Before Harvard Business School launched its digital learning initiative four-and-one-half years ago, the school looked inside its ranks for the ideal professor to head up the effort as faculty chair. It turned to one of its most popular strategy professors, Bharat N. Anand.
After all, he had been studying the impact of technology on old media companies for years, having authored numerous business school cases on the topic as well as a newly published book, The Content Trap: The Strategist’s Guide to Digital Change. If higher education was about to experience the digital disruption that had already roiled the media industry, who better to head up the academic side of the school’s digital learning efforts?
But Anand did not merely lead the academic efforts, he became one of the very first HBS profs to enter the virtual classroom, creating and teaching one of the first online classes offered by Harvard Business School, Economics for Managers. That course was one of a trio of offerings that formed the school’s first online program in. business basics called CORe for Credential of Readiness.
NEARLY 40,000 STUDENTS HAVE NOW TAKEN ONLINE COURSES FROM HBS
Of the nearly 40,000 students who have taken online courses from Harvard business School, slightly more than half of them have done the very first CORe program that launched in June of 2014 with a cohort of more than 600 students. Only this week, the school rebranded its online initiative, adopting the brand “Harvard Business School Online” to replace the initial choice which has lasted until now, HBX (see Why Business Schools Should Worry About This New Harvard Business School Study).
In this wide-ranging interview with Poets&Quants Founder & Editor-In-Chief John A. Byrne, Anand reveals some of the earliest thinking at HBS about the online space, the most important lessons the school has learned, and has its digital learning initiative has evolved. The interview, on the campus of the Harvard Business School in Boston, occurred at the annual client conference of C-Change Media in the spring of 2017.
At this point, HBS has expanded its online course catalog to a dozen options that range from a three-week-long course on Sustainable Business Strategy costing $950 to an eight-week dive on Scaling Ventures with a price tag of $4,500.
The Henry R. Byers Professor of Business Administration and head of Strategy at Harvard Business School, he has been the faculty chair of HBX and Harvard Business School Online, the rebranded new identify for the school’s long distance learning offerings, since September of 2013. Anand has a BA in Economics from Harvard and a PhD from Princeton.
John A. Byrne: So, it was January of 2013 and Harvard Business School had decided on a proprietary software platform to deliver online learning. Why?
Bharat N. Anand: Just a little bit of context: Harvard and MIT had gotten together about a year before that. It was important for every school to make a decision about what to do with online education
First, like, most faculty everywhere, we weren’t sure what this trend was and where it was going. It was also clear that besides universities, the space was crowded. So why should we enter and how can we differentiate ourselves? Very quickly I think we realized that it’s not just going to be ideas and content. It’s got to be something about the pedagogy at Harvard Business School. The architecture of these classrooms and case-method teaching really are in the DNA of HBS, and now HBX.
Byrne: And there were two principles: action learning and case study.
Anand: There were three, actually, which I’ll come to. So, it was gonna be something about the pedagogy, not just content. We looked at a lot of platforms, and very few allowed us to leverage case-method learning in a digital format.
We were very reductionist. We said, “Look, if we try to mimic what happens in the classroom, we will fail.” But we boiled it down to three principles. The first was using real-world problem-solving. Every case starts with someone trying to figure out what to do. Then inductively you back it in theory.
The second principal was interactive learning. Everyone’s all-in in these classrooms. Everyone’s participating. It’s not just lecture. And the third was social learning, which is peer-to-peer.
We realized that there’s no platform out there that … allows us to do what we want, and that’s when we started to build our own.
Byrne: Which is a pretty big and bold move, requiring a good amount of investment.
Anand: If we had known how much work it is to create these platforms, I’m not sure we would have done it. We had three staff and three faculty members. We got together to create these courses on this platform. We thought of it as a side project, not as the 24/7 operation it was. All of us had full-time teaching and research responsibilities as well.
Byrne: Often in the Academy, faculty tend to be skeptical, particularly initially with an online learning initiative. Were you a skeptic or a believer?
Anand: I’d been studying digital change for 20 years, focusing on the media entertainment space. So, the possibilities of technology were exciting to me. But you’re right. Most of the faculty was pretty skeptical. Many platforms in online education, then and now, were going after “the metric of reach,” or scaling up what you can deliver; rather than teaching 100 people you can teach 100,000.
We felt that reach was not the right metric for us, that we have to figure out how to engage people online. Engagement was our main metric. I think the pursuit of reach is the Achilles’ heel of most digital startups. Business models that ended up being viable often rely on deeply engaged viewers, readers, listeners, customers.
Byrne: That flies in the face of the old theory of first-mover advantage, where you’re willing to rack up loss after loss to gain market share.
Anand: First-mover advantage helps when you’re in a market with very strong network effects. If you’re the first social network, or the first people in the marketplace, it’s fantastic. You get scale, and it’s hard for someone to compete.
When we look at online learning, there’s no demand-side advantage to scale. It doesn’t make a student sticky to one platform. He could take one course on Coursera, another on Udacity and a third on edX. But I’m not going to switch from Facebook to Google Plus. (In fact, no one did.) Because all my friends are on Facebook. I think first-move advantage helps when you have scale in the form of a community or network.
Byrne: And having studied the adaption of technology by the media industry, you knew the power of technology. But you also knew its disruptive nature. In my last three years at Fast Company and Businesseek, I had to reduce expenses every year and that often involved losing staff. You also saw other schools take completely different paths. For example Wharton is probably the most aggressive pursuer of MOOCs. They decided to give content away for free, just as old media did. Early on, you decided to avoid that. How did that come about?
Anand: The decision started with, figuring out how to engage learners online with case-method-type pedagogy. This is pretty fundamental. Business models arise once you figure out how to create value for customers. Right? They don’t precede that conversation.
Building this platform turned out to be difficult and costly. Now you’ve got to figure out how to recover this cost. That conversation didn’t start with a complex analysis. Instead it was literally: Do we charge $50? $500? $1,500? We were trying to create a sustainable enterprise.
Someone suggested that we could charge about $1,500 but also give financial aid to students, allowing us to balance pricing with access. We were looking at all kinds of models: residential bootcamps, pre-MBA bootcamps for board, like Tuck, which I think is somewhere in the $7,200 range. We looked at China, where accounting courses were priced at $100, $200, and you have thousands of people taking them. We settled on $1500 but are still trying to figure out the price.