Big companies aren’t always great innovators. But how come?
Clancy Marshall, VP of Global Core Platforms at Pearson, posed that question to Inkling founder and CEO Matt MacInnis at the Book Industry Study Group (BISG)’s “Adapt, Innovate, Learn” conference on higher education in New York City this morning and received this two-word answer: finance departments.
As MacInnis explained, larger organizations’ finance departments are designed to optimize business processes, whereas in a start-up environment “there is no business to be optimized.”
Rather than going after innovation through acquisitions, as Marshall pointed out bigger publishers tend to do, smaller players like Inkling are built the other way around—in order, in MacInnis’s words, to “allocate capital haphazardly to the riskiest things you can come up with that may have the highest return.”
But MacInnis doesn’t think big education publishers are fated to lumber sclerotically to their deaths. Instead, he sees them positioned to drive further innovation as long as they can emerge from the technological transition phase that currently prevails.
Here are some things MacInnis believes publishers are doing well and some things they aren’t.
Traditional publishers have a “shared vision for what the future of higher education learning technologies ought to look like,” MacInnis says, and this is a collective strength. That vision includes adaptive, personalized approaches to content, similar to what Houghton Mifflin Harcourt CEO Linda Zecher has described.
“Whether this is going to be a bunch of Balkanized systems,” though, “is ‘TBD,’” MacInnis says. “Most publishers understand that HTML5 is the format of choice,” even if they’re prone to getting bogged down in discussion of standards.
“Taking preexisting assets and content…that can be repurposed—I think that is the right evolutionary approach.”
MacInnis calls it “the book disease”: “When you develop a product in print, you use a certain workflow to develop that book, and you come up with all of the features and specifications that are going to be in that book…and then you build that book, and you don’t ship that book until it’s done.”
Software, by contrast, isn’t built “in one fell swoop” but by iteration.
“Undoing this mentality that version one has to have all 713 features in its first edition” is among the topmost challenges for education publishers seeking to innovate. “It should be a ‘version zero,’ a beta you put in front of a small number of instructors.” The structural barriers Marshall attested to make that a tall order, but as MacInnis sees it, “there is no other way to build software.”
And developing software is essentially what education publishers are—quite rightly—already doing.
“The most expensive way to test software is to build and ship it,” MacInnis says. Yet “that’s what most organizations do.” Investing in a more agile product development approach “takes longer on the front-end, but the end-result from the customer’s perspective is much better.” And that, in MacInnis’s view, is where innovation and growth come from. Not finance departments.