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University Incumbents, Learning Innovation, and 'Goliath's Revenge’

Might traditional universities have more advantages in creating whatever comes next in higher ed than we realize?

May 6, 2019
 
 

Goliath's Revenge: How Established Companies Turn the Tables on Digital Disruptors by Todd Hewlin and Scott A. Snyder

Published in January of 2019.

Goliath’s Revenge is a book about how existing large companies can beat startups at the innovation game. I read Goliath’s Revenge hoping to learn how university incumbents might carve out space as leaders in learning innovation.

The conventional wisdom in higher education is that the older and more established the university, the more difficult time that school will have in driving innovation. The idea - and I have believed this argument myself - is that established incumbent institutions have more to lose than to gain by change. In particular, status-driven institutions risk dropping down the status hierarchy if innovations backfire.

Goliath’s Revenge can help us challenge the conventional wisdom of how we think about university innovation.  While not written with universities in mind, and while also lacking any university examples, I still found the book helpful in thinking about the potential advantages of working at an established institution if your mission in life is to drive learning innovation.

The book starts with a quiz.  See how you do:

What company is this? Early private investor in a major ride-sharing leader. Licensed to test more fully autonomous cars on California roads than any other company. Builder of a business model that can prosper in a future where many people own cars but do not drive and others don’t want to own a car at all. Recognized as the first company delivering a long-range, sporty electric car that the average person can afford. Willing to pay a massive premium to acquire Silicon Valley–based talent in order to win the long game of digital disruption in the automotive industry. Just received an investment of $2.25 billion from famed dealmaker Masayoshi Son at SoftBank.

What company did you guess? Tesla? Google? Apple? Uber?.

Wrong. Wrong. Wrong. And wrong.

The answer is General Motors.

Could it be that GM will eventually win the race to replace individually owned gas-powered cars with electric cars accessed by ride-sharing networks?  Might autonomous driving first emerge from GM and not from Tesla?

This is sort of like asking if incumbent universities will lead the charge to online, low-cost, competency-based, and lifetime education.

The point that Hewlin and Snyder are making is not that it is inevitable that long-term established companies will end up revolutionizing their industries.  They cite plenty of examples where dominant companies tried to protect their core businesses, such as late fees at Blockbuster and high-priced film at Kodak, only to be swept aside by Netflix and digital cameras.

Instead, Goliath’s Revenge argues that established companies (and maybe universities) bring some serious advantages to the fight.

One of GM’s advantages in the long-run transportation shift to electrification, sharing, self-driving is that they can internally fund their innovation efforts by continuing to make and sell high-margin legacy gas-powered SUVs.

Applying this advantage of self-funded innovation to higher ed, we may be able to come up with examples where existing traditional programs (such as residential master’s degrees) can generate enough margin to fund learning innovation efforts.

Other advantages that existing companies (the Goliath’s) have over upstarts (the David’s) include brand reach and data.  (Note: Hewlin and Snyder mention other incumbent advantages, I’m highlighting those that may be most relevant to higher ed).

The advantage of brand reach is perhaps the most obvious attribute that established universities possess.  The entire online program management (OPM) industry is based on leveraging the brands of relatively few institutions.  How universities might benefit from their data is a more interesting story.  Hewlin and Snyder argue that companies need to treat their data as currency.

It is not a new argument to data is the new oil.  What is fascinating is to read examples of how legacy companies have been able to turn decades of data into high-impact innovation initiatives.

In higher ed, we may want to think about a new role that integrates data scientists with learning innovators.

Goliath’s Revenge is full of ideas that may help those working at traditional institutions leverage the strengths of these places, rather than struggling to overcome negative attributes such as risk adversity.  The book recommends against setting up separate innovation units.  Instead, a better method is to integrate new initiatives into existing operations, what the authors call Little I (or incremental innovation) projects.  From those efforts, Big I (or step-change innovation) initiatives can emerge - as internal teams gain credibility and confidence.

Some other arguments in Goliath’s Revenge resonated with how I think old universities may lead higher ed change.  Two of the recommendations of the book include the idea that talent should be prioritized over technology, and that organizations should focus on developing internal talent rather than recruiting from outside.

The reasons to focus on internal talent for innovation efforts are that these initiatives are less likely to be rejected by the organizational antibodies if the people leading the work have a history of established relationships within the company.  In higher ed, we tend to under-value the importance of collegial relationships and tacit knowledge in efforts to push beyond the status quo.

Is Goliath’s Revenge the perfect book for learning innovators working at traditional universities to read? The answer is no, and of course, higher education is not the book’s subject.

A university reader must be willing to look past the standard business book practices of providing templates, checklists, and matrices.  Little of the exercises in the book will be useful to academia.  Books aimed at business readers and those who work in for-profit companies have their own language and norms.  Academic readers will need to translate to academia.

The take-home message of Goliath’s Revenge is that every industry is now undergoing, or will undergo, radical change.  These changes (they call them disruptions, but that word is too loaded for our conversation), are being brought on by the combination of artificial intelligence, big data, ubiquitous bandwidth, globalization, and other forces.

To thrive, companies will need to adapt to the new digital realities by evolving every aspect of their businesses.  Established companies, in Hewlin and Snyder’s eyes, have more assets in leading industry-level transformations than is usually recognized.

Will higher ed be an industry that will transform as completely as retail, energy, entertainment, and journalism?

Will existing universities be the authors or the victims of digital transformation?

It is useful - sometimes - to think about these questions about the future of higher ed through a non-higher ed lens.

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