A few months ago, I had the chance to present a report on how value in business education is being redefined. I have decided to “open-source” it: I will deliver it down to your inbox in three different chapters, as a Summer read for you.
This is the third delivery. Enjoy!
Macro trend #3. Ultimately, the business model of business school is shifting
Incumbents keep doing “business as usual” and new players keep capturing new dimensions of value. Incumbents might have to scale up their operations to increasingly more sophisticated and “niched” customers and students, increasingly focusing on the needs of specific industries like consulting and finance (MBAs) and top corporate training clients (ExecEd). However, new players, as they follow an upscale trajectory, would end up offering an attractive value even for these sophisticated segments of business.
On top of this, the progressive modularization/unbundling of business education, as a response of business schools to market demand, has increased the risk and likelihood of new players to appropriate new areas of value, which increases uncertainty and strategic misdirection for incumbents.
Incumbents, heavily invested in their traditional brands, acknowledge the complexity of new value drivers and choose to play a role of orchestrator of a complex ecosystem with multiple players. This could be projected in a number of ways:
- 1. Focusing on being facilitators of “thinking skills” (integrative thinking, critical thinking, design thinking, strategic thinking, etc.…), that is, those that “run” our operating system as managers or leaders, collaborating with new players who offer “fast skills”. For instance, this might imply shortening the duration of the residential experience of a MBA program and collaborating with other providers of “101” content and fast skills, as Roger Martin, former Dean of the Rotman School provocatively proposed a couple of months ago.
- General Assembly has developed its “Internship Connector” program for Universities and Business Schools, a 10-week program that consists of a 2-week bootcamp to learn “fast skills” in GA’s campus in San Francisco or London, plus an 8-week internship to apply those skills.
- 2. Facilitating “transferability mechanisms” along the lifelong pathway of learning. Learning is a lifelong process: degrees or credentials can’t remain as separate silos but as an interconnected continuum. Also, business schools can’t embrace all aspects of value creation in a complex ecosystem with multiple players. Business schools will have to figure out how to create transferability mechanisms along this continuum and across multiple players, possibly considering “freemium” business models.
- For instance, Arizona State University has partnered with EdX to offer the Global Freshman Academy, an online entire year of college through the EdX platform. Students pay upon completion and after this can enroll/transfer to the 2nd year of college at ASU. Also, MIT has created Micromasters, an initiative that transfers MOOC completion “credits” to MIT residential masters, starting last year with the “Global Supply Chain Master”.
- 3. Engaging alumni with a more proactive role when it comes to generation of relevant knowledge. While exponential organizations leverage their “non-assets” (Uber doesn’t own cars; Airbnb doesn’t own facilities), business schools haven’t leveraged so far the power of their alumni networks when it comes to their knowledge potential: alumni are potential “faculty on demand”. In this vein, Reid Hoffman, CEO of Linkedin, advocates for “social learning” as the next revolution. Linkedin’s $1.5 billion acquisition of learning platform Lynda responds to this vision.
- For instance, The Economist Group recently launched ly, an expert platform where learning happens through peer-to-peer interactions. It embraces the truly nature of platforms, as users can become both “teachers” and “students” altogether.
- 4. Embracing ecosystems, outbound and inbound. The business school system should transition from product to platform in this scenario. Collaboration with multiple (new) players will be necessary and business schools should adopt a role as an orchestrator. But business schools themselves should transform into a lively platform where corporate partners can crowdsource ideas and iterate their new products or services. As curricula turn out to be more experiential and active learning becomes a new normal, schools should leverage the ability of students to create meaningful content for companies as a value driver.