10 February 2026

The Essential Guide to Employee Engagement

Recommendation

Businesses have long recognized the importance of cultivating proud, motivated and loyal employees. In fact, organizations that still operate with the mentality that workers should do their jobs and keep their mouths shut are likely to flounder. These days, the old style of management has largely disappeared – but so has the trust that once existed between employer and employee. Job seekers no longer expect to find lifetime positions within one company. Layoffs and cutbacks in a difficult economic environment have generated fear and suspicion among employees. Companies recognize that their long-term viability depends on finding, retaining and motivating good employees. Although she doesn’t break any new ground here, British author Sarah Cook competently explains why every organization should make employee engagement a priority. Cook provides numerous examples of British and American companies that embrace and benefit from employee engagement. BooksInShort agrees with her that it’s not too late for companies to change their approach. But the clock is ticking for sure.

Take-Aways

  • When employees are engaged, they are motivated and loyal.
  • Organizations where employees are not engaged have higher rates of absenteeism and employee turnover.
  • Engaged employees are more likely to provide exceptional service to customers and clients.
  • Employee engagement is based on four components called the “WIFI model: well-being, information, fairness, involvement.”
  • Employee surveys are the best way to measure engagement.
  • Senior executives establish and reinforce the corporate vision.
  • Employees must have access to upper-level management.
  • Talent shortages in business sectors worldwide obligate organizations to strengthen their talent management processes.
  • Managers who don’t provide feedback deprive their employees of a fundamental building block in their development.
  • Employees crave recognition. Give it to them. Be generous with rewards.

Summary

Engage Your Employees

Employee engagement unquestionably yields multiple benefits. Research and statistical data show that organizations that embrace engagement are more productive and profitable, and have more satisfied customers. In addition to having an overall positive attitude about themselves and their organizations, engaged employees:

  • Go out of their way to make customers happy.
  • View change as challenging instead of distasteful and intimidating.
  • Welcome opportunities to learn and grow.
  • Always maintain a sense of perspective, and don’t allow setbacks or mistakes to discourage them.
  • Are willing to try new things even though it may be uncomfortable.
“Employee engagement is personified by the passion and energy employees [give] to the organization and [to] the customer.”

Satisfied employees are not necessarily engaged. They may be skillful, knowledgeable, experienced, loyal, respectful and courteous but, unlike engaged employees, they will not make that extra effort, or go beyond a certain routine to serve clients or customers. Satisfied employees, while content, are not particularly passionate about their organizations, and may consciously disconnect or not offer input because they believe management largely ignores their views.

“Employees need to see that if they display talent and have potential, there are opportunities for them to progress.”

Corporate executives who recognize the importance of engagement typically conduct employee surveys every year or two. They encourage their employees to offer candid assessments of the company, their divisions, their colleagues and their superiors. Organizations that have never formally attempted to measure employee engagement can begin by assessing readily available material, such as performance evaluations, turnover and absentee rates, and training and coaching initiatives. Company-wide surveys or self-assessments are most effective if employees remain anonymous and can answer questions honestly without fear of reprisal. Although surveys vary widely depending on the industry, employees’ answers should reveal whether they believe they are appreciated, trusted and compensated fairly; have opportunities for advancement and career development; can freely approach managers with questions, suggestions and recommendations; and can speak proudly of the organization, and recommend it to potential employees or business partners.

“WIFI Model”

Survey results should reveal what employees view as the strengths and weaknesses of their organization. Some problems may be relatively easy to fix, while others may require detailed, long-range solutions. But, in general, employee engagement can be broken down into four components – “well-being, information, fairness, involvement” – known as the WIFI model.

Well-being

Well-being at work encompasses many things, but essentially it means that employees care about their company and it cares about them. Businesses often profess to having their employees’ best interests at heart, but their practices indicate otherwise. A state of well-being means employees take pride in their work and are proud of their organization. This is impossible to achieve without a motivated workforce. Most observers agree that motivation is self-sustaining. Employers can offer short-term motivational tools such as pay raises, promotions and recognition, but over the long haul, employees must find the drive within to be productive. Employees typically are motivated when they:

  • Feel that their jobs matter, and are not just tedious, mind numbing and repetitive.
  • Have a sense of responsibility and the autonomy to make decisions.
  • Feel connected to their co-workers and are part of a larger cause or mission.
  • Believe that their company properly utilizes their knowledge, skill and experience.
  • Gain recognition from their superiors and colleagues for worthy achievements.
“There is a buzz about an organization where employees are truly engaged.”

In the wake of recent corporate scandals, companies are putting a greater emphasis on “corporate social responsibility” (CSR). Companies recognize the importance of ethical conduct, and commitment to altruistic and charitable causes. Employees want to be associated with companies that are concerned with more than just profits. Many companies have been practicing CSR for years. Coca-Cola, for example, supports the HIV/AIDS battle in Africa by offering screenings for employees and their families. Lucent Technologies participates in educational efforts in India, Russia and Mexico. The Timberland Company gives its employees paid leave to work as volunteers for a national youth community service organization.

“When a manager uses a highly challenging but low supporting style, the environment created is often stressful and task focused.”

CSR also can help strengthen a company’s brand and image. Effective branding elevates a company in the eyes of consumers and sends a positive message to potential employees. Strong branding helps define an organization’s goals and objectives. Job seekers looking for more than good salaries and benefits will gravitate to companies with outstanding reputations. They want meaningful work with employers who have moral and ethical standards. An organization’s behavior has to be consistent with the corporate image it projects and the values it embraces. A CEO who lists “trust” as a bedrock value but uses hidden cameras to monitor employees’ comings and goings clearly is sending mixed messages.

“What best practice organizations have in common is that the work-life balance is taken seriously and the long-hours culture is discouraged.”

Well-being means that employees feel that their physical and psychological health is an organizational priority. Today’s workplace has become a lot more stressful. Cell phones and PDA devices make it more difficult for employees to separate themselves from the office. Overworked employees tend to be disengaged. Good managers are conscious of the importance of work-life balance and try to alleviate the pressure on employees through such methods as flexible scheduling. They let some employees work, to some extent, from home. Staggered shifts allow individuals to begin and end their days at times that better suit their personal situations. Other employees have the freedom to set their own schedules as long as their work gets done.

“Information”

Disengaged employees complain that they don’t have a clear idea of their companies’ direction. Even organizations that have defined a so-called “vision” need to formalize strategies that lay out their corporate goals and the behavior they expect from their employees. Although it may take years to achieve, a vision leads your organization to where it wants to be. A vision demands that employees maximize their potential and imagine limitless possibilities. This mindset requires employee engagement. To turn a vision into reality, an organization’s leaders must clearly identify its strategic goals and aspirations, focus on a handful of realistic initiatives instead of many, create a culture which consistently reinforces strategic initiatives, and ensure that executives and managers express their strategic goals.

“The design of jobs themselves is important to the level of engagement and ultimately has an impact on health.”

Senior staffers at Chrysler conduct regular sessions where they address topics of concern to employees. In addition, they invite a cross-section of some 60 workers to meet with a senior manager who briefs them on company developments and invites questions. A large telecommunications company conducts monthly video sessions where a staff member interviews an executive. The interviews are a vehicle for sharing important information with the workforce and make senior managers more accessible. The CEO at Hallmark Cards addresses new employees, explains the company’s vision and answers questions. Hallmark’s human resources personnel support executives by helping them communicate more efficiently. Coaching helps executives who are uncomfortable speaking in public deliver their messages more effectively.

“Fairness”

Fairness means treating people properly throughout their entire employment experience – from recruitment and hiring to professional development to rewards and promotion. Southwest Airlines’ managers place a premium on attitude and values, hiring only people who seem likely to fit in well with the culture; an individual’s skills are secondary. Companies that carefully screen candidates have lower attrition rates and save thousands of dollars filling vacancies. Assessment tests should take into account a candidate’s potential behavior, and his or her ability to react to circumstances that may arise on the job. Good managers are careful not to throw new hires straight into the fire. A gradual transition allows employees to become acclimated to the corporate environment. A new employee’s first weeks on the job can determine whether he or she will get a favorable impression, and may set the tone for years to come. Many employees complain about insufficient feedback about their performance. Part of the problem is that managers find performance reviews annoying and time-consuming. However, failure to provide regular and constructive feedback harms morale and adversely affects motivation. The policy at one large U.S. pharmaceutical company, for example, is to withhold merit pay from managers who do not complete performance reviews on time.

“Remember that creating true employee engagement is a cultural issue. It often involves breaking ingrained patterns of working.”

Ideally, performance assessments should include a mechanism for identifying training and development opportunities. Employees can indicate the areas in which they would like to further their knowledge, and managers can arrange accordingly for coaching, mentoring, special classes, workshops and independent study. Of course, training initiatives must be in line with departmental and corporate objectives. Wawa, which operates some 500 convenience stores across the U.S., pays the tuition of employees who enroll at specific colleges. Although Wawa pays its employees only minimum wage, the company believes that expanding their education benefits the community at large.

“Employee engagement only develops with top-down commitment and constant follow-through by senior managers.”

The inability to advance professionally is a primary source of frustration for disengaged employees. Companies that fail to manage talent properly stand to lose their most gifted employees. Organizations worldwide recognize that the talent pool in many sectors is shrinking, placing a premium on development and retention. Exceptional employees must have stimulating, challenging work. They should have access to managers and mentors they respect, and should be able to trust that their managers will acknowledge their abilities and award their accomplishments.

“Businesses with high levels of employee engagement provide appropriate and fair reward and recognition.”

Too many managers dwell on the negative and are quick to point out employees’ shortcomings, but slow to acknowledge their achievements. The workplace should be a positive environment where managers praise individual and group efforts. Some companies empower supervisors to award monetary prizes for exceptional work. But smaller tokens of appreciation – bringing in lunch for staffers or allowing everyone to leave early – can be equally effective.

“Involvement”

Involvement means keeping lines of communication open throughout an organization. Managers and employees should interact constantly. Some managers choose not to engage with their staff, or refuse to delegate tasks because of their basic insecurities and control issues. They’re worried that their department’s performance will reflect negatively upon them, or are frightened that someone else will do the job just as well and expose their shortcomings. They don’t believe their people are competent.

“In practice, values are best defined by employees in the business itself rather than just the senior leadership team.”

At some point, executives must overrule such practices. Managers must give employees the autonomy and authority to make independent decisions. Empowered employees are more productive, creative and energetic. They feel more responsible. Honda, one of the world’s most successful automakers, encourages its employees to be proactive and communicate across divisions. As a result, Honda employees are exceptionally proud of their company. Not surprisingly, Honda automobile owners benefit the most from this attitude

“Believing that you are fairly rewarded and recognized for the amount of work and effort that you put into a job is a key driver of engagement.”

Companies should strive to cultivate meaningful relationships between senior managers and employees. Managers who spend the majority of their time locked in their offices quickly lose touch with the basic needs and concerns of their staff. Leaders who spend time “in the trenches,” instead, send a positive message to their employees and generate engagement at the highest level.

About the Author

Sarah Cook is a management development consultant who helps businesses develop their employees’ capabilities and leadership skills.


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The Essential Guide to Employee Engagement

Book The Essential Guide to Employee Engagement

Better Business Performance through Staff Satisfaction

Kogan Page,


 



10 February 2026

Buying Your Own Business

Recommendation

This book is an excellent primer for anyone who dreams of buying a company. Russell Robb is an experienced business broker and investment analyst who covers many of the pitfalls and opportunities a first-time business buyer will encounter. In short, punchy chapters, he presents the essential details of negotiating and closing deals, plus valuable sample letters and agreements. His case studies of business purchases offer important lessons for new buyers. Although the author devotes a chapter to acquiring small businesses, his true focus is buying middle-market companies with annual revenues up to $50 million. BooksInShort recommends this worthy introduction to the art of buying businesses to professionals with entrepreneurial ambitions.

Take-Aways

  • People often sell their businesses due to “divorce, death or despair.”
  • Most of the companies for sale in the U.S. are service businesses.
  • Owners of family businesses usually prefer to sell to their relatives. If a family business becomes available to nonfamily buyers, find out why before you make an offer.
  • Only experienced buyers should try to acquire and turn around a troubled company.
  • You will need the help of accountants, lawyers and other professionals to buy a business.
  • Finding the right company is the most challenging part of the acquisition process.
  • It requires good research, patience, decisiveness and the ability to prospect full-time.
  • You are more likely to get financing if you have a good reputation and a focused business plan, and if you intend to invest your own money in the acquisition.
  • Be prepared to pay legal, auditing, appraisal and other expenses associated with due diligence examinations of possible acquisitions.
  • If your new business does well, you could recover your acquisition costs in three to five years.

Summary

Who’s Buying, and Why?

As more companies urge employees aged 45 to 60 to leave their jobs, these older professionals are finding themselves in need of productive work. Many have the skills, confidence and financial backing to buy an existing middle-sized business and become self-employed. In fact, this group of buyers accounts for most purchases of middle-market firms, those with annual sales of $3 million to $50 million. Other types of buyers include laid-off executives, former business owners and the independently wealthy.

“Buying a middle-market company is not a game for neophytes.”

People buy businesses for a variety of reasons: to start second careers, to replace lost jobs or to adopt new lifestyles. But these motives alone are insufficient. Potential buyers should conduct a personal self-assessment to determine if they have what it takes to run a business, handle customers, manage staff and work long hours.

Are You Ready to Buy?

Buyers often seek guidance from a professional “intermediary” to navigate the pool of available businesses. Serious bidders will cover the cost of an outsourced business search for up to one year. They also are prepared to pay legal, auditing, appraisal and other expenses associated with so-called due diligence examinations of businesses for sale. Transaction closing costs are extra. For a $5 million business acquisition, these expenses could add up to more than $278,000.

“Most individual buyers of middle-market companies take one to two years to complete an acquisition.”

Many sellers of middle-market businesses prefer to negotiate with credible bidders who will maintain the operational integrity of their businesses. Professional intermediaries say the most credible buyers are willing to invest $500,000 to $750,000 of their own money, have senior management experience and retain a search firm to hunt for the right acquisition.

“I am usually concerned when a small company owner wants to sell for financial reasons alone.”

To begin the business acquisition process, develop a plan for buying a company. Then investigate your options until you find one that seems to best meet your needs. As you proceed, you will price the company, structure a deal, carry out due diligence, arrange financing and, finally, close the sale. The most important task is finding the right enterprise and that takes an intensive search.

Shopping for the Right Business

Finding a suitable acquisition requires commitment, good research, patience, decisiveness and the ability to prospect full-time. Typical acquisition opportunities include subsidiaries that parent companies wish to sell, struggling firms that have not yet filed for bankruptcy and businesses controlled by venture capital funds that want to cash in on their investments. The competition to buy a successful company can be intense. You may have to contend with experienced, powerful corporate buyers such as venture capital funds and private equity firms. Sellers generally engage with serious bidders and ignore the rest.

“I would much rather see [the owner’s] motivations to sell based on such reasons as death, divorce or despair.”

Some buyers find acquisition opportunities by approaching business owners whose firms are not officially for sale. Or, they get leads by networking, attending industry meetings, or visiting bankers, accountants and brokers. Assigning a paid intermediary to screen prospects is the most efficient way to handle the business search. The types of businesses you are likely to encounter as you conduct your research include:

Service Businesses

Most companies for sale are service businesses. These organizations are attractive to buyers who want to invest relatively little capital, avoid foreign competition and generate repeat business. Buyers of service businesses primarily purchase human resources, not capital-intensive assets like plants, vehicles and equipment. Because workers are the main assets of service firms, these enterprises usually must expand their payrolls in order to grow.

“As a potential buyer, you should realize that most sellers of privately held middle-market companies do not know how to value their business.”

Bidders for service businesses commonly link their offers to certain conditions like retaining key employees and contracts, and achieving specific performance milestones. Instead of agreeing to pay one price at closing, a buyer may negotiate a payout schedule that hinges on, say, future increases in sales. The terms of a deal also could include a requirement that the buyer pay royalties to the seller in amounts linked to future performance.

Family Businesses

Family businesses are attractive to many buyers. When a family firm is for sale, the owner’s relatives are the mostly likely buyers, because internal control of the business is often a priority in families. However, less than one-third of family businesses stay in the founding family beyond the second generation. Eventually, most owners decide to sell to nonfamily investors due to management succession problems, family disputes, taxes of up to 55% on the founder’s estate or some combination of these causes.

“Unfortunately, it costs a buyer as much in professional fees to acquire a company with $1 million in sales as it does one with $3 million in sales.”

If you are interested in a family business, be patient and strategic. Families may be hesitant to sell their businesses, and they may even opt out of a deal at the last minute. If a company has suddenly become available to nonfamily buyers, find out why. Become well-acquainted with the people in the firm, and insist on speaking directly with the family member who has the largest stake in the business. Make the buyout offer in a face-to-face meeting with as many family members as possible to ensure their cooperation.

Troubled Businesses

Floundering businesses present buying opportunities. However, only experienced buyers should try to turn around a troubled company. Sure signs of problems include falling profits or rising losses, negative book value, cash depletion and loan defaults.

“Part of the difficulty in buying a business is that the buyer and the seller have different agendas when structuring the transaction.”

Exercising due diligence is particularly critical when you assess distressed companies. Know who controls key customer accounts. Watch for loan covenants requiring that debts be repaid before any sales can occur. Verify the accuracy of financial and inventory records. Determine the quality of outside accounting and legal professionals retained by the owner. Investigate the owner’s work ethic. Search for any outstanding lawsuits against the business.

“The process of buying a business is one where the more calls you make, the greater your results.”

Asset purchases offer an alternative to buying a company’s stock. They exclude the seller’s liabilities from the transaction. Check to see if any creditors have filed claims on the assets for sale and if landlords have the authority to reassign any of the seller’s leases.

Negotiating Terms with the Seller

Buyers and sellers have different priorities when the time comes to close a deal. Sellers generally want to collect as much money, and pay as little tax, as they can. Buyers want to make smaller up-front payments than sellers would prefer. To find common ground with the seller and reach agreement on deal terms, the successful bidder must:

  1. Focus on the process – Create a strategy, refine the search, evaluate all your choices and perform due diligence.
  2. Rely on professional assistance – Most business buyers are inexperienced, and many sellers are too invested in their companies to see them objectively. However, brokers, lawyers, accountants or appraisers can provide impartial, constructive advice.
  3. Invest considerable time and effort – Many people devote up to two years on a full-time basis to the job of acquiring a company. Persistent bidders succeed.

A Patient Acquisition Strategy

Buying a business is indeed a lengthy process. You will need a strategy to formalize that process and generate the greatest number of quality opportunities. The strategy should identify the type and size of the business you seek.

“Most buyers underestimate the importance of raising sufficient cash early on.”

The most common obstacles to closing a deal are price disputes, capital gains tax concerns, management succession issues, employee retention and payroll preservation. Price disputes are the biggest of these obstacles.

Screen the people who are selling the company according to their motivation. “Divorce, death and despair” are the leading catalysts of business sales. Prospective buyers who fail to determine a seller’s motives, values and expectations can waste significant time pursuing a deal that will never happen. Retain advisers and professionals to refine your bid presentation. In a competitive bidding situation, promoting your qualifications to the seller may enhance your credibility.

What’s It Worth?

Sellers of middle-market businesses rarely know how to price their firms. Families privately own an estimated 90% of all companies. Family businesses are not required to follow the rigorous accounting standards set for public companies. When valuing a middle-market company, potential buyers must determine if it has enough operating income to cover its debt payments and if the risk-adjusted return on investment meets their expectations. They should also consider the owner’s salary. Valuation based on discounted cash-flow analysis is another popular metric.

“Many acquisitions fail principally because the due diligence was inept.”

For manufacturing companies, a preferred valuation is a multiple of earnings before interest and taxes. Buyers commonly expect to recover the cost of acquiring a profitable manufacturing business in three to five years. A five-year payback period would translate to a 20% average annual return on investment.

“The seller sets the price and the buyer sets the terms.”

Bidders also look at book value to set the price of a business. The owner of a company with operating losses might sell it for book value, or assets minus liabilities. If a company has negative net worth, the seller might accept a price of $1 if the buyer agrees to assume accounts payable and other debts. Bidders may need an appraiser to determine the purchase value of a troubled business. If creditors force a seller into bankruptcy, they can use the Uniform Fraudulent Transfer Act to challenge a bid as unfairly low in order to seize assets.

“Business owners are highly motivated to pay the least amount of corporate taxes possible.”

Valuation techniques also differ based on what is being sold. In an asset sale, the seller of a Subchapter C corporation (an organization taxed under Subchapter C of the U.S. tax code) is taxed at the corporate level and then faces taxes a second time on the corporation’s proceeds when they are distributed. In many sales, the selling price is likely to reflect the transaction’s tax impact. In the disposal of a Subchapter S firm, the seller is taxed only once.

“The extent to which they stretch to minimize tax liability runs the gamut from legitimate to marginal to illegitimate.”

Other important factors that determine a company’s valuation are its real estate assets and any debt obligations the buyer would assume. If the buyer is purchasing inventory only, then the price should be discounted to cover for the possibility of product malfunctions.

Show Me the Money

Financing for business purchases can come from financial services providers that do asset-based lending, mortgage lending, inventory financing and insurance underwriting. Bankers feel most comfortable betting on niche companies with conservative balance sheets. Bidders are more likely to obtain funding if they have good reputations and focused business plans, and if they intend to invest their own money in the acquisition.

Negotiations of purchase terms vary by bidder. Individual investors with management experience, investor groups with no operational expertise, and a synergy-seeking competitor will take vastly different approaches to negotiation. In negotiations, bidders should present carefully prepared offers, communicate professionally and remain open to the seller’s suggestions. Even if the discussions go poorly, working hard to maintain the relationship may pay off in the long run. If you reach an impasse, adjourn and agree to meet another time. The key is to remain committed to the negotiating process.

About the Author

Russell Robb is a 20-year veteran of the mergers and acquisitions business. He has sold three businesses of his own and has provided investment banking and corporate finance advice to a wide range of middle-market companies. He is the author of two books, Buying Your Own Business and, from the Streetwise series, Selling Your Business.


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Buying Your Own Business

Book Buying Your Own Business

Identify Opportunities, Analyze True Value, Negotiate the Best Terms, Close the Deal

Adams Media ,
First Edition:1995


 



10 February 2026

Disrupting Class

Recommendation

The very real value of this useful and, at times, pleasantly surprising book comes from the way the authors apply their expertise in innovation to the field of education. By approaching public education’s crisis with new eyes – and conceptualizing education as a product or service like any other – Clayton M. Christensen (The Innovator’s Dilemma), Michael B. Horn and Curtis W. Johnson provide insights that escape the tired loops of argument that often define discussions about public education. These writers’ obvious willingness to look in new directions for learning innovation is matched by their genuine concern for everyone involved in education. However, they do seem a bit idealistic, as they focus so strongly on the pedagogical and conceptual aspects of education that they seem to skim over other concerns, like logistics and budgets. The authors acknowledge the legal monopoly governing public education without really addressing the social weight and inertia of such a monopoly. In fact, they seem to believe that positive disruption is almost inevitable. BooksInShort recommends this thoughtful book to anyone interested in social change and education, and – not tangentially – in how new technologies affect societies.

Take-Aways

  • Many factors contribute to the disappointing performance of U.S. public schools.
  • Schools use outmoded assumptions and don’t teach the way students learn.
  • Because each child learns differently, an individually tailored teaching approach works best.
  • To change the educational system, think in terms of disruptive innovation.
  • Disruptive innovations take root in places the dominant system doesn’t serve and then grow to displace it.
  • Educators have jammed computers into schools without changing instruction.
  • Computers will radically alter education, making it more student-centered.
  • How you talk to your kids before they begin school – and how much you talk to them –has a tremendous impact on their intellectual development.
  • Because education’s stakeholders disagree on what to change and how, reformers have few tools available.
  • A dated paradigm governs most educational research, so it is of limited value.

Summary

What People Want from Schools – and Why Schools Fail

Imagine what a school should do: help students become the best people they can; give them the background to play active roles in “a vibrant, participatory democracy”; guide them toward understanding the value of diversity; and teach them the skills they need to support themselves and contribute to a thriving economy. Unfortunately, American schools aren’t doing a good job of reaching these lofty, varied ideals. Many elements contribute to the weak U.S. educational system – a lack of funding, insufficient technology, uninvolved parents, a faulty educational model, the unions and more – but the blame never gets assigned correctly because Americans measure scholastic performance the wrong way.

“Explaining the disruption theory and a brief history of schooling in the United States shows that schools actually have consistently improved over time.”

When you want someone to do something, you can use “extrinsic motivation” (rewards from the outside) or you can rely on “intrinsic motivation” (satisfaction from the task itself). Right now, students have little extrinsic motivation to learn, so their progress depends heavily on the slippery issue of intrinsic motivation. Extrinsic motivation used to be stronger. People wanted to get ahead economically. However, their success led to prosperity, which weakened the need to study as hard. This has occurred elsewhere, too: As Japan prospered after World War II, fewer students studied math and engineering. The same phenomenon is happening now in South Korea.

“By disrupting the classroom as we now know it, we can break apart the fundamental obstacles with which educators, parents and students have struggled for so many years.”

The social and organizational legacies that shape public education greatly challenge those who seek to design a satisfying scholastic experience. The public system is based on standardization. Its roots in industrialization give it an inherent “factory model” of how to do things for maximum efficiency. Schools are also caught between “lateral” and “temporal interdependencies,” that is, changing how people teach information in one subject requires changing how they present it in another; altering the ninth grade curriculum requires altering the seventh grade curriculum. Hierarchical structures further limit educators’ ability to innovate.

“In every organization, there are forces that shape and morph every new innovative proposal so that it fits the existing organization’s own business model, rather than fitting the market it was intended to serve.”

The unwieldy educational system faces several even larger problems. First, it doesn’t teach material the way human beings actually learn it. The system operates on outmoded assumptions about the nature of intelligence and optimum learning processes. Howard Gardner’s 1980s research into “multiple intelligences” showed that the monolithic model is unrealistic. Gardner posited eight distinct intelligences, each with an aligned learning method. These intelligences range from fairly traditional areas, such as “linguistic” or “logical-mathematical” intelligence, both relatively easy to measure with standardized testing, to “interpersonal” and “naturalist” intelligences, which depend on interaction with other people or the environment, and so don’t test or standardize nearly so well. Each person learns somewhat differently. To function best, educators need to focus on those differences, provide “customized learning” and become “student-centric.” Some school systems, like Maryland’s Montgomery County Public Schools, are trying to personalize education, but that is very difficult within a factory model.

Changing the Educational System

To understand some potential ways to reform the educational system, consider “disruptive innovation theory.” If you chart a product’s or service’s evolution over the years, you will see two types of change. First, industry leaders produce a steady stream of improvements. These “sustaining innovations” are important. People and organizations create such innovations as they get better at what they do. However, from time to time, another type of change occurs, a “disruptive innovation.” Industry leaders don’t produce this kind of shift, and manufacturers don’t market it to current customers of the field’s dominant products.

“Public education’s present commercial system is largely a value-chain business.”

In fact, most disruptive innovations are inferior to their field’s leading products when they emerge. Early personal computers had very little computing power compared to mainframes. The first portable radios sounded inferior to standard radios. However, these lesser products improve at a sharper rate than dominant products, eventually overtaking them. Industry leaders often see this clash coming but their institutions are tied to their current organizational and production practices. They see their fate, but can’t escape it. That’s the current situation endangering public education. Those involved desperately want to change it, improve their schools and better fulfill their missions. In fact, they’ve been advancing steadily over time, raising test scores and doing a stronger job at the highly varied missions that the intersection of history, policymakers and organizational structures has handed them.

Computers in Education

The way teachers have and haven’t used computers in public education demonstrates how established systems struggle to integrate disruptive innovations. Educators poured money into computers and, for a brief time, radically increased the number of computers in schools. As recently as 1981, schools averaged “one computer for every 125 students.” By 2000, that ratio had risen to “one for every five students.” But, when the schools got computers, they “crammed” the machines into the existing structure, minimally affecting the status quo. Using computers became just another activity for students to perform. Instruction still flows from teacher to student. Schools continue to test in “monolithic” units, rather than pacing their tests to match students’ needs. For a model of how to integrate computers effectively into curricula, educators can track the paths of other disruptive innovations, like online classes. Today, small schools that can’t offer Advanced Placement (AP) or “credit recovery” classes allow their students to take such courses online.

“Almost all disruptions take root among nonconsumers. In education, there was little opportunity to do that.”

Parents can use computers to augment traditional homeschooling. The first step is probably “computer-based learning,” though it takes only moderate advantage of a computer’s potential. Even with simple software that replicates existing conceptual structures in established disciplines, homeschooled students will benefit from “different pathways” and paces for learning. Over time, such student-centric technology will replace more basic approaches. Apex Learning, founded by Microsoft’s Paul Allen, shows the sort of path this kind of disruptive innovation might take. Apex specifically targeted providing AP courses to secondary schools that couldn’t afford them. In 2003 and 2004, 8,400 students took these courses. Three years later, 30,200 students participated.

“Virtually every successful disruptive innovation took root similarly – competing against nonconsumption – so that people were delighted to have a product, even if its capacities were limited.”

Computer-based learning will change and even displace traditional learning as technology gets better and cheaper. Newer technology will give teachers more options for crafting individualized education plans for students. As the U.S. faces a teacher shortage, the instructors who remain in the system will play different roles. Some will help create educational tools like the “Virtual ChemLab,” where students take part in increasingly sophisticated experiments. Others will coach, advise and encourage students. Assessment will also change. Instead of testing students in big groups at preset times, evaluation can be individualized to fit students’ needs as they master the material.

“When students learn through student-centric online technology, testing doesn’t have to be postponed until the end of an instructional module and then administered in a batch mode.”

As the educational system becomes more student-centered, other changes will occur. For instance, the current textbook production and distribution system is, like the educational system, hierarchical and monolithic. Change might include texts that are customized to individual needs. As those needs take center stage, textbook marketing and distribution will also shift. Users will be able to generate their own content more quickly and easily, and to produce “collaborative learning libraries” where people learn from one another.

Educational Research

Teachers and administrators feel some frustration with educational research. Often it doesn’t seem to produce any answers or, if it does, schools rarely implement them, even when they come from valid research. However, while teaching is, in part, “an art” and, thus, always depends on individual interpretation and performance, research can accomplish a great deal – if researchers update its “prevailing paradigm.” Education research now resembles pre-1700 scientific research. Then, even people who made useful observations about the natural world lacked the rigor of the scientific method. Educational researchers have to shift from trying to solve specific problems affecting average students in given systems and focus on students as individuals.

“By employing chartered and pilot schools as heavyweight teams and R&D laboratories, school districts can create new school architectures for everyone.”

Research passes through “descriptive” and “prescriptive” stages. In the first stage, researchers observe a field, note details, and build abstract models or “constructs” to help them understand their data. This leads to classification, when they identify categories of events that share specific characteristics, and find correlations among these categories and the information they have gathered. Descriptive research is “inductive,” moving from data to conclusions, and can only go so far. To advance beyond its limited benefits, researchers must “deductively” reason and seek oddities that don’t fit the current structure. Such “anomalies” disrupt existing conceptual structures, pushing researchers to learn more. Competing models may appear, none of which is clearly more valid than the others.

“Few reforms have addressed the root cause of students’ inability to learn.”

In the prescriptive stage, researchers seek “prescriptive bodies of knowledge.” They look beyond correlations to try to understand the causes of specific relationships. Unfortunately, solid prescriptive research in education is not yet the norm, so, for now, educators should evaluate the reliability of research-based statements, even though they generally welcome researchers who try to tell them “what they ought to do.” Look at the findings’ “internal validity”: Do the researchers’ conclusions follow logically from their premises? Are any other explanations likely?

Factors External to School

The passage of the No Child Left Behind Act gave American public schools the job of eliminating poverty. However, family and community factors outside the school shape several major contributors to poverty, including those directly related to education. Familial influences during the first three years of life determine a great deal of a child’s intellectual capacity. In educational terms, the most important influence is a specific practice: talking to children. All parents speak to their children but, often, in families from lower economic classes, speech is very functional. It focuses on specific things a child needs to complete.

“Political and school leaders who seek fundamental school reform need to become much more comfortable amassing and wielding power because the other tools of cooperation will yield begrudging results at best.”

However, conversation that goes beyond mere function – the “extra talk” called “language dancing” – encourages neurons in the young brain to form many more connections, thus laying the groundwork for superior “intellectual capacity.” Through language dancing, you engage children in hypothetical situations, and ask them to recall things they’ve encountered and to reason through their decisions. This extra talk starts long before infants can give any external sign of understanding. Therefore, for any public education reform to succeed, the reformers must address class-based differences in parenting. This might require public schools to add parenting classes; it will certainly involve the cooperation of doctors and child-care professionals.

Tools for Change

When leaders want to change their organizations, they can turn to various “tools of cooperation,” from “visionary speeches to outright threats.” Which tools will work depends on how people align along two general spectrums: how much they agree on “what they want” and how much they agree on “cause and effect.” If groups agree on how to do things, but not on the goal, leaders can use standardized training and negotiating processes. If the groups concur on goals, but not on how to achieve them, visionary leadership is useful. If they share common goals and methods, moderators can use “culture tools,” like norms and the democratic process, to keep them on track. When participants disagree on both goals and methods, leaders must use “power tools,” such as “fiat, force, coercion and threats.” If the disagreements are intractable, separate the two groups.

“In any community, the world over, people disagree wildly on education.”

Frontline public school personnel disagree about the best goals and processes for education. That leaves leaders only three tools for creating change: “common language, power and separation.” If you can create a common language a group can use to discuss a situation, it can move people closer to agreement. Instituting change may require demonstrating that alternative methods work better. Visible success will win support.

About the Authors

Clayton M. Christensen is the Cizik Professor of Business Administration at Harvard Business School, and the author of The Innovator’s Dilemma and The Innovator’s Solution. Michael B. Horn co-founded the Innosight Institute. Curtis W. Johnson served as chief of staff to the governor of Minnesota and was an early champion of charter schools.


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Disrupting Class

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How Disruptive Innovation Will Change the Way the World Learns

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