by Gabriele Troilo, Associate Dean Open Market and New Business Division, SDA Bocconi School of Management
VARIETY AND PERSONALIZATION OF CONTENT ARE WINNERS IN THE GLOBAL MARKET FOR EXECUTIVE EDUCATION
The last twenty years have witnessed a radical transformation of all markets for the production and distribution of content. The digitization of content first radically changed the record industry and book publishing, then it completely transformed newspaper publishing and movie distribution, as well as the video games and advertising industries, spearheading a disintermediation process of the producer-consumer relation. This process has been guided by new market players: the corporations controlling platforms where producers and consumers interact. These have become the new rulers of the content industry, bringing innovation not only to products and services, but especially to the business models being adopted. It is no coincidence that today the two buzzwords are platform competition and business model innovation.
Compared to the industries mentioned above, the managerial education sector does not seem to have been substantially affected by digital transformation, although the early signs are there that such a time has arrived. In a very similar way to other content areas, in fact, the two drivers of business transformation also seem to be at work in business education, with an impressive impact and speed.
The success of e-learning platforms like Coursera, EDX or Udacity shows that even academic training can be effectively disintermediated. Coursera is a telltale case. Founded in 2012 by Stanford University faculty members, today it connects more than 25 million users worldwide to its platform of more than 2000 courses on the most disparate subjects, offered by about 150 universities and business schools of international standing (including Bocconi). The evolution of Coursera’s business model is also interesting. Born to provide only MOOCs (Massive Open Online Courses, which are essentially free), today it offers many paid courses with a model that includes paying for a monthly subscription or paying for a single course or specialization, with prices ranging from $15,000 to $25,000 dollars.
Coursera is also the example of a new entrant in the higher education industry, which has a competitive logic that is completely different from incumbents, i.e. universities and business schools. Also other, correlated market actors have entered the field of managerial training. For example, LinkedIn has started offering online courses. And McKinsey is doing the same, and so are specialized consulting companies such as Ideo.
In short, it is clear that the radical transformation caused by digital technologies has also come to the training and education sector, with a speed similar to that experienced by other content industries. How long it will take and what impact it will have is difficult to say, but what is certain by looking at previous experience from other content markets is that you cannot passively let the transformation happen. If others decide the rules of the game, your business survival is at stake.
Although one should not accept the rules of the game established by other players, there is a lot to be learned from them. There are two corporate actors which, from my point of view, can provide stimulating examples on the kind of transformation processes that need to be activated in executive education, and these are Netflix and Spotify. Both are revealing examples of two critical factors that determine success in content sectors: variety and personalization.
Both Netflix and Spotify are large repositories of content, which consumers can enjoy according to their needs and their tastes. On Netflix and Spotify you can find movies and music for all tastes, which you can compose in a variety of combinations according to your needs (and moods). Universities, and even more business schools, should take Netflix and Spotify as models.
It could be argued that business schools already offer diversified portfolios of courses addressed to the needs of populations at various stages of their formative careers. However, if you think about it, the format offered is very standard: a course delivered in a classroom where almost everything is predefined by either the instructor or the organization: contents, duration, methods, types and times of learning assessment and a lot more, according to a very rigid structure. Variety implies not only (and not so much, I would say) variety of content, but of formats through which these contents are conveyed and comprehended. Furthermore, customization means putting learners at the center, delegating to them a part of the decisions on how to compose the education package and the learning experience, and even leaving to them the modalities of student evaluation. Conceptualizing training in this way implies a radical rethinking of the role of academics and higher education institutions that are producers of educational content. Professors will be asked to be designers of training experiences, supported by new players and experts in teaching technologies, rather than academic performers, which is traditionally what they had to be. For their part, institutions will have increasingly think of themselves as creative organizations that produce content and convey it through typical digital formats and channels. This is going to be a difficult but exciting transition phase, full of challenges, but also of opportunities, for those who want to seize them.