Delivering the Business School Experience: The Future is Here

Kellogg recently convened a conversation with Chip Paucek, the CEO and co-founder of 2U, a leading educational technology company, and several deans from traditional business schools. We explored the challenges and opportunities traditional business schools face with the explosion of online learning models, ranging from synchronous online learning for certificates to MBA degree programs delivered entirely online. Excerpts from our discussion follow below:

Q. You have said before that it can be helpful to talk about digital education as having developed in “waves.” Why is that, and where are we now?

Chip Paucek: First the terminology has changed. We’ve recently started to use the word digital education instead of online education. This is more accurate and distances from the stigma that surrounds online education and the first waves of online development. The first wave of online was about the for-profit space. And the second wave was the massive open online courses. The third wave where we are now is [top-ranked] schools offering real credentials online or in a hybrid fashion, including both degree and non-degree.

Q. If you look at the billions of dollars that have been invested in educational technology companies, there are really only two that stand out as successful – 2U and Lynda.com. The thing they both have in common is that they partner with institutions, rather than trying to replace the institutions themselves. Why is that the case?

Chip Paucek: There is a power to the university institutions. Most of these schools have been around for a couple hundred years, much longer than most companies. Additionally, people build relationships with universities and the brand of the university. There is a power to take this established brand and bring it to an online environment.

Q. In a hybridized approach to credentialing, how can institutions extend their brands using digital education, while still creating value for on-campus students and faculty?

Chip Paucek: Hybrid is the future, but the physical still matters. Schools prove it everyday, in the communities of people who are learning and what happens when they come out. People just take those outcomes and the in-person relationships for granted.

An example of hybrid is 2U’s recent announcement on our new Harvard Business Analytics program. It is a hybrid experience including partnership from multiple schools at Harvard, our online platform, HBX and on-campus through residencies.

Even when a program is online it needs to create relationships – a key reason for 2U’s success is the intimate experience. The 2U ratio is one [faculty member] to twelve [students]. All of 2U’s programs feature weekly live classes with faculty from the schools. It’s a critical component of what drives the relationship, drives the brand affiliation, and drives retention.

What we’ve also learned is that students of 2U programs where the majority of the program is remote appreciate and embrace the on-campus/ immersion portions reinforcing the value of the hybrid approach.

Q. What is one piece of strategic advice you can offer about how to think about innovation opportunities in digital education?

Chip Paucek: Schools have to be thinking about going online with your whole portfolio. Even at the top of the stack, schools need to take the risk. The value proposition is strong.

This is what students want, and you expand the pie by doing it. It’s not the future anymore. It’s now.

My thoughts and insights:

My conversation with Chip was thought provoking and insightful. I wanted to share a couple of my key takeaways from the chat.

1.    Third wave of online education – shift in language: Chip outlined the stages of online learning. We are now in the third wave of online learning. With this wave online shifts to a new and more accurate vocabulary -- Digital. I think this is very important as there are choices of synchronous, asynchronous, remote etc., by using the language digital as the umbrella it is inclusive of all the permutations outside of the traditional residential model.

2.    History of Traditional Education: We are in the midst of a rapidly moving environment with disruption to business models. However, it is critical to remember that traditional universities have history, reputation and brands. Because of the enduring power of our brands, the likely end state answer will be a hybrid one – mix of residential/remote and mix of synchronous/asynchronous.

3.    Power of in-person: With the growth of hybrid, most programs have some immersion or in-person component. Additionally, when a student is primarily remote – they appreciate the in-person and on-campus opportunities even more.

4.    Different digital models at different price points: We did not discuss this point on the call, however I believe it is important. The model of 2U is a high quality, largely live experience that appropriately has a price point that looks like the on-campus model. There are other models that are at lower price points that can work as well - they are just different. There is not a “right answer” for all, it is important that we continue to learn from one another as we continue to experiment. We all have the same general mission to educate and equip our students to do what they want to do out in the world. 

I think this is a very important point in time for all of us and again I would encourage ongoing collaboration across the sector.