The running joke about higher education is that change doesn’t come eventually, but glacially. Much of academic inertia stems from the complicated business model of delivering higher education, not to mention the orchestration of multiple stakeholders on campuses: the administration, faculty members, trustees, senate committees, unions, and other governance structures. To exacerbate matters, time and precedence also tend to normalize processes that may have been jury-rigged in the past as workable solutions. Those within academia tend to become habituated to these constraints as culture, and processes become reified with the passage of time into embedded inefficiencies, or the way things have always been done at the institution.
These embedded inefficiencies help explain why traditional institutions continue to invest in innovations that drive prices up for the most sophisticated consumers of higher education. Such sustaining innovations are the opposite of disruptive innovations, which drive prices down and increase access to a larger group of people. With tuition costs that have more than doubled the cost of healthcare, it is no wonder that access and affordability are the buzzwords of the day. A critical inflection point in higher education is at hand: students are already beginning to question the return on their higher education investments and will only become savvier shoppers of higher education as the cost of a degree continues to rise and the gulf widens between graduates and the jobs available today.
As a result, more schools are taking the time to rethink their strategic plans, and many are moving toward competency-based education (CBE). Institutions are acknowledging the inefficiency of measuring learning by seat-time and are becoming more willing to experiment with competency-based programs to see how they can center on fixed learning outcomes.
With many schools in relatively nascent stages of building competency-based learning pathways, institutional leaders should understand that no matter how compelling competency-based education may be as a theoretical concept, these programs need to be set up for success. New ideas, products, or services demand different resources and processes to deliver on a new value proposition that may have a very different-looking revenue or profit formula. CBE programs must be given the latitude to exist apart from the embedded inefficiencies of the established organization.
The theory of disruptive innovation has a lot to offer by showing us how in industry after industry, the companies that are able to foster disruptive growth are the ones that house these innovations separately. As an example, when personal computers were first being commercialized, IBM set up a separate unit in Florida, far from its mainframe and minicomputer business units in New York and Minnesota. In its PC business model, IBM could make money with low margins, low overhead costs, and high unit volumes. Hewlett-Packard remained the leader in printers for personal computing because it created a division to make and sell ink-jet printers that was completely independent from its printer division in Boise, which made and sold laser jet printers. Charles Schwab set up its disruptive online brokerage venture by pricing online trades at $29.95, compared with the average price of nearly $70 that Schwab had been charging for trades executed through its telephone and office-based brokers. In other industries, Teradyne, the maker of semiconductor test equipment, became the leader in PC-based testers; Intel introduced its Celeron chip, which reclaimed the low end of the microprocessor market; and Dayton-Hudson launched Target as a low-end retail chain. These companies were able to succeed by setting up separate, autonomous organizational units to foster disruptive growth.
Without such decentralization or the separation of different units, any innovation will be forced to conform to the business model of the existing organization. Any institution intent on building a successful CBE program should be cognizant of the innovator’s dilemma, which captures how each established organization is hamstrung, as it sees the disruptive entrant making its way into the market but cannot do anything but develop sustaining innovations. The business model of the incumbent’s organization inevitably steers its leaders to invest in improvements that affect only its existing or most desirable or demanding customers.
The inevitability of this absorptive process was captured vividly in my recent interview with David Schejbal, Dean of University of Wisconsin-Extension’s division of Continuing Education, Online, and E-Learning, which oversees the CBE program called UW Flex. Schejbal said, “I’m now convinced that Clay[ton Christensen] was right. You have to house it separately.” He explained, “No matter what the idea or the purity of the idea is that is the impetus for a new idea or a new direction or a new program or a new project, because of the structure of the system, so many different people have the opportunity to augment it or change it that it ends up being something pretty different by the time—if it even happens—than what it started to be.”
Schejbal even alluded to a metaphor Christensen uses to describe the forces that encumber the legislative process. Even if a member of Congress were to identify and envision an innovative solution to a pressing societal problem, the introduction of a bill can evoke opposition from different constituencies, such as labor unions, the Chamber of Commerce, or a powerful senator threatening to block the legislation—all of whom must be appeased in some way. As a result, in order to garner enough votes to be enshrined as law, the bill is modified to address their concerns and fit the interests of those with powerful votes. The result is a final bill that only faintly resembles the original innovative solution.
In the case of UW, things get even more complicated when coordinating joint rule making between thirteen four-year universities and thirteen two-year colleges. Schejbal explained that no single person in the UW System—not even the President—has the power to move an idea forward, but there are many people who have the ability to stop, redesign, or restructure the new idea along the way, including the faculty who technically “own” the curriculum. He therefore likened the process to a kind of sausage making: “Everyone wants to get their hands on it, and by the end, the cut you started with doesn’t resemble what you consume.”
It is therefore no coincidence that places like Northern Arizona University have set up shop with a different set of full-time instructors hired specifically for its Personalized Learning CBE program. Southern New Hampshire University’s College for America (CfA) was housed separately from the SNHU Online program, which in 2005 was set up in the Manchester mill yards, physically removed from the SNHU campus itself. Today, CfA’s spin-off, Motivis Learning, its learning relationship management system, is also being housed separately—away from CfA—to give the fledgling unit its requisite “breathing room,” as SNHU President Paul LeBlanc calls it.
There are already inordinate barriers to change on a campus, so institutions looking to implement competency-based education would do well to facilitate the growth of these programs away from the hands, ownership, and competing channels of existing structures. Those in the early stages of experimentation should consider carefully how to separate their programs from the embedded inefficiencies of the university and give them full autonomy to experiment and figure out new business models. Otherwise, the CBE program that sounded so good in theory could end up more like bad sausage in practice.
Dr. Michelle R. Weise is a senior research fellow in higher education at the Clayton Christensen Institute for Disruptive Innovation. Michelle’s commentaries and research have been featured in a number of publications such as Harvard Business Review, The Economist, The Boston Globe, Inside HigherEd, The Chronicle of Higher Education, and USA Today. She is the co-author with Clayton M. Christensen of Hire Education: Mastery, Modularization, and the Workforce Revolution.