Changing Business Models: Noticing The Winds Of Change

The way we do business and the business models that support this in the three important areas of health-care, law and higher education are undergoing significant change and will continue to do so in the foreseeable future. What was already a fast moving world has moved into hyperdrive due to the Internet and now the impact of social networking. This presents challenges for those of us who spend a good deal of time working to be successful in our day-to-day efforts.

I am reminded of sailing. Having a good boat handling technique is helpful. It enables you to move forward in the short term. However, not being able to diagnose the wind shifts that are coming up may undo all of the technique and result in one's boat being stuck in the doldrums, perhaps while other boats pass speedily by. The sailing analogy breaks down here, because in sailing the same techniques can be applied to new wind shifts while in real life, we may need new techniques and even a new kind of boat to be successful.

Health-care

One aspect of health-care that I believe will change is that knowledge will become more dispersed. By knowledge here, I mean both medical knowledge as well as medical practice. The knowledge of specialists will to some extent be pulled into the hands of the general practitioner. Knowledge of the general practitioner will be moved into the realm of the physician assistant and nurse. To varying degrees, the knowledge of all of them will be pushed out to the patient. The patient or person desiring increased wellness will in time be an even more sophisticated user of this medical knowledge. There may even be "educational experiences" in how to access and make use of this knowledge for disease prevention or disease management.

All of this will be greatly facilitated through knowledge embedded in software systems, by knowledge being made widely available via the Internet and through social groupings on the Internet. The dispersion of knowledge will be aided by efforts to standardize the knowledge based on the simplification and increased reliability of diagnosis and treatment. This will result in new ways of packaging and organizing to provide the knowledge. New provider entities with new business models will arise. All of this was made clear to me in the book, "The Innovator's Prescription, A Disruptive Solution For Health Care"by Christensen, Grossman and Hwang.

What the actual new health-care "boat" will look like remains to be seen. However, I do believe that it will be a new kind of boat. The entrenchment of the status quo will be an impediment to this. However, there is no holding back the knowledge that will move like a torrent through the health-care system. The result will be that the underlying financial models will also change in terms of who are the providers in the system, how they are compensated and ways that the patient retains more of their financial resources due to their own efforts.

Law

A similar dynamic is occurring in the legal world. The knowledge of laws, decisions and legal theory which at one time was only available at law libraries or law offices investing large resources increasingly resides on the Internet in a much more accessible format for practitioners. Standardization of knowledge within law offices which has already made knowledge more accessible within the individual office will lead to new types of providers and forms of business entities providing legal services.

The ability to draft a will or simple agreement is now available online to the lay person. This trend will increase in the future. In time, the average person will have more opportunities to gain basic legal knowledge, to learn to be alert to legal issues and the need for guidance and will have increased competency in accessing and using this knowledge.

The result will be that the structure of the legal field will change. The players and what they look like will change, the mode of compensation will change as well as the role of the client. The individual will assume more leadership in their legal protection.

My insights here were increased by reading "The End of Lawyers? Rethinking The Nature Of legal Services"by Richard Susskind.

Higher Education

A recent conversation that I had with a leader in higher education increased my awareness that similar winds of change are also occurring in higher education. Just as the past financial model in health-care is no longer viable, the past financial model of higher education may also succumb to the pressures of our current world. The main financial model in higher education has been: You as the potential student will pay our institute of higher education a large amount of money. In return we will provide you with a residential experience, expert faculty, libraries and other resources and a face-to-face milieu in which to exchange ideas. We will also provide you with the opportunity to socialize, party, find a mate and attend football games. As a result of this experience, you will be able to find a good job and be financially independent.

The question is whether this model is still viable. Can the potential student (or his or her parents) afford this deal? Will the graduate be able to find a job? If so, will they be so weighted down with loans that they will spend a good part of their young adult life in debt delaying their true financial independence? Is this large price tag worth the benefit of a few parties and football games? Are there other ways to obtain knowledge and the skills to use knowledge that have a better return to the person? Are there other ways to socialize in order to exchange ideas and have a rich educational environment?

The higher educational business model is already changing. Many people are now utilizing distance education. Distance education courses provide education for people who are also managing the demands of a job. Distance learning enables people to immediately apply their new knowledge in the real world which ensures that the knowledge becomes more integrated into their professional skill set.

Just-in-time learning in organizations has taken off due to the use of CD ROMs and the interactivity of new Internet capabilities. Future Internet technology will provide more of the traditional classroom benefits along with many new unique benefits arising from new Internet applications. Younger students will be more disposed to learn this way. All of this pushes the responsibility for learning down to the student.

Corporations are taking more initiative in terms of education whether it is to provide basic literacy and math skills or to provide skills necessary for professional qualification and advancement. Companies like General Electric and McDonalds run their own institutes which ensure both development of the person and the relevance of the education.

Conclusion

The idea that knowledge is the province of the few to dispense to the many - whether in health-care, law or higher education is changing. In the future, each person will be in the position to exert greater leadership in their own wellness, legal protection and education. As part of this, business models will change.

This brings us to the all important question of what you and I can do about all of this. One thing is to avoid complacency and the illusion that short-term fixes will lead to long-term success without adjusting the business model to adjust to the future. Another is to be open to observe the wind shifts. In addition, we can ask: What is the core benefit that we are being asked to provide to those we serve and could be serving and what are other options and assumptions about how best this can be met.

We can recognize that though we may love this boat that we are currently sailing along in, this is not our only option. There may be a better, even more enjoyable, and fulfilling boat and a greater potential for success in our future and in the future of our children, patients, clients and students. Let's start thinking about what it might look like.

Comments

[Barry Camson]

Vera,

Thanks for your wonderful and very thoughtful comment. Your perspective on this adds to the inquiry here, especially in view of your own experience in both the on-line and bricks and mortar educational realms. Particularly helpful is your distinguishing the educational experience for the young from the continuing educational experience of those who have already had the developmental experience of resident or in-person education or those who cannot at the present afford in time or money to have a resident or in-person educational experience.

[Vera Dolan]

Technology is a wonderful thing and if it were not for it, I wouldn't be working in the online higher education field and having such a rewarding professional experience. The opportunity to learn relevant concepts and skills at your own convenience, which can be applied almost immediately, is a shift never imagined (and sadly not experienced) by ancient educators. If I can have all the education I need through my laptop, at any place and time I decide, what's not to like? Who cares if I do not have a full social on campus experience? I'm not in school to socialize, but to learn something I can use for my career aspirations and advancement. Right?

Well, not in my view. At least not entirely. If we are discussing young students, great part, if not most, of the educational value lies in "socializ[ing], party[ing], find[ing] a mate and attend[ing] football games." What those kids learn at school -- yes, the ones built with bricks and cement -- no online environment will ever achieve. In order for kids to have a shot at succeeding in their professional lives and help societies around them to evolve, they need to learn basic co-living skills that can only happen on campus. If my kids attended an online university from the get-go, I wouldn't have the satisfaction of honestly saying I'm paying for a substantial and for-life education. Yes, they would be learning many useful things to be applied to a job, but what about for their lifelong career?

Education should not be only about applicable technical and core-job-related skills. Education has a lot to do with relationship with others, solution of people's issues, organizing events in which you see people's responses live and in Technicolour, so you can learn life lessons from it.

The wind shifting process in the acquisition of knowledge is a miraculous wonder and people should take full advantage of it. If technology can be the means to give most people access to education, perfect. If technology can give adults the chance to get an education later in life so they can advance in their careers, perfect too. If technology can allow my kids to review a lecture once they get back to their residence, also perfect. But having said that, let's not lose the baby with the bath water. Call me old-fashioned -- although I would call myself "been there, done that, know the ups and downs of both online and traditional schools" -- but in my view, traditional education in which people have to walk from room to room is still a financial model that works for many, particular for parents who want their kids to get a more holistic and -- why not? -- authentic learning experience. It's about kids discovering in themselves resources that otherwise they would not find via distance education. It's about learning about who they are, what their values and beliefs are, how they socialize, how they juggle people's issues in real time, how they can find significant knowledge without just googling it. And if when they get back home they can continue learning via a computer, that's terrific.

Technological wind shifting in higher education is a reality, but it shouldn't be the only reality; rather, a complement to kids' evolving-into-adulthood experience. But in the case of adult students, who have lived enough to have acquired important face-to-face skills, then the shift is more than a welcome blessing.

[Barry Camson]

Vera,

You clearly set out an important issue. When is it appropriate to rely on new roles or new mechanisms invested with knowledge and when is it not. When more customers and clients start responding positively to these new roles, this then leads to viable new business models.

Barry

[Vera Dolan]

I agree -- the rapid spread of knowledge has made us rethink a great number of practices, approaches to how we operate our lives and business, and entire world views. While the democratization of knowledge has allowed us to make much more informed decisions, still, I become concerned about the "cheapening" -- if there is such a word -- of it. Everyone and their dog find themselves an expert in this or that overnight. You have people questioning doctors and lawyers because of something they read on the internet. I'm obviously not saying we should never question those and other professionals; after all, no one is infallible. However, there is a new level of self-righteousness in the current world that allows for people making irreparable mistakes, just because they thought they KNEW about X or Y. Having gone through a whole process of preparing our wills through a lawyer, I cannot possibly imagine how my husband and I could have done that over the internet.

Change can be good, no doubt about it. But acquisition of knowledge and application must be exercised with caution.

This whole thing reminds me of a dialogue Margaret Atwood once had with a brain surgeon. As he told her that he was thinking of becoming a writer once he retired, she replied: "That's right; and I am thinking of performing brain surgeries when I retire."