Clayton Christensen, author of the path-breaking books The Innovator's Dilemma and The Innovator's Solution, is concerned that a "disruptive innovation" is about to overturn the success of the Harvard Business School where he teaches. In a recent speech at the Open Source Business conference in San Francisco, he explained how his students have become so "data-driven" that they are unable to imagine the disruptions that lie on the horizon. This leaves them vulnerable, as he sees it. 
Harvard Business School, he explains, is in danger of being over-run by corporate universities (like GE Crotonville), on-the-job training and web-based technical schools like the University of Phoenix.
"When we were having this case discussion about the disruption of Harvard Business School, I walked into the classroom and took a vote of the students, and there were 100 students in the class," he explains. “'How many of you think Harvard’s in trouble?' Three students raised their hand; 97 -- there were no abstentions -- voted that, 'Don’t worry, be happy, this could never happen to our school.'”
"And so I asked if one of the three who was worried why he was worried and he said, 'Well, there’s a real pattern here,' and he lists out the elements of the pattern and then he said, 'Now look in the case and everything that happened to all of these other people is happening to us. That’s why I am worried.' So then I turned to the don’t -- worry -- be -- happy crowd and said, 'So why aren’t you worried because it fits the pattern so closely?'”
"And everything that they cited related to the data, that more people are applying to Harvard then ever before, our students are getting more money than ever before, and the more money they get paid, the higher…we’re much further ahead of Stanford on the rankings, and so on. And so we had this argument back and forth."
"So then I asked one of the students who was the most vociferous defender of Harvard’s invincibility, 'So imagine you were dean of the school, what evidence would you need to see to become convinced that this is a problem that we need to address?' And he said, 'Well, I would look at Harvard’s market share amongst the CEO’s of the global 1000 corporations, and if it starts to dip, then I’d worry.'”
"And I said, 'Well, when you saw that data, would it signal that the problem needs to be addressed, or that the game is over?' He said, 'Oh, yeah, the game would be over!' And so I turned to the rest of the don’t -- worry -- be -- happy crowd and said, 'So any of the rest of you, imagine you were dean. Could you give me data that would convince you that it was time to take action?' And actually, every piece of data that they could come up with was evidence that the game was over."
One key insight that emerged from Chistensen's exercise is that data and analysis revolve around the past, leaving us blind to the threats and opportunities of the future. "And yet, the way we teach our students, at our school we teach by the case method and if the student makes a comment in a case discussion that can’t be backed up by his analysis of the data in the case, the instructors are trained to crucify the student on the spot," he notes. "And so we enshrine the virtues of data -- driven analytical decision making in the way we teach at our business schools, and the our students go to work for McKinsey and they carry data-driven analytics to the nth degree, but in many ways the very ways we teach them condemns our managers to take action when the game is over."
I'm tired of Clayton using his Innovator's Dilemma hammer on every problem he confronts. Resource Dependency, the core of his theory, is bound like all theories and does not explain a great deal of what is happening or why. The theory explains, no describes, why some firms fail to detect/react to certain types of changes in their environment.
Thus HBS's environment is not characterized by Clayton's twist on Dependency Theory. To understand the environment one is much better served using Porter's Strategic approach (Harvard's Strategy Approach). That is, how is value being created and what is the most efficient division-of-labor possible given resource allocations. Clayton's lens can then possibly be used probe for blind spots.
Is HBS vulnerable to change? Absolutely. A more thoughtful question is to ask what aspects of HBS's many offerings are vulnerable (How is value be created and delivered). To look at the whole of HBS as one is to fail to understand what HBS is all about. HBS may be an institution, but it is also a wide array of organizational groups delivering value to many different constituents in many different ways.
One possible reason that only 3 students were concerned and the other 97 were nonchalant (even knowing of the great theory) may be that the question (i.e., theoretical lens presented by Clayton) does not provide sufficient context to be employable as a basis for inference.
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While I agree that HBS could be threatened by disruptive innovation, corporate schools are equally risk.
What is it that any particular school offers once knowledge is distributed broadly and freely? What is it that differentiates any school?
(Think open source education.)
It's accreditation -- a certification process that assures the market that an individual has mastered knowledge to the point where they can apply the knowledge effectively.
At this time, corporate schools only have an edge in the market place from 1) closed or captive markets (i.e., EDS or IBM or other corporation providing a certificate of achievement to their own employees completing internally provided coursework) or 2) flexible distribution that meets the needs of the consumer. Were HBS to attain compete in the same market space, other education providers will only have accreditation on which to compete.
Note the real disruptive force of education in its infancy at MIT's OpenCourseWare (which does not *yet* offer accreditation); what happens when anybody and everybody has access to MIT-calibre education around the world AND can get certification from the same? Would an employer rather have MIT or a GE-Crotonville or University of Phoenix degreed employee? Which would you choose as a hiring manager and why?
Permalink to CommentBritton writes"
"One key insight that emerged from Chistensen's exercise is that data and analysis revolve around the past, leaving us blind to the threats and opportunities of the future."
Not entirely true. The data that the students cited revolved around the past and indicated the game was over. This does not mean that there is not data that can be useful to plan for the future. It means the students have not been taught where to look for relevant data.
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