You Gotta Keep ’em Separated: How to Give CBE Breathing Room

Last month, I wrote about the inevitable “sausage-making” that occurs when organizations try to cram an innovative and potentially disruptive solution into their existing business models. My interview with David Schjelbal, Dean of UW Flex, underscored how competency-based education (CBE) needs to be set up separately for success. A new value proposition, such as moving online and out of a time-based system, requires new resources, processes, and even a very different revenue or profit formula that all need to be given the latitude to exist apart from the locked business model of the established institution.

The question is: how exactly do you do that? I asked Southern New Hampshire University President Paul LeBlanc how he was able to set up what are now four different units—SNHU’s main campus, SNHU Online (COCE, College of Online Continuing Education), College for America (CfA), and Motivis Learning—all under the auspices of Southern New Hampshire University.

In excerpts from the interview, LeBlanc discusses the ways in which he borrows from the playbook of disruptive innovation in order to ensure that each of these four organizations have the requisite “breathing room” to thrive.

Weise: When you took the helm at SNHU, how did this all unfold? Can you provide some granular details about how you were able to structure SNHU, SNHU Online, and College for America as separate units?

LeBlanc: When I came on board, by 2003, there was a modest size [distance education] program up and running—not huge…and they were making some revenues for the university. It was a nice little operation, and that’s all it was. And my sense at that point was that we had an opportunity to do much more: we needed to take this asset and run with it. We had some experience. We knew how to offer high quality programs. It wasn’t as strong as it needed to be. We had to reinvent and improve systems, etc., but we decided to make a run with it.

By 2005 or 2006, I moved our online operation off campus because—now, this is all right out of Clay[ton Christensen]’s playbook—I wanted to get some out-of-sight, out-of-mind benefit and needed to change the culture. I wanted them to operate more like a for-profit in terms of urgency, speed [speed-to-lead strategies], data, and customer service, while holding onto a high standard of quality.

Literally, when we moved into the mill yards of Manchester, I had some basic rules: No one could have an office, and if there were exceptions—there were a handful of people who had to have offices—they had to have glass walls and no doors. I know it sounds goofy, but the group that was working there hunkered down in their offices and had their doors closed and there was little sense of collaboration and urgency.

We decided to change the culture. We would be collaborative. We’d all have to work together. This was going to be hard—a big lift….

We really tried to change things up. We got a new person to head up the operation, and we started white-boarding all of our processes, and they all looked like schematics of a nuclear submarine. And if you took a look at what students had to navigate in the steps…it was all built to replicate the main campus, so we started streamlining and we gave up on trying to do our own inquiry management, and we farmed that out to a third-party company. And they helped us streamline our processes. We learned a lot of lessons from them and eventually brought those processes and functions back in-house, but in much better and effective form.

From there, our online division took off with a great leadership team in place, an enormous amount of hard work, and an inordinate focus on serving students.   

Similarly, in 2011, I was starting to think about where we would want to make investments in new program ideas. Even though we were on a sweet spot of the growth curve for Online, I wanted to take that opportunity to start thinking about what would be the next big thing for us.

I wrote a little white paper titled, “The Next Big Thing?” and it was the broad conceptual outline for what became [College for America]. We took a little bit of surplus we were working with and created the Innovation Lab. The Innovation Lab was my attempt to find space for a team of people to work on this concept—to work out what that would look like.  And to do it off the radar screen, unconstrained by our own existing practices.

At the time it was called Pathways (its project name)…lots of thinking about new models, less expensive models, reaching markets that were underserved—again, right off of Clay[ton Christensen]’s book—in this case, focusing on a  non-consuming or low-consuming market. In every instance, I think there are some basic rules of the game that we play by that are very much informed by Clay’s research: physical distance, room to play by different rules, finding underserved markets, clarity about the job we are doing. We created the Innovation Lab and put them in a different location.  Just as we moved Online from the main campus, we moved CfA/Innovation Lab away from Online.

MRW: So you were able to separate them physically, but how were you able to make this work with a shared governance structure?

One of the reasons our online program was able to grow so fast is that we were able to negotiate some breathing room within our governance framework with our faculty. And that allowed Online not to fall into the quagmire that so many not-for-profits get into when they do online education. Similarly, when we created College for America, it got even greater distance from the governance process. There was coordination, but it really stood almost outside of traditional campus-based governance.  Each unit now has a governance structure designed specifically for its particular needs and culture.

We believe in decentralization. So each business/academic unit is quite separate from each other because the jobs to be done that each are asked to do are quite different, thus the student markets that they serve are very different. Thus they need to have their very specific structures, culture, governance, and way of being in the world, if you will.

As I mentioned, every unit now has its own discrete governance process. And I don’t know of any other not-for-profit that has done that.

MRW: It’s difficult for me to think of one either. How would you characterize your role in this move to keep all the units separate?

So, the folks at Online often thank me for buffering them from the main campus and giving them room to grow. Part of my job was keeping the main campus at arm’s length, letting them build systems the way they needed to build. They have their own marketing staff. We were deeply decentralized, and they loved it, and they talk again and again about how important that was. When we launched the Innovation Lab and College for America, they wanted to own that. “We can do that! We know that world. We know that market.” And I said, “No, not really. We’re going to do something a little different over here.” So the same phenomenon that was happening on the main campus where the main campus was trying to pull [Online] back to recreate them in their own image, they were trying to do that with the Innovation Lab/College for America.

It’s not ill-intended or from a bad place; it is just the inherent propensity of the incumbent to want to own the new and to make the new play by the incumbent’s rules and way of seeing the world.  Clay outlined this phenomenon in his earliest work.

It just bears out Clay’s argument—why you have to separate—why you physically have to separate if you truly want to innovate and reinvent the game you are playing.

Online is still a little skeptical of competency-based education (even as they remain supportive) – [College for America] hasn’t worked out its business model yet. It hasn’t proven itself yet. It is still figuring it out. That’s part of the innovation process – it takes a while to get it right, to figure it out. And now we’re spinning out the learning platform, Motivis Learning, from CfA. And you know, there was a little bit of the same dynamic. It was really kind of painful for [CfA] to let it go—wasn’t sure that they couldn’t do it. So it plays out over and over and over again, and it has nothing to do with good or bad ideas or smart or not smart thinking – it’s the larger cultural and organizational dynamic of incumbents and new foreign “tissue.”

LeBlanc’s experiences underscore the allure of trying to fit a new idea into the old RPP (resources, processes, and priorities) of the existing organization. It is extremely enticing to build and innovate from within, but there is a strong case to be made for giving new endeavors full autonomy.

This is a brief glimpse into the origins of an online competency-based program like CfA, and as LeBlanc acknowledges, CfA is still figuring things out. Whether CfA is a disruptive innovation is a separate question, but it is trying to figure out how to target the bottom 10 percent of wage earners within their 70+ partner companies. The college is thinking deliberately about nonconsumers of higher education and pursuing a very specific niche of the marketplace of lifelong learners.

It’s fascinating how LeBlanc took his cue from IBM, which had set up a separate personal computer unit in Florida—far from its mainframe and minicomputer business units in New York and Minnesota. In order to instill a new culture, LeBlanc made sure to set up physical distance between the new growth units and the existing organization. This, for him, was a key move in getting away from forced conformity to the embedded inefficiencies—the habits, the culture, and dominant business model of the existing organization—or the way things had always been done.

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.