Rethinking The Education Business Model

article3_222585673By Jamie Dorrington.

Many readers will be familiar with the work of Clayton Christensen and his collaborators regarding disruptive innovations. As a principal responsible for setting the strategic direction of my school, I appreciate their focus on the impact of digital technology on education. Their work has certainly caused me to think about the forces of disruption and how best to respond to them.

Christensen’s theory states that disruption occurs when an innovation that has taken root in a market on non-consumers spreads to the mainstream market. The particular innovation appeals to non-consumers because it is cheaper, simpler, and more accessible. Over time, the innovation increases in sophistication until it makes inroads into the market of the incumbents. Why don’t the incumbents respond? It is not always because they are not aware of the innovation – after all, Kodak actually pioneered digital photography, yet its failure to respond appropriately meant that a company that was once synonymous with photography is no longer a player. There are many factors that contribute to this failure to respond – but the main one is the prior success of the incumbent. Key stakeholders are unwilling to abandon a business model that has been paying dividends.

Let’s imagine we are designing a new business model for an educational enterprise. Our objective is to serve the needs of each individual student in a technology rich environment. We have an array of digital, human and other resources at our disposal. Which of these would we see as pivotal to our ongoing success in the years ahead? Which of these will carry the heaviest load in the future? Which of these is most likely to consistently deliver an individualized service to 21st Century students? Which of these will deliver the service at the lowest cost per student? I agree that the answer is likely to be “a combination of the best available resources”, but which of the resources is going to form the lynchpin of our strategy? We need to know the answer to this question because it will determine the optimal combination of resources in our new model.

If we decide that ‘the teacher’ is the lynchpin of our business model, then we need to ensure that other resources are employed in a manner that enables the teacher to perform his or her task effectively. We would give teachers desks, computers, and rooms designed to focus attention on them, as well as administrative support and consumables to aid them in their work. We would design the supply chain to converge at the point of the teacher, to meet the needs of the teacher on-site. We would even arrange for students to meet teachers at a time and place dictated by the teacher’s hours of work and other teacher-centric policies and regulations. Does all this sound familiar? But what if we decide that digital technologies are the lynchpin of the model. How would that change the manner in which we organise our resources?

Revolutions occur when the lynchpin of organisational structures change. The French, American and Bolshevik revolutions removed monarchies from their central place in their respective societies, and replaced them with other forms of government which in turn led to a new set of associated allegiances. The industrial revolution removed craftspeople from the centre of the production process and replaced them with machinery. The car displaced the horse, the steamship displaced the sail, the mobile phone displaced the landline, and Web 2.0 technology displaced much of the work of the post office. These processes were revolutionary not simply because of the birth of innovations (manifest as an idea or a machine), but because these innovations triggered a reorganisation of systems and resources, a new model of governance, of physical production, or of service delivery. New systems of government were formed and new types of workplaces developed to pivot around a new focal point, whether it be a parliament or machinery on the factory floor. Of course the changes were given momentum by the emergence of a significant number of end users who became increasingly dissatisfied with the old as they became aware of a better alternative, but these alternatives became available because some decision makers took the opportunity to do things differently.

Revolutions call for a reapplication of the principle of specialisation and the division of labour. In fact, revolutions could not take root were it not for the application of this economic principle. I strongly suspect that the same applied in the agrarian revolution and the original information revolution that followed the invention of the printing press. The specialisation and division process extended far beyond factories, farm equipment, and personnel to the supply chain that fed these processes. The innovation took root because systems developed to focus productive forces on new pivot points, on the new machinery, people and places that gathered, combined and produced something of value to consumers. The education system as we know it was developed as part of this process.

We all know that not everyone was happy with ‘high tech’ factory equipment in the industrial revolution. It is possible that monks who had for centuries transcribed documents by hand may not have been shouting the praises of the printing press. After all, these innovations threated their livelihood and their sense of identity. Why didn’t the Luddites and the monks win the day? Because they were no longer pivotal to the production process. The principle of specialisation and division of labour still applied, but the focus had changed. It moved from the monk’s desk to the press room, from the craftsman’s cottage to the factory floor. It circumvented the obstacles and went, if you like, to the heart of the process. There was simply nothing they could do to isolate themselves from the disruptive innovation because their influence was inversely related to the growth of the new models.

Let’s return to our analysis of the impact of digital technology on education and ask ourselves a simple question: What is the focus of the new supply chain? At which point do the resources need to gather together in order for something of educational value to be created? It is not ‘at the teacher’s desk’, or ‘in the classroom’, or even ‘in the school’. It is ‘wherever and whenever the learner wishes to have access.’ I realise we have all heard this a thousand times, but have we really thought about the implications of a supply chain that does not pivot around teachers? I am not suggesting that teachers are nowhere to be seen in the new business model, but they are no longer pivotal. 21st Century education does not have to be funnelled through the teacher in the classroom.

Those teachers who reassure themselves that they are still pivotal because they are required to interpret the expanding wealth of digital material are deluding themselves. There is far too much material available to allow it to bottle neck on the desk (top) or in the mind of the teacher. In any event, the material is being curated digitally. It is being translated, reshaped and remarketed to meet the needs of the student as the consumer, not the teacher. Learning can take place without teachers meeting students face-to-face. Once we realise this, we can start to develop a new model that optimises learning for each individual student.

Educational leaders may think it logical to ask ‘What can teachers do that the digital technology cannot?’ The answer most often revolves around relationships. There is no doubt that teachers can care for, motivate, mentor and guide students, but so can others. Other adults and even peers can be just as effective as someone with teaching qualifications, partly because teachers have not been specifically trained to perform these tasks. Some teachers are very good at them and some are not, depending on their own interests, experience and personalities. The point I am making is that the market will not value teachers because they can perform functions that others (and in some cases educational software) can also perform, especially if these ‘others’ are less expensive to employ. The real questions that educational leaders need to ask are ‘How can our educational community enhance student learning in a digital age? What can schools, operating as communities, do to add value to learning?’

The issue can be illustrated by considering a particular attribute of what we now refer to as a 21st Century learner, that of self-regulation. In the interest of developing the argument, let’s ignore the fact that self-regulated learners, by definition, need less external regulation and consider how these skills and attributes are developed. Once again, teachers are not trained to promote self-regulation. Teachers whose practice is controlling and those who still position themselves as sages (gatekeepers of knowledge), actually inhibit the development of self-regulation in their students. This is one of a number of dimensions of 21st Century learning that could be better served by people other than teachers.

My argument is that digital technology empowers students, not teachers, because educational services can be delivered to the students (the consumer) directly. Teachers will need to accept that they are no longer the pivotal part of the supply chain, and their future worth will depend on how well they complement the other components in a process in which digital technology is pivotal. Educational leaders will need to work with teachers to bring them to this realization, while simultaneously developing a new organisational architecture that incorporates facilities, digital and human resources that combine for the benefit of individual students. I believe that each school’s ability to develop an effective new value adding architecture will determine their ability to survive the disruption associated with digital technology. As stated above, educational leaders should try to work with teachers through the change process. If that fails, they may need to work around them.

Either way, the form of specialisation and division of labour that served industrial age schools, where the supply chain pivoted around the teacher, will not serve the needs of learners in the 21st Century. I believe the term ‘teacher’ will be replaced by ‘coach’ because that will better represent the role of the educator in refining the knowledge and skills of students, and applying them to tasks that have meaning/purpose/value. Other coaches will also be employed as part of a team of educators that pivot around the best digital offerings, and these will be explained in a subsequent article.


Jamie Dorrington is the Headmaster at Saint Stephen’s College in Queensland.


Christensen, C.M and Overdorf. M. (2000). Meeting the Challenge of Disruptive Change. Harvard Business Review. March-April, 1-10.

Christensen, C., Craig, T., & Hart, S. (2001). The Great Disruption. Foreign Affairs. 80(2), 80-95.

Christensen, C.M. (2002). The Opportunity and Threat of Disruptive Technologies. MRS Bulletin, April, 2002. Retrieved from

Christensen, C.M., Johnson, C.W. & Horn, M.B. (2008). Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns. McGraw Hill, New York.

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