My friend Tom Vander Ark recently authored a telling piece titled the “Innovator’s Dilemma: Edu Style—The Long Transition to Digital.” In it, Vander Ark shares his notes from a talk that Simon Allen, CEO of Macmillan, gave at an education investor conference. The piece illustrates, intentionally or unintentionally, how hard it will be for publishers to escape the innovator’s dilemma in the shift from print to digital, a shift that, according to BCG, is under way and will be disruptive.

First, the market is not there yet. Allen reportedly said that the transition from print to digital is taking some time. The reason? Customers on the ground—existing higher education customers, for example—still treasure the printed textbook. As a result, the majority of Macmillan’s revenue is still from print.

This is important because the hype around, investment in, and growth of digital products—Macmillan’s own digital portfolio is growing—have driven the perception that disruption of the print world will happen overnight. This is likely untrue, which shouldn’t be surprising. Many disruptive innovations, from those in industries ranging from steel to automobiles, can take at least a generation.

It’s also unsurprising that existing higher education institutions, themselves a part of the incumbent value network of products and services in education, aren’t adopting disruptive products and services right now (read Julia Freeland’s piece here about why this happens). Much more likely is that new entrants that comprise a small share of the education market today will link up with new education content providers in a new value network and, as they grow, so, too, will the disruptive content providers.

As a result, the incentive for mainstream publishers is to continue to serve their mainstream customers and not invest in the autonomous disruptive business models that may be small today but critical tomorrow.

Second, as publishers move to digital content, the incentive will be to do so in a sustaining innovation way—as a hybrid—by bolting on digital products as line extensions or new product offerings within their current business models, but not as autonomous business models designed to ultimately cannibalize and disrupt their own business. There are four tests to determine whether an offering is a sustaining hybrid innovation:

  1. It includes both the old and new technology.
  2. It targets existing customers rather than nonconsumers.
  3. It tries to do the job of the preexisting technology and therefore its performance hurdle must be quite high.
  4. It does not significantly reduce the level of wealth and/or expertise needed to purchase and operate it.

Macmillan may be following this pattern. Vander Ark quotes Allen as saying, “Blended Learning is what we’re all about, with print and digital content and assessment.” Vander Ark also writes that, “Allen cautions his colleagues against arrogance noting that ‘some people still want print—we let customer [sic] choose.’ Digital delivery has added a new customer option but it has added a new cost center and degree of complexity to the instructional materials business.” On the flip side, Allen did note that the sales challenge is different for different channels and that Macmillan has adapted to serve online and blended providers who have very different purchasing habits.

Third, the natural instinct of all businesses is to listen to their best customers, but doing so is what causes disruption. The reason why is that a company’s best customers send an unambiguous signal that for them, an emerging disruption is irrelevant—because for a long time it is—and therefore not worth the investment. Vander Ark observes that because Macmillan is listening to customers and focusing on results important to them, it should be able to solve the challenge of disruptive innovation—but the opposite is far more likely.

We don’t yet know how the shift from print to digital will occur. Inevitably incumbent publishers will introduce many digital products that are sustaining relative to their existing offerings. But if digital content unfolds in disruptive business models, then the signs are there that it will be difficult, although not impossible, for established publishers to catch the wave.


  • Michael B. Horn
    Michael B. Horn

    Michael B. Horn is Co-Founder, Distinguished Fellow, and Chairman at the Christensen Institute.