The future of learning at work: Integration vs. Innovation
The development of technology markets follows a tried and true pattern: a period of innovation leads to a period of integration. As fascinating as the LinkedIn acquisition is to the business world — it is impressive and the largest M&A deal ever for an Internet company — I’m concerned about what this acquisition means for the pace of innovation in organizational learning & development. Yes, LinkedIn, Microsoft and Lynda are all companies that have the capabilities needed to create a business that is greater than the sum of its parts, however in the aftermath of an acquisition we often realize that companies are better at identifying sources of value than they are at translating that value into real business performance.
Companies face many challenges trying to create real value out of acquisitions. A McKinsey piece earlier this year stated, “The explanation is intuitive: understanding the theory behind how two companies can come together and brainstorming revenue-synergy opportunities are exciting, but operationalizing the ideas is more complicated.”1
Many are concerned that this acquisition will create a big brother-like platform where LinkedIn and Microsoft have data about all of us, at all times, at different points in our lives. The biggest risk I see of this acquisition lies in finding ways to create value for organizational learning — a big focus for us at Udemy for Business. The greatest value for organizational learning lies in continual innovation. Yet, this acquisition signals a switch from innovation to integration. While there is a compelling vision of how Microsoft will incorporate LinkedIn’s professional network — a newsfeed with learning updates from a user’s professional network, enterprise marketing software that can automatically surface relevant prospective clients, and office tips at your fingertips in Office 365 — the question is how successfully can these businesses integrate to innovate learning?
We’ve seen the shift from innovation to integration play out in HR software before. Stand-alone applicant tracking systems, payroll, and other similar systems replaced more manual processes as they matured. Then large companies like Peoplesoft and Successfactors (who previously were innovators) began to integrate disparate solutions into a suite of products that would presumably add more value together than alone. However, they ran into problems creating value due to integration challenges. Even giants like Google face integration challenges. For example, Google has failed to integrate Nest (which it acquired for $3.2B) into its latest product innovation, Google Home. Integration often looks more promising on paper and it almost always happens at the expense of innovation.
When it comes to skills gaps at work, we know that the global economic skills issue is significant and widening, but we don’t know what level of interest Microsoft truly has in helping close that gap. How can Lynda, a company that is in the business of learning, continue to focus and innovate on learning, when it now is part of a massive business integration — its tools, products and processes must not only work with LinkedIn, but now also with Microsoft?
While we don’t truly know what is in store for the world of organizational learning coming out of this acquisition, I do know that there are many challenges ahead. When we cannot focus, we run out of great, innovative ideas. At Udemy, we will continue to focus on learning innovation and be the force that transforms the way organizations and people learn.
Sources:
Rebecca Doherty, January 2016, McKinsey survey on global M&A capabilities 2015, http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-the-best-acquirers-excel-at-integration
David Heath, June 2016, http://www.itwire.com/opinion-and-analysis/whiskey-tango-foxtrot/73350-should-i-divorce-linkedin-and-lynda-com.html
Leena Rao, May 2016, http://fortune.com/2016/05/18/google-amazon-echo-home/
