Clayton Christensen |

One of the core findings from our studies of disruptive innovation is that in order for an incumbent to catch a disruption, an organization often must set up an autonomous unit complete with its own business model – its own resources, processes, priorities, and profit/revenue formula – with the mission to seize a nascent opportunity, grow, and be unencumbered by the parent organization. It’s not at all an easy thing to do; we don’t see it happen that often.

As disruption increasingly comes to higher education, on the surface anyway Tiffin University appears to be taking a page from the Innovator’s Solution as it sets up an autonomous online two-year degree program for an associate of arts degree in general studies. They’ve even branded it differently from the parent: Ivy Bridge College.

You can read about it on this Inside Higher Ed article. The online degree program will fill a gap in offerings in the space and target many who are overshot by existing offerings or are nonconsumers, including students who can’t afford a four-year college, those who would have to commute or leave a job to relocate or something to attend college, students who aren’t confident enough or ready to go to college yet, students with disabilities, and those who were home-schooled who might prefer to study at home initially.

They are partnering with some interesting players like InsideTrack, who provide student coaching services. The idea of the degree is to feed the students into bachelor programs at other institutions ultimately.

Are there other examples of this? This seems to be quite different from the MIT OpenCourseWare decision and Yale posting its lectures to iTunesU, for example.

Even as concerns mount that too many of our nation’s children are unprepared for and not attending college, thousands of students in California are clamoring each year for such a college experience in the state’s university system.

Unfortunately for them, the California State University system announced it will cut back its total enrollment by about 10,000 students next fall. That is 10,000 students to whom California is now saying in essence, “Maybe college isn’t that important for you after all.” Talk about a mixed message.

Increasingly, policymakers, foundations, academics, and educators are lining up behind the goal of students not just graduating from high school, but also graduating ready for a postsecondary education. The Gates Foundation places its muscle squarely behind this goal. Academics point out that now, more than ever before, a postsecondary education is necessary to command a reasonable wage in the workforce. And educators like Larry Rosenstock, CEO of High Tech High in San Diego, speak persuasively about the need for students to graduate well prepared for college.

Judging from attendance in the full-time and part-time programs at California State University campuses, many students are getting the message. Roughly 460,000 students are enrolled this year.  But if this number is capped at 450,000 for next year, realization of the college-ready goal will be an empty pledge.

Chancellor Charles Reed said the need to scale back enrollment was caused because of a strain on the university’s physical plant. Thanks to overcrowding and under-funding, he said, there are simply not enough classrooms and other resources available to provide students with a quality education that can promise them an on-time graduation (“CSU to turn away 10,000 students,” San Francisco Chronicle, 11/18/2008).

Although the State University’s predicament and actions are perhaps understandable given the economy and falling endowment, there is a better solution for California’s children: attend college online.  Embracing online education for many students addresses the challenges the system faces, both financially and in terms of physical space.

Online learning is an affordable option. Tuition at Capella University, an online, accredited university, for example, runs to $930 for a 3-credit Bachelor of Science course. That figure does not take into account any financial aid or scholarship grants. At UMassOnline, an online division of the University of Massachusetts, undergraduate courses range from $425 to $1,200 in cost regardless of a student’s residency. This often works out to be less costly than enrolling in and taking a full-time program at one of the University’s physical campuses.

North Carolina has come up with a different creative option. Its Learn and Earn Online program allows students to take college courses online when they are in high school and earn an associate degree or up to two years of college credits.

Online learning at the postsecondary level is booming as students find it to be a great option for their needs. The University of Phoenix is perhaps the best-known disruptor in the space. Its online enrollment has grown rapidly. According to the Babson Survey Research Group, the percentage of students at U.S. postsecondary institutions taking at least one online course doubled between 2002 and 2006. The rapid growth has continued as 3.9 million students took at least one online course during the fall 2007 term.

With California facing an increasingly gloomy fiscal future, it is time to figure out innovative ways to do more with less. The concerns of California’s children must be paramount as we consider different options. There are many opportunities that the introduction of online learning offers—not only for those being turned away from the system but also for those admitted currently to the CSU system. Online learning streamlines the delivery of learning, which can increase its quality and consistency. It is affordable. And it allows for customization for an individual’s needs.

Don’t slam the door in these would-be students’ faces. Open up a learning pathway for them that has no doors at all.

Let’s revisit the topic of disruption in higher education, but from a different angle. In the past, I’ve written about community colleges and online universities targeting non-consumption, but there is a policy dimension to this as well.

Henry Eyring has a great piece about it in Strategy & Innovation called “Let Disruption Fix Higher Education” (Innosight, LLC, the consulting firm that Clayton Christensen co-founded, publishes Strategy & Innovation; you’ll need to register to log in, but it’s free, takes only a moment, and is well worth it).

In the article, Eyring writes that the average cost of a 4-year degree has risen 76 percent in the past 10 years. Unsurprisingly, government feels the need to halt this. There have been reports—The Spellings Commission’s, for example—and Congressional action. One such act proposes creating “lists to embarrass colleges that increase their tuition significantly.”

As Eyring points out, although well intended, this is unlikely to have real impact. The real answer? Disruption—namely teaching universities disrupting research universities.

A key point from the article is that teaching universities are less expensive because they don’t have a cost component devoted to a research university’s real product and priority: its research (nope, not preparing its students for the workforce!). Although the classroom works similarly in both of these environments, because the two universities types have different value propositions, profit models or priorities, and processes (in other words, a different business model), the two are actually quite different. With different metrics to judge its different and lower-cost business model, the teaching university is disruptive relative to the research university.

The corollary might be that online universities and community colleges are really subsets of the teaching university category, which is a more descriptive term perhaps? Or one could argue that online universities have a new classroom labor model as well and therefore are a different category? I’ll have to think more about this–and would welcome comments, but read the article to learn more and see how this model is changing the higher-education landscape—as well as to read Eyring’s proposals for how government could act.

There are other disruptions emerging in higher education that change the classroom labor model, such as Smarthinking’s StraighterLine, which is worth a blog post some time soon.

Previously on this blog I’ve written about how adult distance learning is proving itself as a fast-growing disruptive innovation. As many have pointed out to me, there are many other disruptive innovations in higher education that are fulfilling critical needs in our society, including community colleges.

It’s a disruption Clay Christensen has written about before (see “Disruptive Innovation for Social Change” in the December 2006 Harvard Business Review). The Christian Science Monitor is the latest to pick up on this growing disruption. In the August 4, 2008 article “Community Colleges: A Great Return on Investment,” Haas Graduate Business School professor Kathleen Connell chronicles the phenomenon of more and more students choosing to attend affordable community colleges instead of the traditional 4-year schools that are far more expensive.

Nearly half, or 6.5 million, of all undergraduate students now attend the roughly 1,200 community colleges out there, according to the article. And they bear the classic hallmarks of a disruptive innovation.

They are far more affordable, convenient, and accessible. $2,361 for tuition compared to $6,185 at public four-year institutions and $16,640 for out-of-state students. Students can live at home and attend. And they don’t have the conventional admission standards.

They also fill different purposes and can be judged on different metrics from traditional four-year schools as they target nonconsumers. They are far more market-driven, as the article makes clear; they educate 60 percent of new nurses and credential 80 percent of firefighters, law enforcement officers, and EMTs. Forty-one percent also offer online degrees, which often serves mid-career professionals – business leaders love them for retraining workforces, Dr. George R. Boggs, president and CEO of the American Association of Community Colleges (AACC) said. They also offer much smaller classes.

Of course, like any disruptive innovation, they don’t offer the same performance as the traditional offering right now, but continue to improve in other areas. Here, as the article points out, you lose out on the vast array of student activities and sports and lack a student community.

I’ll continue to write about disruptions in higher education, as the freer market leads to many more in this space, but we’d love to hear from others about what disruptions they are seeing in this space and how they might play out.

An April article in eSchool News titled “Schools mull needs of adult distance learners” discusses the growing demand from adults to take online courses.

This is a classic area of non-consumption. Many adults would like to have some form of ongoing education for any number of reasons –- to gain new skills for a future job, for general enrichment and curiosity, and so on — but often there have not been good options to fulfill these jobs. Most colleges have historically been tailored for the 18- to 22-year-old demographic, for example, and it’s hard to attend a school full time if you need to work or have a family. Night school often is not a satisfactory option.

With its convenience of allowing a student to take it any time, any place, and at any pace, online education is stepping in to fill the need. According to Capella University Vice Chairman Michael Offerman, the average student at Capella is 40 years old –- which shows there is a big untapped market here. As further proof of its power, Bill Gates recently told NBC’s Tom Brokaw in a June interview that he takes online education courses –- and finds them very useful.

As Offerman writes in his blog, “Despite clear changes in the demographics of American higher education, public discussion and public policy consideration are still based on the tradition of the 18-year-old going directly from high school to full-time, on-campus study.”

We’re just at the beginning of seeing how the Internet can revolutionize learning. Disruptive approaches to learning such as targeting adults will help improve the medium and push the conversation forward.

In classic disruptive fashion, according to the article, at the moment adult online education works best for the more motivated students, just as K-12 online education does. But over time, we can imagine it improving. Providers are fashioning it to be student centric. If the technology is honed in this foothold market in this fashion, this could have a big payoff for K-12 education down the line if providers transfer the relevant portions of what they learn from serving adults.