Education 2.0: How The Education Business Model Would Change

I am preparing to write the Open College idea down over the Christmas holidays and hence, doing some reading and review of ideas. There could not have been a better place to start the journey than Clayton Christensen's DISRUPTING CLASS [with Michael Horn and Curtis Johnson], where the effect of disruptive innovation on how education is delivered has been examined.

The book is full of concepts about disruptive innovation and how they are brought to market, and a connecting fable which lets us understand the possibilities and challenges of technology introduction to the market. There are some rather disconnected, but useful stand-alone sections, on Pre-school education and Educational Research for example, but overall the book is a good read and stimulating for anyone interested in the business of education.

The point of this post, of course, is not the book, but an idea contained therein, which requires closer examination in the context of the open college project. This is the idea about three types of generic business models and how the business model for education, particularly schools, may change with the disruptive introduction of technology in the classroom.

The three types of business models following the framework developed by Professors Oystein Fjeldstad and Charles Stabell are the following: Solution Shops, Value Chains and Facilitated User Networks.

The Solution Shops are professional teams put together to solve problems, like high end consulting, legal and advertising firms, which employ highly trained people to identify problems and recommend solution. The value, in this business model, reside largely IN the people who work for these organizations. The organization operates with little or no standardized processes, as each client problem can be unique and may need a special solution. Corporate Training firms mostly function as solution shops, though the tendencies are to gravitate towards another business model [we will come to that in a moment].

The Value Chain business, such as manufacturing, retailing and food service businesses, is about taking an input and add value through the processes that they have, and finally engaging with the end consumer with the value-added product. This is the most common business model in existence, and one can see this in the way schools and colleges are run. The value in this type of business model resides in the processes. People here are not as important to these businesses as in Solution Shops and strong, standardized processes are the hallmark of a successful Value Chain business. It is not difficult to see schools and colleges in this mould: students come at the beginning of the year, value is added to them through standardized teaching and assessment, and finally they go out to a higher class with the added-value capabilities at their disposal.

The Facilitated User Network is where customers exchange with each other, through direct or indirect processes. Telecom businesses are great example of this type of business model: customers talk and share information with each other using the network. So is Insurance, where premiums are paid to and drawn from a pool. Banking too is a sort of network, where saving is converted to investment. Participation in the network may not by itself a profit-making activity, but facilitating the network is. The value, in this kind of business model, reside in the network rather than the product or the participants.

Now, education as a value chain business is working fine, but this is inherently limited in its capacity to educate people. Three reasons:

(A) The business model tends to be biased towards high value, high volume courses and do not sufficiently attend to the individual preferences and requirements. This become crucial in higher education, because the society can gain much more by training individuals with the right skills and making them do what they are really interested in.

(B) Research shows that individuals may have learning preferences, the way they learn best. In a value chain business, one can allow little variation - expressed in Henry Ford's maxim 'you can have a car in any colour as long as it is black' - and though we have made significant progress in logistics management and production technology, it has proved significantly more difficult to accommodate a number of learning styles in education. The popular solution, so far, was to combine different methods together, hoping that one of the parallel learning methods will work. But, this means more work for the learners, fatter textbooks and a more daunting classroom for all.

(C) Various educational thinkers objected to the Prescriptive nature of traditional school or college education. The key problem was that standard value chain education is process driven and the focus, during the delivery of education, remains on the integrity of the processes rather than inventiveness of individual pupils. By design, inventiveness is disruptive in the context of a value chain and is strongly discouraged.

These three reasons make the standard education processes quite out of sync with the emerging demands of the students. The students who will enter college now would have all used a mobile phone, a digital camera and a computer for a number of years already. A large number of them, across the world, will have a facebook [or on some other similar network] profile, friends who are geographically distant and experiences of digital music and movies. In short, many of them are exposed to the Internet-facilitated world of long tail, of ideas, identities and aspirations. The one-size-fits-all college will increasingly be an anomaly to them, and value-chain education will become counter-productive. They will want to have learning, specific and specially useful, to fit their own curiosities. A standard education system with its tutoring and processes will make more and more students disconnect with education, and increasingly, from life.

I keep hearing complaints from tutors about bad behaviour by the students. The milder offences are about using mobile phones, texting most commonly but increasingly email, while the class is on. With computer-aided classes, there is always the case of facebook and chat while the tutor was explaining how to do a standard car maintenance check. The more troubling ones are about showing disrespect, physically threatening or even abusing the teachers and general misconduct with peers and tutors. The system of education is plagued by such problems, but forcing a student out of class or using the standard disciplinary methods are solving very few problems. While I do not see a magic solution to the bad behaviour, I do think a renewed effort must be made to connect the students back in education, which can only be done by connecting education back to the realities of life.

This is where we see the possibility of education morphing into, admittedly over a period of time, into the Facilitated User Network model from its current value chain form. This is increasingly because the standard processes and assessments are becoming out of sync with a more individualized world.

One can almost say that we are at a point of liberation from the tyranny of statistics, and a return to personal, experience-based education, which was the preserve of the few in years past, seems imminent. However, because democratic societies will not tolerate education as a special privilege [but that's what it is increasingly becoming, and bad education is indeed worse than no education], one must find a way to connect education to life for everyone, and this could be done today with the help of technology.

I think the big leap in education in the Western societies came through its excellent network of public libraries, a sort of facilitated user network of sorts [where the potential of library is fully leveraged and various interest groups organized]. These provide an excellent model of public education. This is no utopia as the benefits of such a network are already in evidence in many societies, though admittedly, one needs a different, technology-mediated framework which nudges people to the right direction and keep the network going. This is possibly the only solution to create an individualized, close to life experiences education system, which can reach a great number of people, and can offer access with fairness.

Of course, this is almost saying that the universities will become extinct and libraries will take their place. I would argue that such a shift is already happening. There is a shift in the priorities of knowledge acquisition, which is increasingly about the ability to put knowledge in context rather than finding and memorizing information, and hence, libraries, of various kinds, are becoming at least as important as the classroom. However, libraries do lack engagement protocols [to borrow a term from telecom] and this needs to be created in order to achieve the educational output that the society will require. So, we are almost talking about a vast repository of material, electronic or otherwise, which is accessed by people who connect with each other, and are guided by each other to distinct pieces of materials, case examples and previous work by peers. They are nudged by few mentors in the right direction when they need it, and increasingly educated by their peers and others who are able to give them suggestions on what and how to study. This format of education will not only connect to life, it will happen within life itself.