MOOC’s Disruptions

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MOOC’s Disruptions

Posting this article by  Michael Horn & Clayton Christensen on my blog as a prelude to exploring the disruption MOOCs are having to traditional course delivery in higher ed. Here is a worthwhile video on this subject:

Risk and Resilience:

Virtualization is Transforming Outdated Infrastructure in 2013



Beyond the Buzz, Where Are MOOCs Really Going?


Everyone’s going MOOC-crazy these days. From frequent media coverage of online courses and platforms like Coursera, edX, Udacity, and Udemy to discussions about the complexities and business models of online education, the excitement around MOOCs (Massive Open Online Courses) has finally “bubbled” over.

The question is not just whether MOOCs are going to disrupt traditional education, but how. Is it just about lower costs and access? Is it really going to be a Napster-like moment with entrenched “Teamsters in tweed” worried about the erosion of their research, publishing, and teaching?

This is where we can leave the realm of hype and commentary to draw on our own years of research into disruption theory. Because the curious thing about the MOOC wave of disruption is that the market leaders — not just upstarts from the edges — are the ones pioneering it. And that rarely happens.

But First: Are MOOCs Really ‘Disruptive’?

Yes, the word “disrupt” is overused. But it has a specific meaning when we’re talking about it. And MOOCs do bear the early hallmarks of a disruptive innovation:

Serves non-consumers. MOOCs are limited in the services they provide compared to traditional colleges, yet at the same time they are free and more accessible — which allows them to serve those who couldn’t otherwise access traditional higher education. Similarly, Toyota’s early cars didn’t match the reliability of Detroit’s automobiles. But they were more affordable and convenient, so the company first served people (“non-consumers”) for whom the alternative was, quite literally, nothing.

Marches upmarket. Instead of serving the same customers at the outset or competing head-on with established products, disruptive innovations improve over time to march upmarket. Eventually the quality becomes just good enough for the established customers to flock to it. It’s worth noting that the upmarket march is enabled by some key technology — such as bandwidth, video quality, online sharing tools, etc. — which is why MOOCs may now be having their moment, even though they’ve been around for years.

Redefines quality. Eventually, the disruptive innovation changes the very definition of quality in a marketplace. In the current university system, for example, most faculty are rewarded for the quality of their research — not for the quality of their teaching. But the medium and scale changes things; in the future, courses might be offered based on employer demand, not faculty research interests. MOOCs are already evolving in some ways away from traditional educational constraints: Udacity’s courses, for example, have shifted from a time-controlled to a more competency-based learning model that takes advantage of the online medium.

Does Who Is Doing the Disrupting Matter?

Given the above criteria, it’s unusual, and remarkably difficult, for established market leaders to pioneer — or even catch up — with disruptions.

Yet interestingly, the big, reputable universities are the ones leading the MOOC wave. This includes MIT and Harvard (through edX) as well as Stanford, whose groundbreaking AI course morphed into Udacity (and whose professors independently founded Coursera).

It’s not that established players can’t see the disruptions coming; they almost always do. There are just several other forces at play that cause market leaders to ignore them. For example, disruptive innovations don’t look that attractive, profitable, or prestigious early on. Or the company’s best customers signal that they don’t care for them (at least initially). But universities are likely investing in MOOCs now because disruption theory is finally widely enough understood that astute leaders know how to identify and chase opportunities early.

It’s not that established players can’t see the disruptions coming; they almost always do.

When established players want to (successfully) catch a disruptive wave, however, they have to set up an autonomous business model with different resources, processes, and priorities. Otherwise, the very capabilities that serve them well in their traditional business can represent liabilities in the one they’re disrupting. This is how IBM was able to go from the mainframe to personal computing business in the ’80s and ’90s, and it’s why MOOCs have done well in spinning themselves off into separate entities.

Although the big three MOOCs — Coursera, edX, and Udacity — all leverage capabilities from their “parent” universities, they still have to be careful about which ones to adopt and which ones to avoid. Ideally, they should be able to pull what they want instead of having their university parents push resources (like administrative processes) to them.

The only place the direction of this relationship doesn’t matter, according to our research, is brand. Being associated with the likes of Harvard, MIT, and Stanford doesn’t hurt, especially when it comes to signaling quality (i.e., “endorser” brands), as long as the disruptor can signal some separation for a job well done (i.e., “purpose” brands) in the new disruptive realm — hence the power of the “X” in edX. Leveraging its brand helped IBM move through multiple disruptive waves.

So What Comes Next for the MOOCs?

The need for customization will drive us toward just-in-time mini-courses.

MOOCs can be much more than marketing and edutainment. We believe they are likely to evolve into a “scale business”: one that relies on the technology and data backbone of the medium to optimize and individualize learning opportunities for millions of students.

This is very different than simply putting a video of a professor lecturing online.

The initial MOOCs came from a “process business model” where companies bring inputs together at one end and transform them into a higher-value output for customers at the other end — as with the retail and manufacturing industries.

But over time, an approach where users exchange information from each other similar to Facebook or telecommunications (a “facilitated network model”) will come to dominate online learning. This evolution is especially likely to happen if the traditional degree becomes irrelevant and, as many predict, learning becomes a continuous, on-the-job learning process. Then the need for customization will drive us toward just-in-time mini-courses.

In this case, facilitated networks or adaptive learning platforms — like Khan Academy and Knewton — may actually be better positioned than MOOCs (in their current forms) to improve learning and serve massive numbers of students with tailored offerings. Such a transformation is not unlike what happened in the car industry: The Ford Model T dominated the American car market … until General Motors brought forth choice and variety.

Michael Horn & Clayton Christensen

Michael B. Horn is the co-founder and executive director of the education practice of Innosight Institute, a non-profit think tank applying the theories of disruptive innovation to solve problems in the social sector. Horn holds an MBA from Harvard Business School and BA in history from Yale University.

Clayton M. Christensen is an award-winning author and professor of Business Administration at the Harvard Business School. Christensen holds MBA and DBA degrees from the Harvard Business School, an M.Phil. in economics from Oxford University, and a B.A. in economics from Brigham Young University.

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