The Innovator’s Dilemma Hits Higher Ed

Alana Dunagan:

Last month’s announcement that Indiana’s Purdue University would acquire the for-profit Kaplan University shocked the world of higher education. The Purdue faculty are up in arms. The merger faces a series of regulatory obstacles. And it’s unclear whether the “New U,” as the entity is temporarily named, can be operationally viable or financially successful.

But Purdue’s president, Mitch Daniels, is willing to give it a shot.

The venture is unexpected, unconventional and smart. The nature of the partnership—in which Kaplan will transfer its assets to Purdue, a public university—is unprecedented. It’s also a rare instance of attempted self-disruption.

There are lessons here from the business world. In the seminal 1997 book, “The Innovator’s Dilemma,” Harvard professor Clayton Christensen describes how leading companies can do everything “right” and still be thwarted by disruptive competitors. In an effort to appease stakeholders, leaders focus resources on activities that target current customers, promise higher profits, build prestige, and help them play in substantial markets. As Mr. Christensen observes, they play the game the way it’s supposed to be played. Meanwhile, a disruptive innovation is changing all the rules.