Innovator's Dilemma: When New Technologies Cause Great Firms to Fail/The Innovator's Solution: Creating and Sustaining Successful Growth, The

Academe, Jan/Feb 2005 by Birnbaum, Robert

But, as The Innovator's Dilemma notes, different market segments may have different notions of the attributes that must be satisfied before products may be considered equivalent. Academic institutions, and the clientele they serve, are very diverse. Even for the market segment that emphasizes employability, the comparatively low cost of local public two- and four-year institutions may offset the apparent advantages of simplicity and convenience offered by virtual education. And virtual education may not offer certain attributes of traditional education deemed critical by other market segments, such as prestige and opportunity for personal interaction.

Do colleges and universities have to choose between a virtual or a traditional focus? It might appear as if they should be able to retain their traditional campus-based processes while at the same time expanding their virtual programs, thus reaping the benefits of both. However, the model presented in these two books suggests that while traditional institutions may be able to operate small virtual programs, they will truly be able to exploit the technology only if they manage it through separate and independent governance structures that are not constrained by the value networks of the parent organization. For traditional colleges and universities, these value networks include not just suppliers and clients, but also concepts, such as academic freedom, shared authority, knowledge creation, and liberal learning, that are woven into the institutional fabric through tradition and the socialization of their participants. These values are not consistent with the limitations imposed by the requirements of virtual education. All organizational structures facilitate some processes and impede others; no structure can maximize all desirable values. DEC, for example, could never enter the personal computing business because its commitment to minicomputers forced it to "straddle the two different cost structures intrinsic to two different value networks." The logical conclusion of applying the theses of The Innovator's Dilemma and The Innovator's Solution to higher education may be that virtual education can thrive in traditional colleges and universities only if it operates outside their normal management and value frameworks, with the consequent risk of losing institutional control.

Why is it that a business can transform the technology it employs and still remain a business, while a college cannot? Part of the answer may lie in the different ways in which businesses and colleges define "success." The success of businesses is based on dominance as measured by market share and profit. Business leaders rationally decide to invest in innovations that promise the highest returns, and are reluctant to develop new products that are unwanted by their major and most profitable customers. In contrast, the success of traditional academic institutions is not measured by financial profit but rather by reputation, prestige, and influence. This does not mean that academic institutions do not chase dollars, but rather that becoming a leading institution does not necessarily depend on expanding markets. For businesses, as The Innovator's Solution points out, "growth is important because companies create shareholder value through profitable growth," and the key to growth is in disruptive rather than in sustaining technologies. But growth may be less important in academia, where prestige often depends instead on limiting markets (for example, through selective admissions) and on meeting societal expectations of what a college or university should be. Traditional academic institutions often try to serve their most prestigious customers, even at a financial loss, and programs that bring in financial resources but diminish prestige may find it difficult to flourish. Because the economic metrics of growth and market share are generally of limited consequence in academia, the questions proposed in The Innovator's Solution such as, How can we beat our most powerful competitors? and, Who are the best customers for our products? do not appear to be useful for most colleges and universities. "Beating" competitors in business may be a zero-sum, life-or-death struggle for survival; in higher education, rivalries may exist on the gridiron or in rankings of program quality, but academic institutions welcome the successes of their equals and band together with them for their mutual support. Stanford University, Williams College, the University of Wisconsin-Qshkosh and Miami-Dade Community College do not lose when Harvard University, Pomona College, the State University of New York College at IBrockport and Westchester Community College win.