A relevant quotation I found in my notes:

Paul Stacey

Crowd learning

Crowd learning describes the process of learning from the expertise and opinions of others, shared through online social spaces, websites, and activities. Such learning is often informal and spontaneous, and may not be recognised by the participants as a learning activity. In this model virtually anybody can be a teacher or source of knowledge, learning occurs flexibly and sporadically, can be driven by chance or specific goals, and always has direct contextual relevance to the learner. It places responsibility on individual learners to find a path through sources of knowledge and to manage the objectives of their learning. Crowd learning encourages people to be active in setting personal objectives, seeking resources, and recording achievements. It can also develop the skills needed for lifelong learning, such as self-motivation and reflection on performance. The challenge is to provide learners with ways to manage their learning and offer valuable contributions to others.

 

Deloitte University Press published an infographic on crowdsourcing. Crowdsourcing is defined as “an approach to harnessing the power of individuals to work to solve problems in a decentralized way”.

They distinguish five different kinds of crowd sourcing, using the crowd’s creativity and knowledge (competition, collaboration and voting), its funds (funding) or its labour power (labor). According to the writers, Rob Hamill, Emily Malina and Elizabeth Pal, each form of crowd sourcing is applicable in certain situations and will be contra-productive in other situations.

The table below gives an overview of the different ways of crowd sourcing, the video has some funny examples, starting with 1714 as start of one of the first crowd sourcing projects.

 

Form Pro Contra
Crowd CompetitionCrowd competition refers to the hosting of contests in which participants work individually or in groups to come up with a solution to a given problem. The outputs may include many viable ideas or solutions.
  • creating actional solutions
  • developing prototypes
  • Generating outside ideas
  • predetermined desired outcomes
  • lack of resources to review submissions
  • building community
Crowd Collaboration
Crowd collaboration requests the input of decentralized individuals to develop, aggregate, and share knowledge and information across a pool of contributors, generally through a loosely controlled web-based platform. The typical outputs of a crowd collaboration effort are collective concepts with shared buy-in.
  • building and sharing knowledge
  • responding to emergencies
  • shared policies
  • User anonymity
  • Small and inactive crowds
  • Promoting individuality
Crowd Voting
Crowd voting is the process of turning to the crowd to reach a decision. This practice typically involves inviting participants to help make a decision based on pre-defined options.
  • Decision making
  • Rating and ranking
  • Quality assurance
  • Strategic decision making
  • Political sensitive issues
Crowd FundingCrowd funding is the process of funding projects through small contributions from a large group of participants. Crowdfunding activities are typically hosted through web-based platforms.
  • Fundraising
  • Disaster relief
  • Start-ups
  • High transparency

 

  • Ongoing operations
  • Loosely structured initiatives
  • High short term expectations on returns
Crowd Labor
Crowd labor refers to the engagement of a distributed labor pool to accelerate the completion of large-scale projects by splitting up a task into components that require little creativity or coordination but that cannot be automated.
  • Creating actionable solutions
  • Data entry and validation
  • Translation (eg language)
  • Digital archiving
  • Unstructured tasks
  • Subjective tasks
  • High-level thinking

As I argued before, the sustainability (or resilience to use a new buzz word) of business models for Open Education will depend on the inclination of people and institutions to cooperate either on the input/production side as on the user/learner/consumer side of the business model. As crowd sourcing is a form of this kind of collaboration, it could generate knowledge on the the potential success factors by reversing this table and apply the pro’s and contra’s to different systems of Open Education.

Crow Labor is one of the most used forms of Crowd Sourcing in the development of Open Educational Resources. Organisations as the Saylor.org, Merlot.org rely heavily on materials of others. However, this kind of free labour has also some aspects of Crowd Collaboration because it is not necessarily about projects which “require little creativity or coordination”.

Crowd Competition is seen in situations in which organisations as the EU, Hewlett foundation or the American government ask for proposals which will be subsidized. On an individual level, these calls will be passed on towards teachers and other educational developers to come up with the creative solutions to win the funds.

It can also be used as an instrument to start-up a new data-base or website on educational resources and programs. By setting a suitable reward, the system can generate a certain minimal critical mass, above which it will be interesting for other partners to participate.

Crowd Voting is often used to give an indication of the quality of the resources or programs. For a ranking to be functioning, there have to be enough votes and the voting public has to be something of an “in-crowd” of experts.

The remaining form of Crowd Sourcing is the financial form, Crowd Funding. According to the authors, this instrument is unsuitable for ongoing operations and loosely structured initiatives. Yet, I have the impression that several non-commercial projects depend on one large fixed subsidizer and a fringe of minor short-term donors.

Concluding, the examples of Open Educational Resources and Open Education show that the forms of Crowd Sourcing as described by Hamill, Malina and Pal is not complete; there are other situations which can only partially described by this taxonomy. Especially the voluntary participation in high-knowledge projects does not fit either the Crowd Collaboration nor the Crowd Labor definitions.

Still, the research in Crowd Sourcing should generate a further understanding of these kinds of collaboration: the free contribution and exchange of educational materials between individuals and organisations. A better understanding of these phenomena will enhance the changes of success of the Open Education movement.

 

Education as a service: Moocs, ODL and production of knowledge.

Education As Service by Jiddu KrishnamurtiAs I have argued elsewhere, education resembles a service more than a product. The characteristics of a service are that production and consumption are simultaneously. Yet, education is special, in the sense that sharing is non rival; it has this characteristic in common with information and knowledge. When you teach something to someone, the knowledge is doubled in the sense that you both have the knowledge, whereas in the case of a rival service or product the seller transfers the use of the sold good over to the buyer. And sometimes the process of education increases the knowledge of the teacher throughout the process.

 The linkage between educational production and educational consumption is broken by the usage of distance learning. Instead of standing before a class delivering a lecture, the teacher designs a course, taking into account the perceived problems of students. In Open Education, Moocs or otherwise, students will be more diverse than in traditional education. To quote Andrew Ng

Throughout the entire MOOC creation process, educators must constantly be student-focused, figuring out what is the most useful content for their students to experience next. With no admissions office, on-line students are vastly more diverse than the students in a typical college classroom. They vary in educational background, learning ability, and culture. Students are also at different points in their life, and range from teenagers to working professionals to retirees, and may have different learning goals. Educators have to make classes accessible without underestimating student ability.

This could be interpreted as the hypothesis that good distance education requires better teachers than face-to-face education because of both the distance (making their didactical skills explicitly available) and the heterogeneity of students.

 A misunderstanding with regard to ODL is that on-line education is less expensive than face to face education. Experience shows that the costs of developing high quality distance materials is more expensive than developing a classroom lecture. However, the deliverance costs of distance education are less than those of the classroom lecture. Having made some calculations for a program we would develop in collaboration with traditional f2f-educational partners, we estimated that the break even point between the two methods was around the 60-100 students; below this amount of students, the higher development costs of ODL were not compensated by lower deliverance costs in comparison with the costs of the face to face situation. Of course each course can have a different break even point, but as a rule-of-the-thumb 100 students is a save number.

Part of these higher development costs is caused by breaking the direct linkage between teacher and student. In our experience at the Dutch Open University, the classroom teacher can partly be replace by high quality materials, partly by offering distance tutoring (email, webinars) and partly by organizing meetings between experts and students. In this sense I do not agree with the caricature Bob Samuels sketches in Inside Higher Ed, describing ODL:

The web also creates the illusion that all information is available and accessible to anyone at any time. This common view represses the real disparities of access in our world and also undermines the need for educational experts. After all, if you can get all knowledge from Wikipedia or a Google search, why do you need teachers or even colleges? In response to this attitude, we should recenter higher education away from the learning of isolated facts and theories and concentrate on teaching students how to do things with information. In other words, students need to be taught by expert educators about how to access, analyse, criticize, synthesize, and communicate knowledge from multiple perspectives and disciplines.

A Wikiversity Logo for Open Educational Resour...

(Photo credit: Wikipedia)

As we all know, there is a difference between data, information, knowledge and competences. The facts and figures resulting from web-research have to be put into a context to be understood. However, there is a world of difference between the facts and figures of the CIA Worldfactbook and ODL. And even within ODL we can make a distinction between simple components offered as Open Educational Resources (OER), full OER-courses as by Saylor.org, taped lectures and assignments (Moocs) and the distance courses as developed and offered by the Open Universities and similar institutions.

Each of these resources or courses, free or paid for, is designed within a certain didactical context, whether you agree with the chosen method or not. The free availability of information and data on the Internet should not be perceived as a treat to teaching, but as an advantage, at most a challenge when there are conflicting opinions on subjects.

I think that more free available information demands more (educational) experts to provide contexts and meaning to this avalanche of data. However, it still remains to be decided in which context the traditional teacher of Samuels is better than the on-line teachings in ODL. This does not only (and perhaps not even mostly) depend on the costs of producing education, but on the nature of the competences to be learned, but also on the economical and social situation of the learner. As Amanda Ripley showed us, ODL-courses can play a major role in the development of poor learners in developing countries/regions, or the underprivileged in richer countries.

However, as we see in the Netherlands, it are not only underprivileged or remote learners who profit from ODL. There are individuals studying degree programs to further themselves; there are also individuals and groups studying a single object or course because of a gap in their former education.

And agreed, in some situations, the “canned” teacher or peer support will not be enough. Other kinds of tutoring should and can be offered without relying on f2f support alone.

So from an international and even a national perspective on economic and social growth, distance education can be a good investment. Yet, good distance learning will not come cheap, unless there are very large groups of students interested in following the same subject at the same institution; putting the Massive in Moocs. Question is why educational institutions should participate in these programs.

Well, Kevin Kiley, in Mainstreaming MOOCs, interviews Mark Becker, Georgia State’s president. Kiley states that:

“He sees open, on-line courses as benefiting the university in three ways: by providing content — and therefore potential courses — that the university doesn’t offer, such as languages or highly specialized topics; by meeting demand that exceeds what the university has resources for, such as for some introductory classes; or by supplementing what faculty members do in the classroom. The technology could also allow for more flexible scheduling. Georgia State serves a high number of low-income students who often have to work, as well as nontraditional students who might have other demands on their times”.

So, ODL’s including but not exclusively Moocs, can be used to involve non-traditional groups in education (low-income, working). It can make education more efficient by providing education at lower costs and similar or higher quality and -assuming that more institutions participate- broaden the choices for students by collaborating in ODL, accepting each other courses and credits. However, openness may be taken equivalent to free, but it will still demand a lot of effort (and costs) to develop good quality ODL.

Another interesting feature is that open distance education either on paper or through the Internet is available for more than a quarter of a century. The correspondence education goes back to the 1800’s, the open universities were developed in the second part of the last century.

Open educational resources as a concept emerged in the 1990’s, the first projects were about the same time. Yet, the discussion on electronic and open learning as a disruptive mechanism to education is only started with the emergency of the first Moocs and their hosting companies as Edx an Coursera. From a business economics perspective, it is interesting to know if this has to do with the reputation of the providers, the acceptance of social media and openness or has their popularity to do with their commercial potential which is perceived but not yet realized?

On another note, I don’t think that Moocs are a true disruptive innovation to education as some argue; but that’s for another blog.

The Evolution of Distance Learning to the Digital Age