The eLearning Vendor's Dilemma

The Dilemma

The business section of today's New York Times has a pithy summary of Clayton Christensen's The Innovator's Dilemma.
    ...outstanding businesses become vulnerable not because they are lax but because they are too diligent. They are too busy serving their bread-and-butter customers with a continuous array of better products. That commendable bias leaves the back door open for scruffy newcomers to introduce second- or third-rate products that satisfy marginal customers more interested in low prices than cutting-edge performance. Once in the door, the newcomers milk their cost advantage to make better products and move up the market step by step.

    Examples were everywhere, most notably Sony, Honda and Toyota; the minimills in the steel industry; the succession of minicomputers, personal computers and notebook computers; even the community college movement. They all delivered what Professor Christensen labeled "disruptive innovations," as opposed to "sustaining innovations," improvements to make top-of-the-line products even better.

Let's think about this in the context of the eLearning marketplace. Who are the senior players, those who've had the opportunity to get to version 3.0 and beyond? Off the top, I think of:

  • LMS vendors. Saba, Docent, Click2Learn, TEDS, Plateau, RWD, etc.
  • IT content. NETg, SkillSoft, Element K, Global Knowledge, KnowledgeNet, etc.
  • Virtual meetings. Centra, Interwise, WebEx, Live Meeting [Microsoft Placeware], etc.
  • Authoring tools. Macromedia, Click2Learn, PowerPoint + (Breeze, Impatica, etc.), Allen, Qarbon, etc.

[Apologies to important players I've skipped for now.]

These companies are all working hard to deliver what their customers are asking for. In Christensen's view, this renders them vulnerable. This is inevitable.

    ...established companies can't do otherwise. Companies will - and should - cater to their best customers. All producers, large or small, try to move up the market. Salespeople invariably push the wares that yield the big commissions. Market research inevitably weeds out product ideas that aren't amenable to quantitative testing.

The Solution

The only way to escape this vicious cycle is through "generating a consistent flow of disruptive innovations." That's the topic on Christensen's new book, The Innovator's Solution.

Remember, the dilemma comes about because a replacement technology slips in under the radar because the established players don't respect it as worthy.

    What might undercut an LMS? -- Zope? MySQL? Moodle?
    What might gut IT content? -- Open source? O'Reilly? A trial-and-error environment?
    Virtual meetings? -- VoIP? Microsoft? Internet II?
    Authoring tools? -- Office 2004? SAP? Oracle? IBM?

You get the idea.

Any established vendor that doesn't nurture innovations that depart from the norm will be in decline within a few years. Set up a portfolio of skunk-works projects. Now. This takes more than thinking out of the box; it requires funding and setting up totally independent boxes to think in.

If Christensen's message in the eLearning context is unclear, wire three thousand dollars to Internet Time Group LLC. We'll join you for a day on the island of your choice to help you figure it out.


Posted by Jay Cross at October 19, 2003 12:35 PM | TrackBack
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