“It is not the strongest of the species that survives, nor the most intelligent that survives.  It is the one that is the most adaptable to change.”  — Charles Darwin


I have had two instances this year in which to observe the relevance of Charles Darwin’s statement.  One was a trip to the Galapagos Islands where I saw that finches’ beaks do vary significantly with changes in microclimate (this was one of the foundations of Darwin’s theory of evolution.) 

The other instance was a field trip that I took last week with 15 colleagues from Darden.  It was a tour of technology companies on the West Coast, a “Tech Trek.”  No boondoggle was this.  The schedule crammed in 17 companies and three alumni receptions in the space of 3.5 days.  We raced, literally, from one meeting to the next.  It makes sense for a professional school to stay close to the profession it serves, to visit managers on their home ground.  You cannot build a decent understanding from an armchair in the faculty building or from the opinions of pundits and journalists.  You must get into the field.  This is especially true in the tech industry: the field is changing so rapidly that in the year it takes someone to write a book or complete a lecture tour, his or her insights have grown stale.  Several of the tech firms we visited are not just experiencing high growth; they are in hyper-growth. 

Our purpose was to take soundings about recent developments in technology as they apply to higher education and to frame the implications for management education and Darden.  Without mentioning companies or individuals, let me offer some conclusions I’ve drawn:

1.    The impact of the current and prospective technology on higher education will be very very big and emerge rather soon.  People have been saying the same thing about new technology for decades (think of Betamax or cable TV in the 1970s).  Sir John Templeton said that the four most dangerous words in investing are, “This time it’s different.”  Well, based on the hardware and software that were demonstrated for us, I would say that this time it is different.  We saw systems of presentation, feedback, assessment, and grading that substantially remove the live instructor from engagement with students and therefore enable distance learning and mass access on a scale not contemplated before.   New entities are stepping in where universities fear to tread.
2.    Everyone talked about the coming impact of “cloud computing.”  The cloud will accelerate the dissemination of software enhancements: software upgrades will be ongoing rather than every few years in the form of a major re-installation.  As one person expressed it, the cloud is like Esperanto, potentially ubiquitous but likely meaning different things to different people.
3.    The cloud enables “software as a service” and promotes the unbundling of applications—you’ll pay for the apps you use, as you use them, rather than having to buy a big portfolio of stuff much of which you won’t use.  This unbundling is a very very big deal for higher education.  Imagine “pay per view” for lectures, textbook chapters, tutorials, etc.  The Khan Academy is already doing it for primary and secondary school students.  iTunes did it for music.  Netflix and Hulu did it for home entertainment.  Higher education faces major unbundling—indeed, “atomization” might be a better word.  It used to be that a degree program was the unit of consumption: you could only take courses if you signed up for a degree program.  Now, we are seeing the delivery of courses on demand—but why stop there?  One could opt for individual classes or tutorials on specific topics.
4.    Unbundling seems likely to “flip the classroom.”  In a traditional format, students come to class, hear a lecture, go home and puzzle their way through homework problems.  In the flipped world, students view lectures and tutorials at home, and then come to class where they work individually and in teams in practice of solving problems—this enables the teacher to focus on student struggles more effectively.  In this way, the real teaching is “just-in-time,” material is engaged at a higher level, and problem-solving is interactive.  The book, Disrupting Class, by Clayton Christensen, Michael Horn, and Curtis Johnson is “must” reading on the impact of technology in education and on flipping the classroom specifically.
5.    If higher education becomes unbundled, then what, exactly, does a school certify?  Sitting through a lecture?  Clicking through a tutorial?  Certification of vocational skills (such as balancing the books)?   Deep mastery of the subtleties of a field?  Then too, there is the problem of the integrity of the certification system.  In some settings, cheating is widespread.  We have seen no digital system yet that assures the integrity of a student’s work.   The questions of certification and integrity are major issues to be resolved.
6.    It seems that where all this is heading is toward competency-based education and away from a focus on degrees.  In our recent curriculum design work at Darden, we have focused on building three groups of competencies: knowledge (“know what”), skills (“know how”), and attributes of character (“know why.”)   The didactic content in graduate management education will move away from universities and onto the web.  This stuff is “know what,” the content of lectures and textbooks.  As this knowledge grows ubiquitously available, it will cease to distinguish institutions in preparing people for professional life.  But skills (“know how”) and attributes of character (“know why”) will grow in significance in distinguishing institutions.  Our high-engagement pedagogy and our curriculum design work at Darden position us well to deliver “know how” and “know why.”  I expect that we will see a growing number of imitators.
7.    Quality, mobility, ubiquity.  Smartphone sales will outpace sales of personal computers (if they haven’t already.)  Growth in bandwidth is improving the quality of delivery; video plays a fundamental role in the way we build relationships.  Something like 90% of communication is non-verbal.  You can get what you want where you want it.  Based on our observations of university students today, we will see an inexorable demand for the digitization of higher education and for the delivery of educational experiences across a variety of devices. 
8.    Social networking continues to grow at a very rapid pace.  Email is old technology; as our students know, in a world of growing spam, social networks can help you get what you need or want to know.  Firms are now employing social networks to promote collaboration on new product development, sales force management, and operations of many kinds.  The transference to academic settings would seem to be straightforward, to create “learning communities” that engage experts, broaden access, induce collaboration, enrich learning experiences, and collect data. 
9.    Tech companies are monitoring and engaging their customer base in extraordinarily detailed ways.   We heard several examples of “A/B testing” in which the companies modify their software in real time to test functionality and see which promotes higher engagement.  Tech companies would love to see B-schools prepare MBAs more deeply in data analytics and data visualization, to present insights in a way that is exciting.  One manager said, “It is amazing how important the skill of storytelling has become.”  Given the rapid pace of change, tech firms are less inclined to strategic planning.  Another manager said, “It our business, traditional strategic planning has zero value.  The cost of failure on the web [with A/B testing] is close to zero.  Strategic planning is a risk minimization device” that is being supplanted by A/B testing.   Strategy becomes all about learning and experimentation; and experiments in tech cost relatively little to create.   
10.    What the tech industry wants from MBA schools are leaders, people who can create change and constantly reinvent the business.  The business environment is morphing rapidly; MBAs there must be able to thrive in an environment with ambiguity and no set structure.  They must think analytically and be able to collaborate with engineers.   In the tech industry, the engineers are “the talent,” not the MBAs.  MBAs must let go of the aspiration of “being in charge.”  Organizations are inverting.  More of the control is coming from bottom up.  Tech companies especially want people who have built things, tried things, and experimented.  “What I learned in school” doesn’t cut much ice.   Tech companies want people who are willing to think about their careers as an adventure rather than a ladder. 

The kinds of changes described above will be very expensive for higher education.  Schools will need to acquire new technology, new talent, new skills, and a lot of money to fund it all.  If anything is going to drive the Economist’s vision of “Trouble in the Middle,” it is new information technology.   It is not immediately clear which institutions will survive. 

Rankings and other metrics may tell us who the strongest or most intelligent institutions are—but as Charles Darwin said, it is the most adaptable who will survive.  And there’s the rub: adaptability is neither evenly distributed nor naturally given to academic institutions.