Coevolving Innovations

… in Business Organizations and Information Technologies

Disruptive innovation in services

Everyone seems to get the idea about disruptive innovation in product development.  Clayton Christensen‘s original research that led to The Innovator’s Dilemma was based on the challenge of 3.5″ disk drives and 5.25″ disk drives.  The ideas on disruptive innovation in services wasn’t so obvious to me, until I heard Christensen’s lecture on how business schools such as Harvard and Stanford seem to be overshooting the marketplace.

I was listening to an audio recording from IT Conversations, with Clayton Christensen speaking at the Open Source Business Conference 2004.  I’ve read Christensen’s writing some time ago, and was impressed by his style of presenting.  He speaks slowly and clearly, and his students must love him.  I’d heard most of the content before, but was impressed by an anecdote that is actually written up in The Innovator’s Solution (in Chapter 9):

[Clayton Christensen] … had written a paper that worried that the leading business schools’ traditional two-year MBA programs are being threatened by two disruptions. The most proximate wave, a low-end disruption, is executive evening-and-weekend MBA programs that enable working managers to earn MBA degrees in as little as a year. The most significant wave is a new-market disruption: on-the-job management training that ranges from corporate educational institutions such as Motorola University and GE’s Crotonville to training seminars in Holiday Inns.

Christensen asked for a student vote at the beginning of class:  After reading the paper, how many of you think that the leading MBA programs are being disrupted?  Three of the 102 students raised their hands. The other 99 took the position that these developments weren’t relevant to the venerable institutions’ fortunes.

Christensen then asked one of the three who was worried to explain why.  “There’s a real pattern here”,  he responded, and he listed six elements of the pattern. These included MBA salaries overshooting what operating companies can afford; the disruptors competing against nonconsumption; people hiring on-the-job education to get a very different job done; a shift in the basis of competition to speed, convenience, and customization; and interdependent versus modular curricula. He concluded that the pattern fit: All of the things that had happened to other companies as they were disrupted were indeed under way in management education. “That’s why I’d take this seriously,” he concluded.1

The story goes on, with a question about whether it’s a “game over” situation.  In a footnote a potential future is described:

Instead of simply selling cases and articles, a better strategy for [business schools] would be to create value-added curriculum modules that would enable tens of thousands of corporate training people to quickly slap together compelling content that helps employees learn exactly what they need to learn, when and where they need to learn it. It would also be critical to enable these trainers to teach these materials in such compelling and interesting ways that none of these on-the-job students has any desire ever to sit through a business school professor’s class again. If history were any guide, if the publishing divisions of the business schools did this, they would ultimately have a far broader impact, and be far more profitable, than their existing on-campus teaching organizations.2

This might make the publishing divisions happy, but not the traditional university administration.

For an organization, this type of change could be seen as a reconfiguration of work, as described in service system evolution.  The reason that business schools are a good example is that they provide a well-established service, but they’ve been moving farther and further upscale.  In the recorded talk, Christensen mentioned the distance learning programs of University of Phoenix as a direct competitor.  In addition, The Economist reported:

For the past 50 years America has effortlessly dominated the market for international students, who have brought both direct and indirect benefits. Not only are they contributing some $13 billion a year to America’s GDP, they are also supplying brainpower for its research machine and energy for its entrepreneurial economy. But now America’s leadership is under challenge. The Institute of International Education reports that the number of foreign students on American campuses declined by 2.4% in 2003-04, the first time the number has gone down in 30 years. Foreign applications to American graduate schools fell by 28% last year, and actual enrolment dropped by 6%.3

I wonder if I’m a part of a trend. Here’s my personal academic affiliations:

I’m affiliating less and less with American universities, and more with other international players. My son can spend a year in China, all costs included, for the tuition fee of a single year at Northwestern University.  (The Kellogg School fees are nearly three times, that).  University education in Finland is still free for foreign students.

U.S. business schools feel like a service industry under disruptive innovation.


1Clayton M. Christensen and Michael E. Raynor, The Innovator’s Solution: Creating and Sustaining Successful Growth, Harvard Business School Press, 2003, pp. 244-245.2Christensen & Raynor (2003), chapter 9 footnote 11, p. 262.

3“Wandering Scholars, The Economist, September 8, 2005, accessed at http://www.economist.com/displaystory.cfm?story_id=4340017 .

1 Comment


Leave a Reply

Your email address will not be published. Required fields are marked *

  • RSS qoto.org/@daviding (Mastodon)

  • RSS on IngBrief

    • The Nature and Application of the Daodejing | Ames and Hall (2003)
      Ames and Hall (2003) provide some tips for those studyng the DaoDeJing.
    • Diachronic, diachrony
      Finding proper words to express system(s) change(s) can be a challenge. One alternative could be diachrony. The Oxford English dictionary provides two definitions for diachronic, the first one most generally related to time. (The second is linguistic method) diachronic ADJECTIVE Oxford English Dictionary, s.v. “diachronic (adj.), sense 1,” July 2023, https://doi.org/10.1093/OED/3691792233. For completeness, prochronic relates “to […]
    • Introduction, “Systems Thinking: Selected Readings, volume 2”, edited by F. E. Emery (1981)
      The selection of readings in the “Introduction” to Systems Thinking: Selected Readings, volume 2, Penguin (1981), edited by Fred E. Emery, reflects a turn from 1969 when a general systems theory was more fully entertained, towards an urgency towards changes in the world that were present in 1981. Systems thinking was again emphasized in contrast […]
    • Introduction, “Systems Thinking: Selected Readings”, edited by F. E. Emery (1969)
      In reviewing the original introduction for Systems Thinking: Selected Readings in the 1969 Penguin paperback, there’s a few threads that I only recognize, many years later. The tables of contents (disambiguating various editions) were previously listed as 1969, 1981 Emery, System Thinking: Selected Readings. — begin paste — Introduction In the selection of papers for this […]
    • Concerns with the way systems thinking is used in evaluation | Michael C. Jackson, OBE | 2023-02-27
      In a recording of the debate between Michael Quinn Patton and Michael C. Jackson on “Systems Concepts in Evaluation”, Patton referenced four concepts published in the “Principles for effective use of systems thinking in evaluation” (2018) by the Systems in Evaluation Topical Interest Group (SETIG) of the American Evaluation Society. The four concepts are: (i) […]
    • Quality Criteria for Action Research | Herr, Anderson (2015)
      How might the quality of an action research initiative be evaluated? — begin paste — We have linked our five validity criteria (outcome, process, democratic, catalytic, and dialogic) to the goals of action research. Most traditions of action research agree on the following goals: (a) the generation of new knowledge, (b) the achievement of action-oriented […]
  • Recent Posts

  • Archives

  • RSS on daviding.com

    • 2024/06 Moments June 2024
      Summer jazz at the Distillery District, in Washington DC while at the annual systems conference, and then Toronto Jazz Festival
    • 2024/05 Moments May 2024
      Busy May with art university graduate exhibition, travel to UK seeing Edinburgh, Hull, Manchester, London, returning home for wedding in Lefroy, annual cemetery visits with family, and spending time with extended family in from Chicago.
    • 2024/04 Moments April 2024
      Return from visiting family in Vancouver BC, clan events and eldercare appointments
    • 2024/03 Moments March 2024
      More work than play for first part of month, in anticipation of trip to Vancouver to visit family.
    • 2024/02 Moments February 2024
      Chinese New Year celebrations, both public and family, extended over two weekends, due to busy social schedules.
    • 2024/01 Moments January 2024
      Hibernated with work for most of January, with more activity towards the end of month with warmer termperatures.
  • RSS on Media Queue

    • What to Do When It’s Too Late | David L. Hawk | 2024
      David L. Hawk (American management theorist, architect, and systems scientist) has been hosting a weekly television show broadcast on Bold Brave Tv from the New York area on Wednesdays 6pm ET, remotely from his home in Iowa. Live, callers can join…Read more ›
    • 2021/06/17 Keekok Lee | Philosophy of Chinese Medicine 2
      Following the first day lecture on Philosophy of Chinese Medicine 1 for the Global University for Sustainability, Keekok Lee continued on a second day on some topics: * Anatomy as structure; physiology as function (and process); * Process ontology, and thing ontology; * Qi ju as qi-in-concentrating mode, and qi san as qi-in-dissipsating mode; and […]
    • 2021/06/16 Keekok Lee | Philosophy of Chinese Medicine 1
      The philosophy of science underlying Classical Chinese Medicine, in this lecture by Keekok Lee, provides insights into ways in which systems change may be approached, in a process ontology in contrast to the thing ontology underlying Western BioMedicine. Read more ›
    • 2021/02/02 To Understand This Era, You Need to Think in Systems | Zeynep Tufekci with Ezra Klein | New York Times
      In conversation, @zeynep with @ezraklein reveal authentic #SystemsThinking in (i) appreciating that “science” is constructed by human collectives, (ii) the west orients towards individual outcomes rather than population levels; and (iii) there’s an over-emphasis on problems of the moment, and…Read more ›
    • 2019/04/09 Art as a discipline of inquiry | Tim Ingold (web video)
      In the question-answer period after the lecture, #TimIngold proposes art as a discipline of inquiry, rather than ethnography. This refers to his thinking On Human Correspondence. — begin paste — [75m26s question] I am curious to know what art, or…Read more ›
    • 2019/10/16 | “Bubbles, Golden Ages, and Tech Revolutions” | Carlota Perez
      How might our society show value for the long term, over the short term? Could we think about taxation over time, asks @carlotaprzperez in an interview: 92% for 1 day; 80% within 1 month; 50%-60% tax for 1 year; zero tax for 10 years.Read more ›
  • Meta

  • Creative Commons License
    This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License
    Theme modified from DevDmBootstrap4 by Danny Machal