The role of leadership in disruptive innovation in higher education. Jandris, T. P., and Bartlett, K. R.

1 The role of leadership in disruptive innovation in higher education Jandris, T. P., and Bartlett, K. R. Stream 8 - Innovative approaches to support learning and teaching in HRD. The 13 th International HRD Conference 2012 Universidade Lusíada de Famalicão, Portugal Thomas P. Jandris, Ph.D. Vice President for Educational Innovation Dean of the College of Graduate and Innovative Programs Concordia University Chicago 7400 Augusta Street River Forest, IL 60305-1499, U.S.A. Thomas.Jandris@CUChicago.edu And Kenneth R. Bartlett, Ph.D. Associate Dean of Graduate, Professional, and International Programs Associate Professor of Human Resource Development College of Education and Human Development University of Minnesota 104 Burton Hall 178 Pillsbury Drive S. E. Minneapolis, MN 55455, USA bartlett@umn.edu

2 THE ROLE OF LEADERSHIP IN DISRUPTIVE INNOVATION IN HIGHER EDUCATION Leadership plays a critical role in moving organizations to engage in essential disruptive innovation (Christainsen, Horn, Caldera, & Soares, 2011). Such leadership is important both because of the demand for and importance of higher education but also because institutions of higher education are struggling to manage several imperatives that are new to them. Globally, there is an increased demand for and importance of higher education to lead efforts toward economic development and job creation (Wildavsky, Kelly, & Carey, 2011). The study of innovation in higher education in Europe and especially in the United Kingdom is often considered an element of a broader new managerialist philosophy (Trowler, 2010), while in North America, and especially the United States, it is often a topic within higher education administration and in the futures literature (Harkins, Tomsyck, & Kubik, 2002). Meek, Teichler, and Kearney, (2009) recently detailed that despite widespread variation in higher education systems around the world, the need for innovation was a truly global phenomena. However, research exploring the role of leadership in higher education innovation is limited providing few studies on the roles, processes, and outcomes. The topic of leadership in innovation in higher education has significant relevance for human resource development (HRD). However, in general, the study of innovation has been largely overlooked in the HRD research literature. A noticeable exception is the study of Kontoghiorghes, Awbrey, and Feurig (2005) examining the relationship between organizational characteristics, innovation, and organizational performance. Some have urged HRD scholars and practitioners to focus more attention on innovation and to recognize the significant role that HRD plays in the innovation process (McLean, 2005). Within higher education, HRD is wellpositioned to make significant contributions to the study and practice of academic leadership in a variety of ways (McDonlad, Bartlett, Roberts, & Watkins, 2012). First, HRD faculty are uniquely suited to take on administrative roles given expertise in organization systems and

3 development, program planning and evaluation, and talent and performance management. Second, HRD initiatives and expertise are often used to train and develop academic leaders. And finally, HRD scholars can make unique contributions to the empirical research on academic administration (Watkins, 2005). Problem and Research Question Despite increased recognition for innovation in higher education and a growing acceptance of the opportunity for HRD to provide a leadership role in the development of theory and application of practice for disruptive innovation there is little written research on this important issue. Acknowledging both this need and opportunity for significant contributions from HRD we conducted a case study research project to examine the role of leadership in disruptive innovation in higher education. The overarching research question guiding this study was: What is the role of leadership in disruptive innovation in higher education? This paper provides a broad overview of existing research examining international perspectives on higher education innovation in both European and North American settings to frame a case study of the pivotal role of leadership in the innovation journey at Concordia University Chicago. Review of Literature The increased demand for innovation in higher education, combined with a highly constrained resource environment, has created a climate in which leadership for disruptive innovation is essential (Wildavsky et al., 2011). There are several imperatives that complicate the demands on leadership and create a heightened sense of urgency, including: Decreasing governmental commitment - for example, in the US, public universities have watched their state appropriations shrink dramatically, and private colleges and universities have seen state commitments to student aid drop. Similar circumstances are occurring all over Europe.

4 Globalization - to continue to attract the highest caliber students and faculty, universities everywhere must extend their recruiting efforts far beyond their borders. Globally, university campuses are increasingly diverse, plural, and multicultural to an extent unimagined just two or three decades ago. The governance and service challenges this plurality will bring will be substantial. New cost considerations - better and new understandings of cost containment and management will be required. It has been stated that the cost spiral in higher education isn't sustainable (Ladd, 2011). Consumer affordability - in spite of the global need for increased access, a college education is increasingly unaffordable. For example, in the US, the annual cost of a private college has grown from under 80% of per capita income to 112% since 1980, and the cost of a public college has risen from less than 40% to nearly 50% during the same period (Rickets, 2005). Increased application and reach of digital technology continued transformation of student learning and organizational management results from new technologies and expanded application. Selected examples include the fact that distance learning is becoming typical rather than supplemental; cloud-based computing is becoming the norm replacing massive institutional infrastructure investment; and course content increasingly resides in the public domain. The examples highlight that information is ubiquitous and barriers to access knowledge are being significantly reduced, especially with the expanded use of mobile devices (Ladd, 2011). The literature on innovation management frequently uses the phrase disruptive innovation. This term was coined by Clayton Christensen and his seminal and path-breaking works The innovators dilemma (Christensen, 2003), The innovators solution (Christensen &

5 Raynor, 2003), and Seeing what s next (Christensen, Anthony, & Roth, 2004). In spite of the frequency of use for the term a great deal of confusion over the definition and identifying characteristics of disruptive innovation remains (Schmidt & Druehl, 2008). The recent application of disruptive innovation to higher education by Christensen and Eyrinh (2011) seeks to apply the theory of disruptive innovation to the functioning of colleges and universities. They present an optimistic application of core concepts of disruptive innovation to allow universities to change in response to the growing number of intense challenges that confront how they perform their uniquely valuable functions. There are also several key barriers to innovation in colleges and universities. Not only are federal, regional, and local governments reducing their commitments to education, increasingly they lack the resources to financially support it - even if they had the will. Accreditation, compliance, and authorizing agencies have become, for the most part, bloated bureaucracies more interested in self preservation and growth than in learning outcomes. The traditional academic culture is marked by inertia and outdated processes that limit change (Cummings, 2011). The innovation literature frequently refers to the Innovator s Dilemma (Birnbaum, 2005). In simple terms the innovators dilemma describes that the adoption of new innovations can have a serious impact on the status quo and results in changes to the way people have been doing something perhaps for decades. Leaders must have a clear, working understanding of the implications of this dilemma in order to create the vision and develop the plans for their organizations in the midst of these challenges. Such leadership will understand what it takes to balance the needs of their traditional institutions with those of the necessary, innovative structures that will need to operate outside of their normal management and value frameworks (Birnbaum, 2011).

6 There are several organizational and operational paradigm shifts that are central to the context and climate for disruptive innovation to occur within institutions of higher education. These include: 1) redesigning the delivery of courses and programs; 2) redefining the professorate. ( What appropriate structures beyond tenure might be? ); and, 3) rethinking the organizations and structures of the institution (Cummings, 2011). The latter matters of organization and structure require the most radical shifts in both leadership and climate as meaningful innovations tend not to come from established structures. Well-established and or larger organizations are too committed to existing paradigms, traditional populations, and are usually unwilling to pursue new and/or niche markets (Birnbaum, 2003). This provides challenges as well as opportunities for leaders in higher education to champion and implement disruptive innovations to re-position their organizations. Disruptive innovations, like virtual education" take hold in traditional institutions only if they operate outside of normal management and value frameworks with the consequent risk of losing institutional control. Christiansen at al., (2011) and Christensen and Eyrinh (2011) have suggested four characteristics to describe independent units within the larger organization. These are that the independent units are: free from the larger organization s control able to make their own decisions free to create entirely new kinds of organizations possessing characteristics that members of the parent organization may not like or want. These independent innovating organizational units must be free to drastically change the course by which users connect, engage, and relate with the world and transform society (K12WIKI, 2011). These essential but radical requirements will demand leadership styles and behaviors of the leaders of innovative organizations.

7 According to Christensen et al (2011), there are six important strategies that will be required of leaders to successfully transform organizations. These are: 1. Eliminating barriers that block disruptive innovations and partner with the innovators to provide better educational opportunities. It is critical to promote new, autonomous business models that have the freedom to re-imagine higher education. 2. Reframing threats so policymakers and agents of governance cannot frame the disruptive independent units as threats, and instead see them as opportunities to bring affordable education to more people. 3. Change the standards by which institutions are judged to remove barriers that assess and evaluate institutions based on inputs such as hours of instruction, credit hours, and student faculty ratios. Too many of the disruptive innovations in higher education still focus on inputs and/or are time-based. Policymakers should open up the policy environment to allow more institutions to use online education to move toward next generation learning models focused around things such as competency-based learning with actionable assessments, not just make the traditional model of education more convenient. 4. Modify the perspective relating to degree attainment to not solely focus on degree attainment as the measure of success. Degrees are a signal or proxy for skill attainment (Spence, 1973) but they are far from a perfect one, as seen in the amount of retraining that employers do as well as the current unemployment figures. Real outcomes and real mastery, as shown in work portfolios for example, are more important. 5. Drive disruptive innovation - some institutions have this opportunity, but to do so, they need to set up an autonomous business model unencumbered by their existing processes and priorities. They can leverage their existing fixed resources in this autonomous model

8 to give themselves a cost advantage over what to this point have been the low-cost disruptive innovators. 6. Reframe/frame the approach to online learning to make this an accepted core delivery system for learning rather than a substitute for traditional face-to-face instruction. Having reviewed the literature to identify factors driving change in higher education as well as existing literature on disruptive innovation and the role of leadership needed in response we now provide an overview of the case study. Method The selection of a case study research method for this study was appropriate given what is known on disruptive innovation in higher education (Christensen & Eyring, 2011) and yet, the substantial lack of existing research on the role of leadership. In describing the application of case study research to HRD Dooley (2002) noted that this method excels at creating understanding of a complex issue and can add strength to what is already known through previous research. He went further to describe case study research as emphasizing detailed contextual analysis of a limited number of events or conditions and their relationships (p. 335). Yin (1994) defined case study as scholarly inquiry that investigates a contemporary phenomenon within its real-life context, when the boundaries between phenomenon and context are not clearly evident; and in which multiple sources of evidence are used (p. 33). This case study provides a description of Concordia University Chicago (CUC), which is the second fastest growing private graduate school in America (Chronicle of Higher Education, 2011), and its journey out of insolvency and collapse to recognition as a leading example of the application of innovation in higher education. Concordia University Chicago is a private, faithbased comprehensive university established in 1864. In the last six years Concordia University Chicago has achieved over 800% growth in students enrolled. This case study explores the role of leadership in the conception and development of the College of Graduate and Innovative

9 Programs. Data were collected from document analysis and key informant interviews. The lessons learned from the case study highlight the role of leadership in the adoption of a broad range of innovations. Results In 2003/04, Concordia University Chicago was within 36 hours of losing a $49 million line of credit as a consequence of tuition revenue shortfalls leading to the serious violation of its lender s covenants. As a last ditch, but successful, effort to buy time, the university's governing board made several commitments to its creditors, including: A new, courageous, and innovative president/ceo would assume control of the institution immediately. A bold, new set of strategic and operating plans would be developed within three months. New, innovative, and autonomous structures would be established with a mission for growth and excellence. A new senior management team would be recruited and retained. Profitability would be achieved within one year and total debt would be reduced by 10% or greater each year for 10 years. Each of these commitments has been met. In 2005 a new president for Concordia University Chicago was hired. He was a known and proven leader to the governing board. They also knew him to be a bold innovator. Upon his arrival he established a new position, Senior Vice President for Research and Planning, and recruited a private sector, proven business leader to assume that responsibility. The senior vice president's initial task was to work with the board, faculty, staff and academic leadership, and constituents to rapidly develop new strategic and operating plans for the University. Within three months those plans were approved and put in place. The potential for organizational failure

10 and need to fulfill the commitments made to the creditors proved to be a powerful motivator and support factor for the innovations and resulting changes. Perhaps the most controversial and significant component of the plans was the creation of a new college within the University, the College of Graduate and Innovative Programs. This new unit initially organized all post-baccalaureate programs; all graduate and undergraduate adult and degree completion programs; all distance learning initiatives; all international programs; and all external partnerships. In addition, the College of Graduate and Innovative Programs served as the incubator for other innovations in the university including the creation of a new academic department called the Department of Innovation, which serves as the faculty governance and review body to fast-track academic initiatives within the College. In early 2006, a new founding dean was recruited and hired to lead the new college. He was a professional with long and broad education experience; including federal and state policy background; but who also importantly was a private sector business person and entrepreneur with considerable experience in HRD and organization development. The new Dean was given several important freedoms and responsibilities: He reported only to the president. He was authorized to establish new departments, assign faculty, and appoint leadership. He was given the freedom to approach new markets with new programs using new delivery systems. He was given the authority to change systems and structures as frequently as needed to enhance success and promote innovation. He was allowed to recruit and hire his own management team. He was held accountable to providing the resources to meet the commitments to the creditors. The result has been very rapid and substantial growth. The College of Graduate and Innovative Programs now generates over 60% of the gross revenue of the University and 127% of its net

11 profitability. Overall, it has grown at a rate of over 800% during the pasted six years, with terminal degree programs growing during the same period at a remarkable 2500%. The college now serves students in 37 states in the US and in 18 countries. It has just established a campus in China. Beyond its growth and return to financial stability, the College of Graduate and Innovative Programs has also received several important and prestigious recognitions from accreditors for the nationally acclaimed excellence of several of its programs. The alignment of the strategies identified in the case study seem to confirm and align with existing change management, organization development, and HRD literature, especially with regard to matters of organizational autonomy and leadership. Discussion The data collected from the case study highlight the role of leadership in driving disruptive innovation in higher education. The confluence of a series of macro-level changes occurring in higher education and a financial crisis event enabled Concordia University Chicago to embark on a series of significant innovations. The role of leadership at both the University and College of Graduate and Innovative Programs appears to have been a key factor to frame-breaking approaches to program development, growth, and delivery. Perhaps the combination of crisis and leadership provided the necessary impetus to break from long held traditions that often block will limit innovation in higher education. As supported by Christensen and Eyring (2011), the establishment of a new independent unit (the College of Graduate and Innovative Programs) appears to have provided the necessary organizational structure and works to execute highly innovative strategies. Even the name of the College appears somewhat unique in the US higher education context. The selection of leadership with a strong business orientation with extensive experience in organizational change and entrepreneurship generated ideas for innovation. The development and execution of

12 strategic plans to rapidly implement innovation also relied on top management support and direct reporting line to the President. Rather than develop evaluation frameworks to measure progress a system of accountability was established with resources provided so long as agreed commitments were met. It is important to note that there is great variation among types of higher education institutions. The mission, programs, and context of Concordia University Chicago and its application of disruptive innovation may not apply to all types of higher education institutions. However, this case does highlight the key role of leadership to the application of disruptive innovation in higher education. Future Research Even though some remarkably good research and theory have been developed recently on the role of disruptive innovation in higher education (Christensen & Eyring, 2011), there is a great need for further study. The need for future research is especially important to further understand the role of HRD in innovation in higher education. Future research should examine different types of higher education institutions including large public-supported universities, liberal arts colleges, and technical and community colleges. Furthermore, future research studies should also examine differences between higher education institutions in the United States, Europe, and other nations as research continues to highlight commonalities in the challenges confronting colleges and universities around the world. HRD scholars and professionals are in position to help study the roles, processes, and outcomes relating to innovation in higher education. The study of the roles of organizational development, program planning and evaluation, and talent and performance management in successful innovation has much merit. In general, the study of innovation in the context of HRD will yield great benefit.

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