100 Paper Cases … 2 Online Challenges: HBS in the Digital Age?
“Over the last few years, the landscape for online education has changed dramatically. New and more powerful technologies are creating opportunities not only to reach wider audiences, but also to offer engaging, impactful learning experiences. HBX is a new digital learning initiative that complements and furthers the School’s mission. It is an innovative endeavor—employing creative pedagogies, offering distinctive courses, and using new platforms. It is a place where we can use technology to bring students and alumni from around the world together with faculty. And like our HBS programs, HBX is modeled on our core principle of participant-centered learning that is highly engaging and interactive.”
-Bharat Anand, HBX Faculty Chair
Education in the Digital Age: SPOCs, and MOOCs, and VLEs! Oh, my!
Led by the demands of the rapidly evolving digital consumer (read: millennial students), the digital revolution has reached classrooms across America, from kindergarten through university. Students commonly rely on Virtual Learning Environments (VLEs) like Blackboard to manage their courses, and instructors have broadened their teaching approach to include social technologies with things like blogging and video assignments.
At most colleges and business schools, teaching has reached the Internet with MOOCs (massive online open courses), which allow professors to reach millions of virtual students worldwide (and free of charge) through engaging, multimedia platforms like edX and Coursera. UNC even offers a fully online MBA program and Cornell opened a campus in NYC offering a 1-year technology-focused MBA … but where does that leave HBS? With a stronghold on the #1 ranking for top business school, a brand legacy dating back 100 years, and a pedagogical approach that is the antithesis of “online”, it’s hard to imagine why the school would invest in digital. Yet, though many of us may not experience it currently, we have, in our own unique HBS way, begun to broach the space in recent years. Let’s understand how first, and later, why.
HBX: the HBS pedagogy goes digital
In June 2014 HBS launched CORe, “a digital reimagining of Harvard Business School faculty’s thinking, philosophy of learning, and approach to business education.” Rather than going for the industry-standard MOOC or online MBA program, HBX, as the new digital HBS department is called, pioneered SPOCs (Small Private Online Courses), delivered on its internally-developed, proprietary MOOC-like digital platform. CORe offers rigorous online courses offered to a brand-new market: a pre-MBA audience, eager to learn the fundamentals of management. Like the physical HBS classroom, teaching is case-based and participant-centered, enabled by online technology developed to promote discussion, questioning/commenting, interactive exercises, peer-to-peer information sharing, and even cold calling. HBS offers CORe throughout the year to individual and company cohorts, and as a requirement for incoming MBA students, for a tuition of $1,800 with 50,000+ now having completed the program.
Meanwhile, HBX has also been developing a synchronous digital classroom called HBX Live. In the HBX Live classroom (example video here), ~60 students sign in using videoconferencing technology and are projected onto life-size screens in front of an HBS faculty member, with whom they interact as they would if in-person. The classroom is enabled by a full production crew, including mobile camera operators able to track the movement of the professor, and a quasi-television-studio-team who manage feeds and the online platform on the backend. This groundbreaking initiative, though still young and not monetized, offers huge untapped potential for creating new opportunities for enhancing the learning experience across educational programs at HBS and beyond.
Next Steps: Advice for Dean Nitin Nohria
It is no surprise to me that HBS has built a digital model that is disconnected from what goes on in the traditional classroom. For those of us in the business of digital transformation, it is commonly known to keep your core business intact while inspiring innovation within the edges of your company. By looking at peripheral projects for innovation, you identify net-new products/services or customer segments that align with, rather than combat with, disruptive trends in your industry. Instead of compromising their traditional MBA and Executive Education revenue streams, they’ve built a competitive advantage by being fundamentally different in the online education space, and therefore captured new revenue. Great! But given the rapid advancements technology will make in the next decades, this should just be the beginning for HBS. By responding to a few Dean Nohria quotes, I’ll offer my opinion on what HBX might want to do next.
Dean Nohria quote:
“I can’t – and won’t – predict what HBX might look like in the future.”
“I do not believe our M.B.A. program is at risk.”
Well, Professor Clayton Christensen (Disruptive Innovation Expert) expects half of the United States’ universities could face bankruptcy within 15 years due to digital innovation… As fellow incumbent MBA programs lead disruption in the space, HBS needs to continue to diversify its large legacy business models and identify new streams of revenue to stay viable long-term:
- We’ve developed what might be the future of the classroom. I would trademark, package and sell our SPOC proprietary platform as a digital B2B education platform for other schools and universities- before others do it better (Sloan and GSB are already experimenting with similar technology).
- As shown in the revenue section in the appendix below, global, digital and ExecEd is where the big money is for HBS. I would build out HBX Live as an international Executive Education curriculum and alternative to the current in-person-based program. This has the capacity to easily double our revenue streams.
- As MOOCs take the nation by storm (two-thirds of top academic institutions offer online courses today), I would offer a wider array of SPOCs by expanding the CORe platform to current students and non-HBS-students alike. This will make for a strong (inter)national brand play, keep us competitive in the market, and potentially prevent the Coursera’s of the world from poaching HBS faculty or even students. More in Appendix B below.
Appendix A: How HBS makes money
Harvard Business School’s biggest source of revenue (31%) is our publishing business. We sold 12 million cases last year, with our next competitor (Darden) selling 700,000. Within HBP (Harvard Business Publishing), ongoing digital and eLearning product sales were up 11% year-over-year and international revenues grew 13%, making up 34% total HBP revenues. Our Executive Education program accounts for 26% of revenues. With 10,000 executives enrolling in $14,000-a-week courses each year, ExecEd sees much greater profits than the MBA program (18%). HBS could not exist without the publishing and ExecEd businesses, and these businesses would have no validity without HBS brand ambassadors (us) entering the workplace every year.
Appendix B: Other HBS angles not explored
- Ratings falling if we cannot keep up with digital consumer (student) demand and expectations:
- other MBA programs offering time-flexible online courses
- students will demand digital tool integration in the classroom (to feel better prepared to leverage technology effectively in the workplace, and because they will grow up with, and remain reliant upon, them more and more)
- demand of non-case-based curriculum augmentation (more efficient way of learning business-necessary technical material such as finance, accounting and statistics)
- Inability to turn a profit and support students and faculty operations in a digital world
- online is easily scalable and comes with much lower variable costs, and in some cases, lower fixed costs as well
- lack of sustainability of current mass-printing practices
Sources cited throughout:
- “Assessing the Digital Transformation of Business Schools” by Courtney Hunt, January 2015: http://www.socialmediatoday.com/content/assessing-digital-transformation-business-schools
- “Case teaching online: Harvard Business School’s first year” by Emma Simmons, October 2016: http://www.thecasecentre.org/educators/casemethod/resources/features/hbxlive
- World Economic Forum White Paper Digital Transformation of Industries: In collaboration with Accenture, Digital Enterprise, January 2016.
- The future of higher education: How technology will shape learning. A report from the Economist Intelligence Unit, sponsored by the New Media Consortium, 2008.
- “Why the education sector is ripe for digital disruption” by Rob Buckley, January 2015: http://www.i-cio.com/management/insight/item/why-education-sector-is-ripe-for-digital-disruption
- “Is the MBA Case Method Passé?” by Ronald Yeaple, July 2012: http://www.forbes.com/sites/ronaldyeaple/2012/07/09/is-the-mba-case-method-passe/#d22b33c31459
- “Business School, Disrupted” by Jerry Useem, May 2014: http://www.nytimes.com/2014/06/01/business/business-school-disrupted.html
- HBS Annual Report 2014: http://www.hbs.edu/about/annualreport/2014/Documents/HBS-Annual-2014.pdf
- “What Business Schools Don’t Get About MOOCs” by Pankaj Ghemawat, August 2014: https://hbr.org/2014/08/what-business-schools-dont-get-about-moocs
- “The Industries That Are Being Disrupted the Most by Digital” by Rhys Grossman, March 2016: https://hbr.org/2016/03/the-industries-that-are-being-disrupted-the-most-by-digital
- “Harvard Business School Has the Market Cornered on Case Studies” by Francesca Levy, April 2015: http://www.bloomberg.com/news/articles/2015-04-09/harvard-s-case-study-monopoly
- “I’m taking a 5-year leave of absence from Harvard Business School — here’s what I hope changes before I get back” by Ellen Chisa, December 2015: http://www.businessinsider.com/why-im-taking-a-leave-from-harvard-business-school-2015-12
- “Is Small Beautiful? Online education looks beyond the MOOC” By Stephanie Garlock, August 2015: http://harvardmagazine.com/2015/07/is-small-beautiful
- “Harvard Measures Its MOOCs” by Justin Reich, June 2014: http://harvardmagazine.com/2014/05/harvard-measures-its-moocs
- “Two Years at HBS: A Harvard Business School MBA Student’s Blog”: http://2y-hbs.com/hbs-as-a-business/
Student comments on 100 Paper Cases … 2 Online Challenges: HBS in the Digital Age?
Very interesting post. I appreciate how you covered the digital transformation of the classroom. Additional evidence of the digital transformation of HBS is on the case preparation side with the use of multimedia cases such as Threadless in TOM, Bridgewater in LEAD, and Siemens in FRC. I wonder how the learning objectives and outcomes are enhanced or weakened with these modules, and if there will be a shift in the future to increasing the proportion of digital cases. An upside to the multimedia case is that the videos and interviews can provide considerably more context than the written case.
Very interesting Post. HBS could also go digital just with a policy change of allowing tablets in the MBA classroom. Cases are already distributed digitally, and many students already have tablets. With one email to students, faculty, and staff, HBS could halt the distribution of hard-copy cases and change behavior almost overnight. Students could then bring the cases on tablets to class. Computers could still be banned as they may be more distracting given that they sit up conspicuously on the tabletop. Also, if HBS is worried about internet use during class, they could just block internet and service provider signals in the classrooms (which is likely doable technologically for HBS).
Thanks, Angelo. Interesting topic to raise as many of us made a decision to attend business school while our equally talented colleagues (if not more) made the decision not to.
I continue to view the most existential threat to HBS’ core business as one of the declining necessity in business for a traditional, credentialized education. In the last few years, on a largely anecdotal basis, I hear more often that business school is viewed as a ‘two-year break’ with learning served up as a nice side benefit as opposed to a truly enriching or critical learning experience. Certainly, there will continue to be many who disagree with this (many of us, as an example), but the diminishing value of an MBA in the corporate world (versus 2 years spent ‘doing’) is certainly worrying. If it does not erode the quantity of students, it may certainly erode the average quality of the student population. In most investing arenas, as an example, getting an MBA can be viewed as a hindrance relative to directly recruiting for the next job.
As far as the digital threat, I think one of the core value propositions (as outlined above) is a credentializing one as opposed to content-based, as the information learned in our MBA is already largely democratized (as you note: most of our cases are available for purchase already). The selectivity of admissions into the Harvard MBA I would argue is at least as important a signal to prospective employers as our learning at HBS (as evidenced by the non-disclosure around grading). Therefore, though MOOCs aim to further spread the HBS brand and class experience around the world, I doubt they will erode the HBS core business as much as other threats on the horizon. I agree with your next steps; I especially think digital ExecEd deployed globally makes good business sense.
From your post, I worry greatly that the Business School derives the majority of its revenues from two sources (case production and Exed Ed) that are ancillary to the core offering of the school: the MBA program. The greater investment in digital learning that you have outlined further cheapens the MBA program from both a financial perspective and an incentivization perspective. While you have noted that the success of these revenue generators ultimately depends on the success of the MBA program (a phenomenon which prevents too much investment from being divested from the latter), do you worry that further investment in the ExecEd program, and digitization in general, will begin to devalue the traditional MBA model and divert future investment away from it?
This is an important topic, so thanks for the post. To push the conversation even further, I would argue that if people view an HBS education as a “luxury good”, which has value beyond just the curriculum itself (manifested in ways like the network you build and get access to), then HBS may not necessarily need to adapt its model to conform with what its competitors are doing – because what HBS is offering is a fundamentally different good. Additionally, pn and paper pedagogy has worked well for a long time, and it’s not clear to me that integrating the classroom experience digitally will contribute more to students’ learning.
I would suggest that HBS consider offering some mandatory RC teaching around basic computer science, because those are skills managers will definitely need to know going forward.
Great minds think alike 🙂 Recommend you also read my post on how HBX is looking to disrupt and transform the digital education landscape. https://d3.harvard.edu/platform-rctom/submission/hbx-disrupting-the-business-education-delivery-model/
I strongly believe that HBS has the power to call the shots – they just need to decide when and to what extend it would like to scale up these digital offerings to change the market dynamics for top quality business education. While I do think that as things stand, these initiatives are only meant to complement and not replace the more traditional full time MBA programs That said, I strongly want these initiatives to succeed and enable those bright minds with limited resources to have access to top quality educational offerings.
On a separate note with regard to your topic headline – I do fully agree that HBS Academics needs to work harder at sustainability and take a hard call to stop distributing paper cases and encourage students to go digital. I would imagine this would not only lower the Program Support fees but also go a long way toward encouraging students to develop a more sustainability focused mindset.
Excellent post, Angelo. I really enjoyed learning more about the breakdown of HBS revenues and HBS’s recent digital innovations. That being said, I would argue that digital education and MOOCs have a long way to go before being considered anywhere close to on equal footing with traditional “brick and mortar” education programs. Employers simply still do not weight them equally when evaluating potential candidates (1). At best, online education is viewed as an addition to, rather than a supplement for, traditional education programs. One potential way to overcome this discrepancy would be to pair online education programs with “in-house” internship or other practical learning opportunities within real companies.
Interesting article, Angelo. I think one major risk here is for HBS to cannibalize its most profitable revenue streams via doubling down on digital. The cannibalization impact has to be compared with the true benefit of investing in digital. For example, companies that are today leading the MOOC revolution have shown sub-optimal results compared to the hyped up expectations that online education is the future. So, your suggesting HBS to invest in a risky bet that will not necessarily salvage the school from being bankrupt. Last winter, Thrun (from Udacity) himself expressed some doubts. “We were on the front pages of newspapers and magazines, and at the same time, I was realizing, we don’t educate people as others wished, or as I wished,” 
Good read. One thing not discussed is how the curriculum of the primary HBS MBA program is (or is not) adapting to increased digitization that threatens the traditional teaching model and used for everything from written communication to video conferencing to online courses, as your post suggests. While we have some multi-media cases, these are relatively simple attempts to increase the technological aspects of the curriculum. It’s been stated that HBS does not provide much in the way of technical training, particularly for those interested in roles in technology, and ambitious students have gotten around this by having the student run clubs bring in training. I’d think that as the world becomes more reliant on digital technology, HBS would be forced to increase its training around these areas. Hopefully this does not remain a blind spot for the school moving forward.
Angelo, thank you for taking on HBS and its ability to evolve with the digitization of education. I agree that HBS should consider selling the SPOC platform to other schools. As a personal story, I took HBX CORe in the summer of 2015 while a few of my co-workers were doing UNC’s online MBA program. One of the biggest differences I found, in terms of student experience, was participation. HBX has really figured out how to translate what it does well in the HBS classroom to the digital space. Using things like cold calls and grading the content/quality of posts ensure that the fragile digital learning space is not eroded by low quality or lack of participation. I think this is a constant struggle for online learning platforms and one that Harvard should distribute out to other learning institutions.
Angelo – Thanks for this post. A few other comments touched on this, but as a consumer of the HBS MBA program (as we all are), I feel the value of our degree is being greatly diluted and eroded by the behavior of Harvard to prioritize profits through churning students through its Executive Education and CORe programs. Given the $200k cost of our education (not including the opportunity cost of likely $100-$400k for many of us), I think it is very unfortunate that somehow when +10,000 “students” per year are being churned through these other Exec. Ed. programs they are receiving the same Harvard degrees and alumni status as those of us who are enrolled full-time for 2yrs in the HBS MBA program. Currently, 15 Exec. Ed. programs grant full alumni status . While these programs may make the administration smile with the incremental income they are generating for the school, I would really like to know how the administration thinks we should feel as those who went through the agonizing process of GMATs, applications, tuition costs, opportunity costs and 2yrs of full time education, just to come out the other end of this process only to be walking by Baker library and have someone introduce themselves as a HBS alum (and smugly tell me how HBS and the world of business works) because they just finished up the Exec. Ed. program. I for one can tell you that it doesn’t make me feel very good…
This is a really interesting one. I think this is an environment where machines will not be able to catch up with humans for quite some period of time. I think the biggest excitement comes out of personal interaction within the section, and being able to see everyone’s expressions and body language. Sections form a more intimate relationship and culture through interactions in between and outside classes. While this is an interesting approach and might be our future, I really hope the technology in the classrooms doesn’t go beyond a Watson coming in to decide who to call on. It might be a model that will thrive when it comes to inviting more international students for part-time courses.
Very interesting topic. It is interesting to frame HBS as a business rather than just a business school. I agree that it is important to be a first mover in virtual classrooms in order to continue generating revenues outside of the traditional MBA program. I don’t think that the situation is as dire as Professor Christensen laid out, at least not in HBS’s case specifically. I think trust and personal connections are still tremendously valuable in business and this feature of HBS is almost impossible to digitize. So while there may be value in tangential products, I think the in person case method will continue to attract talented individuals.
Interesting post Angelo! I agree that it will be necessary for Harvard Business School to get ready for teaching in the digital age, however, I’m still not convinced that it will pose a threat to the traditional MBA program. Having done the HBX course, I must say that although it will still miles ahead of most online courses I have done so far, it still isn’t compelling enough for me to choose it over a residential program. In my opinion, the classes where I have learnt the most have been ones that had intense debate, where the class was pushed to challenge and defend opinions. It’s hard enough to do that in a classroom when people don’t know each other – do you think it’s likely that the required level of comfort is reached in a virtual space?
When I came to HBS, one of my biggest surprises was not having internet access during classes. I must honestly say that I didn’t know the details of how the case method worked, so I thought of the system as really old fashioned and traditional.
Even though I’ve come to understand the main point of this: to have students engaged at maximum capacity, I still think that an intermediate solution can be found. There are times where this is most evident: having a printout from an excel spreadsheet is completely different fom having the real excel open. I see the future of education as a balanced mix of technology and paper. Technology would have to be a closed system (probably proprietary). I honestly don’t think that our current paper only system can last for much longer
Online courses tend to have a lower propensity of attendance than in-person cases. Only 50% of the people who sign up for a MOOC class actually show up to the first case, and about 5% actually complete the class http://er.educause.edu/articles/2013/6/retention-and-intention-in-massive-open-online-courses-in-depth
While payment for the class tends to increase attendance and engagement it does not yet achieve the levels of in-person classes. For this new technology to be actually successful there needs to be some change in they way they are administered to actually pose a threat to in-person classes.
Online learning is an effective substitute for classroom learning only if there is implicit trust between participants(1). The importance of building trust in an online environment should not be underestimated.
While MOOCs have certainly been the subject of much hype and appear to be successful in terms of enrollment and signups, research shows that course completion rates are extremely low . Though I do think digital should and will be a major force in higher education, I believe there needs to be more clarity on which metrics we should use to measure the success of digital education programs. Clearly defining those will allow us to know what is working and what needs to be optimized. I wonder, for example, how students would rate the HBX experience as opposed to the traditional MBA?
Combining the themes from the last two prompts, in a digital era in which we face ongoing threats from climate change, do you think HBS should default to printing out all our RC cases for us and filling up our mailboxes, given the negative environmental impact of wasting paper?
By cutting out the costs of default RC case printing, HBS could increase profitability and then reinvest those profits in increasing the digital offerings of the school.