Disrupting Class Michael B. Horn | | How Disruptive Innovation Will Change the Way the World Learns

Clayton christensen Review of disruptive innovation

Clayton christensen Disruption = affordability, accessibility Past and present examples Yesterday GM Dept. Stores State universities Digital Equipment Delta JP Morgan Xerox IBM Cullinet AT&T Sony DiskMan Today Toyota Wal-Mart Community colleges Dell Southwest Airlines Fidelity Canon Microsoft Oracle Cingular Apple iPod

CLAYTON CHRISTENSEN Disruption of Toyota From hyundaiusa.com May 5, 2013

CLAYTON CHRISTENSEN Disruption = affordability, accessibility Yesterday GM Dept. Stores State universities Digital Equipment Delta JP Morgan Xerox IBM Cullinet AT&T Sony DiskMan Past, present, and future examples Today Toyota Wal-Mart Community colleges Dell Southwest Airlines Fidelity Canon Microsoft Oracle Cingular Apple iPod Tomorrow Chery Internet retail Online universities Smart phones Air taxis ETFs Zink Linux Salesforce.com Skype Smart phones

Clayton christensen How does disruptive innovation relate to K12 education?

CLAYTON CHRISTENSEN Online learning is gaining adoption Substitution calculation indicates online learning is growing disruptively 50% of all high school courses online by 2019

CLAYTON CHRISTENSEN The rise of K-12 blended learning Definition of blended learning A formal education program in which a student learns at least in part through online learning, with some element of student control over time, place, path and/or pace at least in part in a supervised brick-and-mortar location away from home (such as school) The modalities along each student’s learning path within a course or subject are connected to provide an integrated learning experience.

CLAYTON CHRISTENSEN Emerging blended-learning models

Clayton christensen 1.Sell to educators in existing system 2.Sell to educators in sustaining innovation blended- learning models 3.Sell to educators in disruptive innovation blended- learning models Companies appear to have 3 options

Clayton christensen The decision matters

CLAYTON CHRISTENSEN Disruption is not a technology problem Performance Time Different Measure of Performance Tabletop Radios, Floor-standing TVs Path taken by vacuum tube manufacturers Pocket radios Portable TVs Hearing aids

CLAYTON CHRISTENSEN Systems disrupt systems Performance Time Different Measure of Performance Appliance Stores Component suppliers RCA, Zenith Sony, Panasonic Component suppliers Discount retailers

Clayton christensen Option 1: Selling to educators in existing system

CLAYTON CHRISTENSEN Blended Learning is not…

Clayton christensen Sustaining the chalkboard There has been a long history of selling technology to enhance the current classroom Performance Time Performance that customers can utilize or absorb

Clayton christensen Option 2: Selling to educators in sustaining innovation blended-learning models

CLAYTON CHRISTENSEN Disruption isn’t so straightforward Performance Time Different Measure of Performance Tabletop Radios, Floor-standing TVs Path taken by vacuum tube manufacturers Pocket radios Portable TVs Hearing aids

CLAYTON CHRISTENSEN Performance Time Disruptive Innovations Time Ability to use improvements Pace of performance improvement Performance The theory of hybrids Peapod: Are there customers that would love a car that won’t go far, and won’t go fast? Competing on design, reliability, and performance on the California Freeway Tesla $100,000 Prius Hybrid

CLAYTON CHRISTENSEN Performance Time Disruptive Innovations Time Ability to use improvements Pace of performance improvement Performance The theory of hybrids Smartphones The disruptive technology doesn’t invade and reform the existing system. Rather, new measures of Performance entice customers into the new system The metric of performance changes

CLAYTON CHRISTENSEN The theory of hybrids

CLAYTON CHRISTENSEN How to spot a hybrid 1.It includes both the old and new technology; pure disruption doesn’t offer old in full form 2.It targets existing users, not nonconsumers 3.It tries to do the job of existing technology 4.It is less foolproof than a disruptive innovation; does not reduce level of wealth and/or expertise to purchase and operate it

CLAYTON CHRISTENSEN Emerging blended-learning models

CLAYTON CHRISTENSEN Station Rotation Model

CLAYTON CHRISTENSEN How to spot a hybrid Traditional PLUS online Core subjects, mainstream students Measuring itself against traditional value proposition Requires expertise in both

CLAYTON CHRISTENSEN Station Rotation Model

CLAYTON CHRISTENSEN Lab Rotation Model

CLAYTON CHRISTENSEN Flipped Classroom Model

Clayton christensen Option 3: Selling to educators in disruptive innovation blended-learning models

CLAYTON CHRISTENSEN Prime examples of nonconsumption Credit recovery Drop outs AP/advanced courses Scheduling conflicts Home-schooled and homebound students Small, rural, urban schools Unit recovery Disaster preparedness Tutoring Developing countries Professional development Pre-K After school In the home Incarcerated youth In-school suspension School bus commute Summer school Teacher absenteeism Migrant worker families Foreign languages Budget cuts and teacher shortages are an opportunity, not a threat.

CLAYTON CHRISTENSEN Individual Rotation Model: Carpe Diem

CLAYTON CHRISTENSEN Carpe Diem

CLAYTON CHRISTENSEN Carpe Diem

CLAYTON CHRISTENSEN Flex Model

CLAYTON CHRISTENSEN A La Carte Model

CLAYTON CHRISTENSEN Enriched Virtual model

Clayton christensen The pluses and minuses of targeting disruption

Clayton christensen The markets appear either saturated or small Core academicsNonconsumption Sustaining Disruptive “No Excuses” Trad’l quality metrics Districts Charters Districts C C C C

CLAYTON CHRISTENSEN Traditional Classroom New value propositions Like all disruptions, disruptive blended-learning models deliver different value Disrupted Classroom IndividualizationProductivity Access, Equity

@christenseninst Disrupting Class How Disruptive Innovation Will Change the Way the World Learns Michael B. Horn

Clayton christensen Private enterprise & public education

Clayton christensen For-profits not inherently good or evil Far fewer inherent differences between for-profits and non- profits than many assume Differences between for-profits stem from corporate structure, where for-profits have owners and non-profits don’t Easier for for-profits to attract capital, scale, and possibly talent Easier for for-profits to focus Non-profits can remain rooted in a community in absence of market Incentives matter. Policies must encourage smart demand High-level conclusions

Clayton christensen For-profits not inherently good or evil

Clayton christensen Performance Time Disruptive Innovations Time Sustaining innovations Incumbents dominate sustaining battles Entrants typically win at disruption Customer ability to use improvements Pace of technological improvement 45% margin on $250,000 40% margin  20% margin on $2,000 60% margin on $500,000 Performance Sustaining vs. Disruptive Innovation

CLAYTON CHRISTENSEN INSTITUTE # christenseninst Understanding how users experience life “The customer rarely buys what the company thinks it is selling him.” Peter Drucker If a customer won’t pay them to do something, over time they won’t do it. Will chase their incentives and do what they are paid to do—not much more and not much less

Clayton christensen Far fewer differences

CLAYTON CHRISTENSEN INSTITUTE # christenseninst What is a business model? And why does it lock us in? PROCESSES: Ways of working together to address recurrent tasks in a consistent way: training, development, manufacturing, budgeting, planning, etc. REVENUE FORMULA: Assets & fixed cost structure, and the margins & velocity required to cover them THE VALUE PROPOSITION: A product that helps customers do more effectively, conveniently & affordably a job they’ve been trying to do RESOURCES: People, technology, products, facilities, equipment, brands, and cash that are required to deliver this value proposition to the targeted customers

CLAYTON CHRISTENSEN INSTITUTE # christenseninst What is a business model? And why does it lock us in? PROCESSES: Ways of working together to address recurrent tasks in a consistent way: training, development, manufacturing, budgeting, planning, etc. REVENUE FORMULA: Assets & fixed cost structure, and the margins & velocity required to cover them THE VALUE PROPOSITION: A product that helps customers do more effectively, conveniently & affordably a job they’ve been trying to do RESOURCES: People, technology, products, facilities, equipment, brands, and cash that are required to deliver this value proposition to the targeted customers Business units don’t change. Will fight a new order that fundamentally challenges how they make money But non-profits have business models, too, and will do the same

Clayton christensen For-profits not inherently good or evil Far fewer inherent differences between for-profits and non- profits than many assume Non-profits aren’t always virtuous Non-profits have business models, too For-profits won’t cut corners if customers will punish them for doing so In public education, historically, neither for-profits nor non-profits have actually saved the taxpayer much money because of policy  There is some sense in which they are all public entities because publicly funded High-level conclusions

Clayton christensen For-profits not inherently good or evil Far fewer inherent differences between for-profits and non- profits than many assume Differences between for-profits stem from corporate structure, where for-profits have owners and non-profits don’t Easier for for-profits to attract capital, scale, and possibly talent Easier for for-profits to focus Non-profits can remain rooted in a community in absence of market Incentives matter. Policies must encourage smart demand High-level conclusions