As many independent schools struggle and face potential threats from the emergence of disruptive micro-schools, what they should do to survive and thrive is an increasingly important question.
Last week I wrote about two possible responses independent schools could take: creating an autonomous unit to launch a disruptive innovation themselves and using online learning as a sustaining innovation.
There is also a third option open to independent school leaders to ward off disruption, which is admittedly more speculative. It appears, however, that if an entity can organize solely around a critical “Job to be Done”—that is, the reason people “hire” products or services in a given circumstance—then it might be able to obviate disruption entirely.
There are two reasons for this. First, organizing around a Job reduces an organization’s overhead costs significantly. As an organization delivers on a Job, processes emerge, and if the organization focuses on just one Job, then the processes become very efficient. If you try to do lots of Jobs for lots of people, however, then organizational processes become complicated, much like what has happened in hospitals. If an independent school, for example, tries to do four Jobs instead of one, our research shows that its overhead per student will be roughly 70 percent higher than if it focuses on one job. Overhead is the biggest driver of costs, and overhead is driven by complexity. Second, if an organization focuses on an important Job in the lives of customers and does it well, it can charge premium prices that customers are willing to pay.
A story about the retail giant IKEA illustrates the opportunity. Some 50 years ago, Ikea sold low-cost furniture. Today it still sells low-cost furniture, and it has not been disrupted in any way. It has neither gone “upmarket,” as most businesses and independent schools seeking to be “better” do naturally, nor has someone come underneath IKEA to push it upmarket.
So what gives? It’s not that there hasn’t been disruption in retail. There has been plenty, from discount retail to online retail.
It instead appears that IKEA has avoided the up-market allure by remaining focused singularly on nailing one Job to be Done. That Job isn’t to sell low-cost furniture. If that is all that it was doing, surely low-cost entrants from China could disrupt it from below.
The Job that IKEA has focused on, rather, is the idea that “We need to furnish this apartment today!”
IKEA engages its own designers to create furniture kits that customers can retrieve from the warehouse, take home, and assemble themselves, without having to wait for delivery. IKEA designs furniture that is explicitly meant to be temporary, not to become heirlooms. IKEA offers childcare because unfettered concentration on furniture purchases is an important experience; and it positions an affordable cafeteria in the store so customers can refuel. Although IKEA has been slowly rolling out across America for some 30 years; even though its “formula” is open for all to inspect; and despite the fact that its owner is one of the wealthiest people in the world, nobody has copied it. Nobody. The reason? We believe that because other furniture retailers think about their market through the lenses of product category and price point, they don’t even see the need to integrate differently; and they therefore are rarely hired to do IKEA’s job.
As a result, IKEA just sits there, neither disrupted nor disrupting. Were it to someday decide that it wanted to diversify and optimize itself for other Jobs, it would need to set up separate business units in order to achieve the integrated structure required to provide the experiences appropriate to those Jobs.
The evidence appears to be that if an organization aligns itself around a specific Job to be Done, then it obviates the need to disrupt others, and it causes others not to be able to disrupt you.
There appears to be a lesson here for independent schools challenged by would-be disruptors: Take whatever technology and tools are available and use them to organize tightly around a Job to be Done to forestall—or completely put on hold—disruption. With the mindset of focusing on a specific Job, it doesn’t matter what new technologies emerge in the future. If a technology can help an independent school do the Job that it has chosen, then it should be able to make changes accordingly and seamlessly. If the technology or tool is not useful to doing the Job, then it can ignore it.
The challenge today is that many independent schools are seeking—often unknowingly—to do several different Jobs. Indeed, in their march upmarket to build prestige in their communities, many of the schools are adding more and different things—facilities, courses, teams, supports, and so forth—to be all things to all people. This has left them quite vulnerable.
Yet it’s not all that hard to imagine a school identifying a Job—helping students be entrepreneurs; helping students attend and excel in liberal arts colleges; helping students to excel in collegiate and professional athletics—and integrating and discarding unneeded services and facilities accordingly. Does the school need big, expensive, state-of-the-art athletic facilities? Depends on the Job. Is a fancy new science center critical? Depends on the Job.
The question, then, is how would schools that have historically been doing multiple Jobs make the shift to focus on just nailing one Job?
The options here seem to be twofold. Both are challenging, but possible.
One option would be the same as IKEA’s were the furniture giant to decide to focus on a different Job: Create an autonomous division that focused solely on the new Job at hand so that it could create the properly integrated structure required to provide the experiences appropriate to that Job.
The second option is for a strong leader to establish a clear Job for an institution to do and then literally discard—or sell off—everything that doesn’t help the school do that Job. One key is to recognize all the losses in the first year so that the institution can rebuild from a very low base, such that no matter what happens, year two will look better. Given the significant power of parents, faculty, alumni, and others, this would not be easy. But the experience of Arizona State University’s president Michael Crow shutting down the university’s teachers college and reconstituting it from scratch a few years later shows that it is possible in education more broadly.
If an independent school can truly identify and organize around a single important Job that parents and their children identify, then the likely result will be that any disruptive competition that emerges will be much easier to handle than imagined.
