Quality Of UNC Kenan-Flagler Lures MBAs From On-Site To Online

First published forbes.com 4/2016. The University of North Carolina, Chapel Hill, says its online MBA is like its regular MBA “without cheapening quality or compromising rigor.” To test this claim and see where state-of-the-art online business education is up to, I rendezvous with 11 students logged into a Finance Statement Analysis class Saturday morning 10 a.m. EDT with professor Ashraf Jaffer.

The multi-party video-live online forum is by now almost old-hat for business education, as it is for company meetings and job interviews, but the usual webinar experience is mired in clunk—we seem to spend more time figuring out the hand-raise button or un-muting the mic or how to flip to the slide deck than doing what we’re actually there to do.

Jaffer has logged in from Tsinghau University, China, and the students are of course similarly dispersed, and the first thing I find in this class is if you have a question you don’t click the portal’s “raise-hand” icon. You just get your mit in front of your camera in such a way as Jaffer notices, and thus with a delightful minimum of ceremony we rollick into the thickets of operating cost inputs.

In class with MBA@UNC students and Professor Ashraf Jaffer, top left. Picture: the author.

In class with MBA@UNC students and Professor Ashraf Jaffer, top left. Picture: the author.

My own MBA finance is too long-ago forgotten for me to have any inkling of what’s really going down, but it does appear that the students are getting what they need.

To date, the business school and wider university industry has mostly approached online learning as a scale opportunity—a way to reach a greater audience with a limited product at a lower price. Elearning means 1000x students may be served the same product at the same time with a lower-cost, lower-service offering in what is, ironically, the ultimate industrial model.

The main debates have been about choosing which programs “work” online, where to set (global) price points, and how to capture tuition fees—whether at point of registration or point of qualification.

Significantly, the Kenan-Flagler Business School online MBA (MBA@UNC) goes in the other direction. It makes no bid for scale, setting virtual class size at 15 max, and equally makes no concession on price. At $99,500 the MBA@UNC very close to the price point of its regular MBA.

MBA@UNC Director Dan Bursch says the program is guided by a single idea: “We want to match the campus experience in virtual environment, replicating the quality and intensity of the MBA experience.”

He is also not cherry-picking for online scale. The aim is everything in the residential program is reproduced in the online offering, particularly building out the elective portfolio at the rate of four to six new courses a year so that online students are similarly served in terms of choice of concentration.

“We’re trying to build a full set of courses and electives, as a normal MBA would have,” says Bursch.

The path Kenan-Flagler took in 2010 towards achieving this was to outsource all non-academic functions to a Maryland-based Nasdaq-listed firm, 2U (TWOU).

2U built the Learning Management System–the course portal–and runs the Adobe (ADBE) Connect classroom as part of its turn-key solution that includes marketing, student placements, faculty development, and administrative services.

Describing the relationship between UNC and 2U, Bursch says, “We are the Cadillac; they are the Michelin tires we run on.”

2U CEO Chip Paucek describes his company mission as “redeeming the lack of equality to the campus” that online students have always felt, and making the online student a full member of the university community.

As the 2U site says, the prospective online student may think: “I’ll be on my own, I won’t get to know or bond with my classmates, my degree won’t be legitimate, the professors are not the core faculty, the instructors don’t care, there’s no one there to help me…”

To the success of overturning these preconceptions, at least at UNC, Paucek claims the MBA@UNC students reliably refer to themselves as “Tar Heels.”

He should know. He is himself a currently a student there. As a CEO of a listed company, Paucek had many top-tier options in the MBA admissions world—but chose his own product. “Eating your own dog food” is indeed persuasive.

Like all MBA@UNC students, the classes he takes are of two types: asynchronous pre-recorded lectures to watch in your own time, and synchronous real-time class meetings. This is the so-called “flipped classroom”—the lecture is experienced solo and in-class time with the professor is spent interactively.

UNC faculty create the content, and lectures are recorded directly for camera (not recording a live class) and edited by the 2U production team. These online lectures are much as one might experience on Coursera, or Harvard’s HBX, or similar.

The distinction comes in the interactive event, where learners in small virtual groups get the attention and input time that online options don’t usually provide.

Paucek, CEO-turned-student, is quick to point out the pain factor of small classes: “You have to come prepared! It’s plain if you’re absent, plain if you haven’t done the reading or watched the lecture, and plain if you don’t participate. There is no back seat, nowhere to hide in a class of 15,” he says.

But there is benefit accordingly. Kenan-Flagler and 2U have collated data to show student graduation rates and job-placement rates are at comparable levels to the real-world program.

The Kenan-Flagler MBA is ranked in the top-20 in the U.S. (top-40 globally). The online MBA@UNC ranks in top 3 among online competitors, and is currently 1 in the Forbes list.

The proof is in the student-subscription pudding: in 2011 MBA@UNC student enrollment stood at 19; now it is 729.

Exponential enrollment is a particular operational headache for MBA@UNC because, to hit its quality metric, it has to provide for these students via classes strictly capped at 15. In January this year 112 new students all needed to go through Analytical Tools. The 15-person cap meant setting up nine different sections (each meeting at different times so students can choose which best suits them) says Bursch.

Professor Time

This means nine times the amount of professor time. And is also creates a quality management challenge, requiring a coordinating professor to ensure consistency across delivery iterations. Kenan-Flagler has had to get good at a coordinated team-teaching model.

It is this extra cost of faculty time and coordination, across a full set of classes and growing number of electives, that pushes the MBA@UNC tuition up to a level similar to the regular MBA, says Bursch.

The other factor pushing price is of course the 2U profit factor. 2U claims a portion of tuition revenue that Paucek says “is more than 50%” but he’s quick to point out that his company provides everything in the offering other than strictly academic services.

In a typical relationship, “the university provides the academic content and handles admissions choices, we do the rest,” says Paucek.

This means, beyond the technology platform, 2U does regulatory compliance, and handles program marketing, particularly to global audience. It also provides a faculty training and engagement team that prepares its university partner faculty make the adaptations necessary to teach in the online environment.

Critically, 2U provides these services as an at-risk investment—effectively putting in the venture capital required to launch a university online, which the university may be too risk-averse or too bound by budget or bureaucracy to provide itself.

Net Negative Cash

According to Paucek, 2U spends $5-10m true net negative cash in setting up a program, which it only recoups by year-4 on average. Which is why 2U demands both a high clawback rate and long (10+ year) exclusive contracts. The contract with University of North Carolina was just recently extended to 2030.

Based in Landover, MD, the company has about 1,000 employees, and just passed $1bn revenue earned for university partners. Financial results reported on February 25, 2016 put the company’s 2015 revenue at $150.2m, up from $110.2m in 2014, a year-on-year increase of 36%.

As of year-end 2015, 2U had contracts with 14 universities including Berkeley, Georgetown, Yale, Northwestern, running a total of 29 programs for them. It recently announced a partnership with Syracuse Maxwell to create an online version of its Executive MPA. 2U also set up the MBA@Syracuse which opened January 2015.

Says Paucek: “Over time, particularly in executive education, this is going to become the model. It’s simply way too convenient, and you can have as high quality of experience as on campus. So you’re not giving up quality but radically your improving convenience factor.”

For 2U the business model relies on making graduate and executive learning of high-enough quality to lure students from on-site to online, and in the process circumnavigate issues of geography, visa status, family or workplace restrictions, all of which keep would-be students out of the pool.


Factor in that Millennials already expect to learn this way, and a vast market of national and international student reluctantly choosing lower- or non-ranked MBAs (AACSB accredits 764 institutions in 52 countries, and many more are not accredited) and the size of the opportunity comes into focus.

Perhaps this explains in part why Susan Cates, until recently Kenan-Flagler’s President of Executive Development (Director of Executive Education) and Executive Director of the MBA@UNC program in March made the move to become the COO of 2U

Meanwhile, as I sit in Jaffer’s class and ponder the experience, it’s clear to me this is not the fabled “MBA experience” in total, but it is a significant revision of the learning benefit equation nonetheless.

What I vividly recall in my own MBA experience from almost a generation ago, across both INSEAD and Wharton campuses, is the absolute intensity—the 16-hour days between classes, workgroups, the library, and, yes, parties—days bookended with too many double-espressos at one end and too much cheap bordeaux at the other.

The MBA@UNC is upending the low-cost, low service reputation that online MBAs have had, but I don’t see it fostering quite the same stories, memories, friendships, at least not yet.


That said, things move fast and the straw in the wind is the hybridization of on-site and online that Kenan-Flagler is starting to see among student choice patterns.

MBA@UNC students are currently required at a three-day real-world event twice during their degree, choosing their date and location from a schedule of quarterly gathering in the U.S. and around the world. Recent locations were San Francisco, London, Shanghai, Detroit, and Budapest.

But beyond this they can and do join residential students for part of their program, for example taking a traditional study-abroad option. And, as the online program garners quality recognition, residential students are asking to take classes on it.

Through this, what is coming into focus is a user-oriented “hybrid” education offering where students choose from a portfolio of real-world and online options, making the best tradeoffs they can according to the kind of graduate or executive education experience they seek, or that their situation will allow.

Posted by admin in EdTech, Innovation, Learning

How Oxford Helps Leaders Face The Complex And Uncertain Future

First published forbes.com 4/2016. Turbulent-Uncertain-Novel-Ambiguous (TUNA) is the acronym an Oxford University Executive Education program uses instead of the more familiar VUCA—volatile, uncertain, complex, ambiguous. But either way we understand the problem: The external environment changes rapidly and unpredictably, making leaders look silly. What worked yesterday won’t work tomorrow.

As TUNA pressures warp previously steady-state industries, executives respond by trying to predict the future, grappling with early-warning signals or trying to identify market or technology trends.

The five-day Oxford Scenarios Programme (OSP) offers a different path.

“At Oxford we try really hard to try to get through the futurology that’s out there, and (instead) power people who have resources and agency to do things better,” says Dr Angela Wilkinson, who teaches the program along with Saïd School Professor Rafael Ramirez.

Scenario Planning is a method of direction-finding and strategy formation that defines itself by non-prediction.  Scenarios are integrated narratives of how the future may unfold, with always two or more in a set. This avoids the brittleness of a singularly predicted future—which the unpredictable world will surely make nonsense of.

The OSP accepts about 40 delegates and—fairly unusually for executive education—also hosts two or three organizations as real-world “proto-clients,” providing live client situations for the delegates to work on .

Dr Angela Wilkinson leads a scenario planning workshop

Dr Angela Wilkinson leads a scenario planning workshop.

In the next program, April 25-29, 2016, the proto-clients are: a University (not Oxford) trying to manage faculty field research in the new era of geo-political risk; an FMCG ice-cream company concerned millennials aren’t buying its products; and a scholarly professional body struggling with how digitalization is eroding its centralized authority and journal-based business model.

“These live cases give the program a ‘clinical-research feel,’” says Wilkinson. “We used to use some form of a generalized case, like Harvard Business School cases. But that doesn’t prepare the delegates for what they are going to encounter in their organizations.

“Live clients reflect the ambiguity of the scenario planning reality they will find themselves in, how messy and difficult it is.”

The clients present their business situation late on Monday, and are then interviewed over dinner by the assigned delegate teams. Midweek there is a check-in teleconference lasting 1-2 hours during which the teams test their evolving framework. A half-day on Friday is given to client presentation and discussion of the implications.

For executives that don’t have a spare week and approaching £6,000 (about $8,400) to spend at Oxford’s Egrove Park executive education facility in England, co-incidentally Ramirez and Wilkinson have just published a book, Strategic Reframing: The Oxford Scenario Planning Approach (Oxford University Press, 2016)  written to broaden access to the philosophy and methods of the Oxford Scenario Planning Approach (OSPA).

Strategic Reframing, OUP, 2016

Strategic Reframing, The Oxford Scenario Planning Approach. Oxford University Press, 2016

“Reframing” in the title refers to leaders’ mental frames—sometimes called mental models, or paradigms—that scenario planning targets. A key problem, arguably the key problem in successfully managing a TUNA world is “frame rigidity,” when a leader’s mental model is not wide enough or flexible enough to perceive (or to take seriously) all the alternative, plausible outcomes that matter.

Scenario planning invites multiple framings of an uncertain situation, making leaders more aware and conscious of the legacy frame they have unconsciously been using to make sense of the world.

According to Strategic Reframing: “Reframing occurs in the process of scenario planning when alternative scenarios describing future contextual environments are contrasted to reveal, test, and redefine the official future (given frame).

“By rehearsing actions with these alternative frames, new and better options for action can be identified and contribute to a re-perception of the present situation.”

Wilkinson is an alumna of renown planning office at Royal Dutch Shell and currently Head of Strategic Foresight at the OECD in Paris, where she describes her remit as “leading a project to upgrade it (strategic foresight).

“The OECD, like most organizations, is strongly oriented to ‘evidence-based policy.’ If you can’t quantify it, it can’t go in the conversation,” she says.

But if you just stick to the numbers you can end up ‘not learning’ because you just stick with the stuff you can measure as opposed to the stuff that’s important —which requires you to exercise judgment.

“Quantitative, evidence-based policy served us well in he last maybe 10 or 20 years before the financial crisis, when everybody thought everything was very steady state.

“You can manage by numbers but you can’t lead by them. Quality of judgment, of intervention, needs a more systemic understanding of why things happen, and are connected to each other.”

“The numbers matter, but so do the narratives,” says Wilkinson.

Posted by admin in Leadership, Learning

MIT, Tuck, Columbia Partner With Online Firm To Slash Cost Of Management Education

First published forbes.com 3/2016. The executive education sections of MIT Sloan, Tuck Dartmouth, and Columbia Business School have become “founding” academic institutions in partnership with a closely held Singapore startup company, creating a new structure to take their leadership development short-courses online.

Many business schools and universities worldwide are experimenting with models that allow them to expand market scope, and this is not the first online foray for any of the particular institutions, but there is a coordinated brand-first global intent here that suggests this initiative may change the future terrain of leadership learning, particularly for multinational corporations.

The Singapore company, Emeritus Institute of Management, was formed in 2014 by Ashwin Damera who achieved prominence building and selling Travelguru.

Over a series of interviews Damera explains his new opportunity: “A top-tier business education, whether at MBA or executive education level, requires a logistical and financial investment that narrows its reach to a very selective minority.”

“Emeritus is making quality b-school education accessible to the world.”

But of course the world doesn’t just want management education, it wants branded management education, with the right all-important door-opening masthead at the top of the diploma certificate. Providing this at an affordable price worldwide is Damera’s business.

Bob Halperin, Chairman of Academic Board at Emeritus and research affiliate at MIT, leads the EMERITUS Masterclass in Singapore

Bob Halperin, Chairman of Academic Board at Emeritus and research affiliate at MIT, leads a class in Singapore. Picture: Emeritus

Emeritus represents itself as “Global Ivy Education” from its brochures all the way down to the tablecloths in its Singapore classroom. (While most of the programming is online, the company has a classroom on-site at its head office to facilitate company face-to-face educational options.)

MIT not being part of the Ivy League appears to be a surmountable obstacle in the Emeritus brand campaign.

So far, Emeritus has nine courses in its stable, three from each of the three schools, covering such topics as leadership, negotiation, innovation, finance, and marketing. Each typically involves four hours of study a week for 6-8 weeks, and costs on average just US$750 per delegate.

Standard on-site executive education from elite providers comes in at about $2,500 per person per day.

The price point is possible because classes contain between 50 and 300 delegates, but Damera is quick to allay any notion that he is running Massively Open Online Course (MOOC) programs. No matter how large the student group is, it is broken up into course cohorts of less than 300, and much of the learning is designed to managed synchronously in teams of 5-7 people, he says.

Damera began in consumer banking at Citigroup, India, before an MBA at Harvard Business School. His HBS summer 2004 internship with JetBlue executive Dave Barger was an entrepreneurial experience that inspired him and fellow-student Ganesh Rengaswamy to write a business plan for what turned out to be Travelguru, an India tourism portal. Backed by Sequoia Capital, Damera grew the company to 350 employees by 2009, and sold it to Travelocity.

This sale has allowed him to fund Emeritus, including 25 payroll employees, out of his own pocket thus far. Damera owns almost all the equity in Emeritus.

Following Travelguru, Damera moved into management education with a venture called Eruditus, partnering with Chaitanya Kalipatnapu at INSEAD Executive Education to bring executive short courses to emerging market companies.

“But two years ago we realized, bringing these schools to global markets, demand far exceeds supply, and there are considerable price constraints.”

“I asked ‘how do we scale this?’ It was clear we needed to go online to get the necessary scale,” says Damera.

“At the same time reputable academic institutions were starting to get serious about online learning. When the EDX platform was founded by Harvard and  MIT, many in the industry really sat up and took note.”

Damera describes three broad models currently in play as business schools look to take their offerings into the digital environment: the MOOC platforms such as EDX and Coursera; the self-built, one-provider platforms such as those of HBX and INSEAD; and the partner model where schools work with a commercial provider such as CorpU, ExecOnline, or Emeritus.


Mike Malefakis, Associate Dean of Executive Education at Columbia Business School, is candid that CBS falls into the third category.

“Columbia hasn’t had the same resources as some other schools–to create its own studios or do its own production. Although it was first in its space to offer an online open enrollment program, in 2012, it has had to find partners to get online.”

So far CBS Executive Education has partnered with five different providers over the past four years, in what Malefakis describes as a “real-options approach” referencing the strategy principle that says managers facing uncertainty do best by taking various alternative stakes to maximize chances of holding potentially valuable positions while spreading risk, analogous to how investors use financial options.

“It is all about experimenting, seeing which partnerships work, continuing to further build relationships with those that work well,” says Malefakis.

Having said this, there also appears to be a genuine meeting of minds in the Emeritus partnership. “We really like their production model, what they are designing for in the online platform.”

“When dealing with world-class faculty, you need good filming and production techniques, but you also need to know how to work with faculty,” says Malefakis.


“The crew at Emeritus ‘gets’ the content, in addition to capturing the imagery and slides and lessons. Faculty have enjoyed working with them. It’s like having bright students in the room when filming, and at the same time a good director’s eye helping us make translation of our content into the digital space.”

For Damera this deeper relationship with the schools and collaboration with faculty is a pivotal differentiator of Emeritus.

“This is about deeper design. We help the faculty create content in the digital environment. Our partners are founding institutions not just content providers. We’re not just putting their stuff online.”

Emeritus is set up to foster academic collaboration between itself and the partner schools via a five-person framework it calls the “Academic Steering Committee,” made up of the Executive Education directors of each of the schools (Malefakis; Peter Hirst of MIT Sloan; and Clark Callahan of Tuck Dartmouth). Emeritus has two representatives, one being Damera himself, the other Committee Chairman Bob Halperin, management education industry veteran and ex-Director of the MIT Center for Collective Intelligence.

Partner schools don’t have any equity in Emeritus, and have no say over commercial decisions. The academic committee’s remit is limited to issues to do with faculty, academic standards, curriculum design and learning outcomes.

By agreement, all programs have have a common instructional design principle of one-third lecture (video, asynchronous) and two-thirds synchronous experiential or peer-learning, application and feedback.

This theory vs. application weighting reflects the schools own brands: MIT’s ‘Mens et Manus’ learning-by-doing, and Tuck’s peer-to-peer learning philosophy, says Damera.

Student delegates engaging with their peers circles at Emeritus classroom in Singapore

Student delegates engaging with their peer circles in Singapore. Picture: Emeritus

Baking real-time, peer-based applied learning into the online experience is no small matter, and Emeritus has developers around the world creating new virtual collaboration tools. This plays out in, for example, Professor John van Maanen’s ‘Leading Organizations and Change’ course, where the final part calls for a multi-player simulation whereby each group has to make eight sequential decisions in competition with other groups.

Although van Maanen, a living legend in field of organizational behavior, had run the simulation many times in the classroom, an online version didn’t exist until Emeritus made it happen.

The technical side of the Emeritus’ value-add includes the online learning management system (customized from Canvas, by Instructure), and a ‘Whats-app like’ mobile app that handles interactions across the broad cohort as well as inside small learning groups.

Similarly to ongoing developments at IESE, the company and MIT are creating a “big data” system called “Meeting Mediator” that monitors the entire scope of the student digital interface to build a picture of participant interactivity patterns, which can be fed back to students and instructors as part of learning and review.

Emeritus, in addition to providing all the video production and technology platform enablers, is responsible for marketing, enrollment, billing, and the student experience.


The key difference between Emeritus and other institutions offering online education partnership services is orientation to global markets. “We have feet on ground, marketing, meeting the companies in global markets,” says Damera.

Malefakis agrees that Emeritus “brings access to a market we don’t have in NYC, helping Columbia break down time and space barriers across the globe.”

Despite a meeting of minds, and common interest, negotiating the rights and responsibilities between three eminent US universities and a privately held Singapore startup company was a long and winding road. The general councils from each of the universities was involved over four months of assessing contractual arrangements, says Malefakis.

All three schools have transparent, identical agreements, and get the same revenue split (a straight percentage of gross sales.) Each splits its own course sales with Emeritus–there is no pooled revenue.

Acknowledging the background brand risk in harnessing the Columbia name to a startup commercial entity on the far side of the world, Malefakis observes that there is an even greater strategic risk in not being at the global table for executive education  when the cards are being dealt.

Intellectual capital comes completely from the schools, and Makefakis observes that the academic partners are, in terms of the agreement, entitled to reuse and repurpose what they created for Emeritus in their own other on-campus or blended-learning programs. They can use the material for their client independently, on or off the Emeritus platform.


Might there be some trickiness in in-house competition between the schools? Says Damera: “The consortium leverages the strengths of each. MIT is strong in digital business, technology and entrepreneurship; Columbia in finance, global markets, digital, banking; Tuck in health care and innovation. They all add something without stepping on each others toes.”

Emeritus the company is hoping to have 20 short-courses from its three partners by the end of 2016, and also launch a one-year Post Graduate Diploma in Business Administration certificate–awarded in the name of all three schools.

Damera has his eye on open enrollment options, but for now the company is focused on the in-company market. He’s targeting to have 20-30 global company accounts, each putting 3,000-5,000 employees on his high-brand, low-cost management development courses every year.

In business education worldwide there are a few thousand people lucky or rich enough to get quality management or business education in any year. “This is not going to move the needle on social and business impact worldwide. But the Emeritus Institute of Management can do that,” says Damera.

Posted by admin in EdTech, Innovation, Learning

CEOs Make Room For Bold And Beautiful In HBS Business Of Entertainment Course

First published forbes.com 2/2016Harvard Business School Professor Anita Elberse has a decade of research charting the great rise in power top-tier celebrities have in entertainment, both in commanding ever-higher pay and as moguls in their own right able to dictate the terms of engagement and define new business models for themselves.

If stars are becoming power brokers of their industries, it makes sense to get them into the mix of a business school course that looks at strategies for success in the entertainment industry.

Last year when HBS executive education ran its four-day Business of Entertainment, Media and Sports (BEMS) course, basketball star Dwyane Wade was a student delegate, alongside other stars who have sought anonymity. In 2014, linebacker Brandon Marshall and supermodel Karlie Kloss were in the class.

Dwayne Wade, Anita Elberse, and Brandon Marshall at Harvard Business School, 2015. Picture: HBS

Dwyane Wade, Anita Elberse, and Brandon Marshall at Harvard Business School, 2015. Source: HBS

When I interviewed Elberse for Forbes.com last week, she said: “If you compare the world of entertainment now with the world of entertainment 25 years ago, you see that some individual stars can get things done now and can wield an influence now that they couldn’t in the past.”

Superstars are getting smarter about how much new-found power they have, but knowing how to best use it is what brings people like Wade into the HBS classroom.

“They want to know how they can best monetize their brand enterprise and leverage their influence.”

Says Elberse: “If you want to understand the world of entertainment you cannot just have people from the big (conventional entertainment industry) companies, in a room, and have them try to figure out what’s the future.

“You have to also incorporate the perspective of people like Wade or Kloss, and get an understanding of what it is they want to achieve and how they want to achieve it. Because increasingly they are shaping this space.”

“That’s why we are keen to have these people in the room”.


This is an arrangement that is obviously also valuable to the standard agents, managers, and entertainment executives the course attracts, who get to hear the perspectives of talent from the very source.

Executive Education always justifies its value in part by who else is in the room—the cross fertilization, networking value proposition.  Other than sourcing the perspectives of star talent, BEMS carefully assembles a classroom of executives across the worlds of film, television, music, book publishing, sports, and allied sectors.

Following the famous HBS “case method,” where learning is achieved by close study of past real-world situations (a pedagogic style b-schools learned from law schools), the BEMS program uses cases studies of stars who have flexed their power, for example the HBS Beyoncé Case, which looks at the company Sunday’s Super Bowl halftime show star built around her brand, that sits outside the traditional record label structure.

Case Studies in the Business of Entertainment, Media, and Sports program, 2015

Case Studies in the Business of Entertainment, Media, and Sports program, 2015. Source: Anita Elberse

The BEMS program also pivots on Elberse’s other main research theme: the rise of blockbuster economics in the entertainment industry.

“Increasingly companies, and even individuals, have to make bigger bets in order to stand out in this space. So this is where you get film studios making ‘tentpole films’ or record labels spending an insane amount of money to try to market someone’s album,” says Elberse.

“That creates a new competitive environment in which there is increasingly a difference between companies that have scale and can do those things and companies that cannot—which are increasingly locked out of that space.

“Increasingly these markets are winner-take-all where a few people at the top get all the rewards and are increasingly powerful.”

The winner-take-all distribution pattern, which can manifest in situations where variables are able to scale far beyond what would be expected in a Gaussian “normal distribution” curve, is a topic well known to statisticians, and it was Nassim Taleb who most clearly brought it to a business audience in The Black Swan where he says: “Intellectual, scientific, and artistic activities belong to the province of ‘Extremistan,’ where there is a severe concentration of success  with a very small number of winners claiming a large share of the pot.”


Elberse, in her book Blockbusters, tells the story of how Alan Horn in 1999, new in his role as president and chief operating officer of Warner Bros., singled out four or five event films among his annual output of more than 20, and steered a disproportionately large portion of production and marketing budget to them.

Making big-budget movies and lavishly marketing them was not new; what was novel when Horn did it was building an entire strategy on selective disproportionate budget allocation.

The recent wall-to-wall tsunami of media during the launch week of Star Wars 7 is the poster event for this approach.

Blockbusters contrasts this strategy, which was wildly successful for Warner Bros., with that of Jeff Zucker, CEO of NBC’s Television Group and NBC Universal in 2007, who pursued the opposite strategy: placing a larger number of smaller bets and guarding against deep investment on any single project.

“During Zucker’s tenure, NBC fell from its perch as the highest-rated television network to fourth place, behind its three broadcast rivals—ABC, CBS, and FOX—a demise once unthinkable.”


Blockbuster strategies almost always go hand-in-hand with eye-popping investments in top creative talent, which is how these two themes of the BEMS course come together.

According to Blockbusters “The focus on star talent now extends into virtually all sectors of the entertainment industry. A Spanish businessman single-handedly raised the bar for investments in A-list talent in the world of soccer. Bringing a show-business mentality to his renowned soccer club, Real Madrid’s president, Florentino Pérez, started pursuing what he called his ‘galácticos’ strategy, a reference to the star power of the players he sought to recruit.”

The celebrity pay scales and tsunami marketing budget required of a ‘galácticos’ strategy puts huge pressure on the business models of studios, record labels, and sports teams, and flies in the face of conventional business logic which says spread rather than concentrate risk, and limit investment to a level that won’t break the bank.

Yet not doing ‘galácticos’ appears an even surer route to failure, not only inside but also outside entertainment. One need only think of the many that have fallen or can’t now get into the industries where Uber, Twitter, AirBnB, and Facebook are winner-take-all. Such is the pressure on studio executives and other leadership decision makers in managing the strategic economics of ‘Extremistan,’ of which the entertainment industry is a core province.

Not one to undersell itself, Harvard’s marketing for the BEMS course tells paying executives they will learn to “assess different strategies, including when to bet on a blockbuster versus a number of smaller ‘plays’”; “discover when it pays to bet on A-list talent”; and “evaluate the effectiveness of strategies that play to the value of star talent.”


Meanwhile, crossing both themes of star empowerment and blockbuster economics is the not-insignificant matter of digital technology evolution.

The entertainment industry is ground zero for digital disruption because so much of the product can move in digital form, and because social media allows stars and fans to disintermediate the corporate broker.

The program has case studies on Facebook and BuzzFeed, among various players that are changing the way either stars or producers can market and distribute content.

The big question currently facing entertainment companies is how digital technology will affect their bets on blockbusters and superstars. Does it increase or decrease the power of talent? Does it make the blockbuster strategy obsolete, or even more necessary?

Elberse in Blockbusters says “Some industry insiders have suggested that digital technology will spell the end of blockbusters—and, with that, the effectiveness of blockbuster strategies. Is the rise of online distribution channels a sign that soon the ‘old’ rules of the entertainment business will no longer apply?

“Looking at the popularity of sites such as YouTube that democratize content production and distribution, one might be tempted to conclude that a ‘yes’ is the only right answer.

“But a closer look reveals that the reality isn’t quite so simple. In fact, in today’s markets where, thanks to the Internet, buyers have easy access to millions and millions of titles, the principles of the blockbuster strategy may be more applicable than ever before.”

Her conclusion: “There are fundamental laws of consumer behavior that explain the strategy’s enduring appeal—the kinds of laws everyone with an interest in the entertainment industry should be aware of, in other words. The blockbuster strategy’s continuing importance to the success of entertainment companies is made abundantly clear in the enormous amounts of data that online channels generate.”


BEMS runs June 1-4, 2016 at Harvard Business School, taught by HBS faculty, Anita Elberse, Kristin Mugford, and Felix Oberholzer-Gee who is also Chair of the Harvard MBA Program.

Cost is $9,000 including residential hospitality which would hardly trouble the likes of Taylor Swift or Peyton Manning, or the Bertelsman board, but may give pause to the average company sponsor particularly as two of the days are half-days.

But tuition spend notwithstanding, HBS anticipates a full class of 75-80 delegates, and turning many hopefuls away. Selective admissions allows HBS to curate the class—selecting for seniority and influence, and for balance across entertainment sectors, including film, television, music, nightlife, fashion, publishing, sports, and the performing arts.

A Harvard Executive Education spokesman would not reveal what percentage of applicants is likely to be rejected, or was rejected last year. (By way of possible comparison, the full-time HBS MBA rejects seven out of every eight applicants.)

So who are the celebrities earmarked to be BEMS students 2016? Elberse knows already, mostly, and she has also signed a celebrity guest speaker—but she won’t give Forbes.com any names.

To a certain extent this is understandable: “In 2014, when word got out that Sir Alex Ferguson was coming to speak, people were lined up outside the Harvard Executive Education building and down the road. We had to call security! This doesn’t normally happen in executive education, not even at Harvard Business School,” she says.

Posted by admin in Leadership, Learning

The Future Of Leadership Development With IESE’s Learning Innovation Unit

First published forbes.com 1/2016. For most business school educators and their corporate clients, the moving frontier of executive education is the online classroom or perhaps MOOCs (massively open online courses). But educators at IESE Business School, overlooking and perhaps taking courage from Barcelona F.C.’s Camp Nou, are racing past this toward what they call “omni-learning.”

Omni-learning continuously and digitally integrates all real and virtual learning sites –classroom, workplace, customers’ premises and beyond.

The concept owes much to data-tracking adaptive feedback systems that have emerged in other industries, for example Fitbit wearables that track health and fitness activity and provide ongoing interaction with peers and feedback to doctors. Or, similarly, Waze (a Google company) which aggregates continuous distributed peer imputs about the state of traffic into knowledge that guides driver choices.

IESE Business School, Barcelona. Picture: the author

IESE Business School, Barcelona

In an IESE Insight position paper “The Road to Omni-Learning: How Digitalization is Changing the Way Executives Learn,” the directors of IESE’s Learning Innovation Unit, Drs Guiseppe Auricchio and Evgeny Kaganer, argue that eLearning is already “a relic” in merely adding an online component to traditional education.

So far use of digital technologies has been merely as instruments that tinker with an educational model that remains bound by the idea of instructor-led classroom-based learning.

But Auricchio and Kaganer anticipate that digital technologies will break the classroom paradigm entirely, allowing something altogether new in executive education: learner-led, peer-oriented, real-time adaptive knowledge acquisition that works seamlessly across all relevant sites and contexts.

I tracked down Giuseppe Auricchio for a one-one interview, here are the highlights:

Auricchio: “When I think executive education program, I don’t think Monday morning. I think ‘the learning experience’ , what is best possible way to achieve the learning outcome — accessing the most appropriate tool at each step?”

“We know a learner has to be motivated in order to learn. Yet we have passive, one-way, top-down delivery. We know a learner needs constant feedback, yet we currently have no way to do this other than an exam.

“Lectures are the worst way to learn. But in an analog world they are the only way to scale. Now digital technology is lifting these constraints, so we can start to do the things we know are right, but which practically and economically have not been feasible.


“Digital technologies will finally allow us to create learning that is much more aligned with the way we know real learning occurs—in situations that are social, collaborative, ongoing, and which personalize learning and assessment and giving the learner some control.”

In the IESE paper the authors explain further: “The number of organizations investing time and resources in alternative learning processes is growing fast. But they treat online learning as an optional extra to gain efficiencies–saving the time that executives spend away from work, and reducing travel costs, so the organization saves money. Meanwhile, the true intention–to improve learning effectiveness–gets lost.

“In your organization, don’t start by asking, “How can we do what we currently do better?” Instead ask, “What could be done at each key stage of the learning process to enhance or optimize the experience for learners, which integrates the respective strengths of online and in-person learning?”

Kaganer and Aurrichio isolate three key features of omni-learning:

  • Continuous and Cross-Context. These overlap, and are rooted in the idea that learning must be knitted into an executive’s everyday activities rather than be a standalone event. The range of an executive’s activities and, therefore, physical and virtual learning contexts necessarily spans all the places and situations the executive finds herself in, which all need to be captured and integrated.
  • Learner-Led. In formal learning, pathways and learning experiences are preselected by the lecturer or learning designer. In omni-learning, it is anticipated that participants identify and integrate learning moments themselves, including making the choices that personalize each learner’s journey to his own needs.
  • Data-driven. The learner-led moments embedded in everyday situations generate a rich data footprint, to be captured, stored and analysed to monitor each learner’s performance and personalize tasks. Crucially, data is not just a record of past activity — the learner’s path data is available to guide future choices. As with Waze, collaborative data feedback will guide best choices each learner can and should make next.

Collaborative data also plays a role in learners’ engagement and motivation. Again drawing on the analogy with Fitbit, the authors say there is a “motivational boost stemming from the ability to visualize one’s progress and to compete with others. Ultimately, this transforms the experience of (staying fit) from a fragmented set of difficult-to-sustain personal commitments to a holistic, social journey integrated into one’s everyday life.”


At present, omni-learning is an aspirational idea not an established practice, with the technology still clunky and buried in stand-alone apps. However IESE Executive Education is currently bootstrapping an engagement with one corporate client that embraces aspects of omni-learning logic, connecting in-class learning with external learning moments, including social and workplace platforms chosen by the learning cohort.

It allows executives to integrate what they are reading, talking about, or observing back into the education program, and make their information and usage data more readily available to all. The totality of activities, both physical and online, of all learners in the group is aggregated for general insight and benefit.

At the same time IESE is updating case studies with multimedia, providing links to relevant news and analysis, embedding Q&A to improve retention, and creating adaptive storylines to stimulate engagement.

When the full-blown vision arrives, omni-learning will go beyond the business school and the beyond any one specific executive program, allowing each executive learner to connect with other and even competing contexts, people, places and practices in an expert-guided but learner-led system.


Success depends on technology progress quickly allowing ease of use and quality of user experience, and according to Auricchio the technology is not too far off at this stage: “Google could pull it all together in six months.”

But progress in this direction involves more than just better technology. It involves a fundamental shift in the way learning is perceived, designed, and used.

Says Aurrichio: “What is harder is changing organizational culture and managerial mindsets inside organizations. The guru-led classroom has been the educational frame for at least 100 years. Omni-learning displaces the classroom and centers learning on the individual learner.

“Consider how most executive development is assembled. The starting point is usually a classroom-based core, augmented by some online component. Contrast that with how other digital products and service are offered today, where user-led experiences span channels and contexts, and which are characterized by user empowerment.”

Employees are being exposed to data-driven adaptive learning in their private lives. With this exposure comes new expectations that will drive what learning should look like at work.


Individuals will take control of their personal learning as an everyday activity integrated into other daily workplace activities, and be ready for options that go beyond simple blended online-offline modes into a set of continuous activities.

Client company or learner perceptions aside, the displaced classroom also implies deep challenges for business schools and other providers of executive development. Not least, the entire foundation of the current business model—billing per contact teaching day—will crumble and have to be rethought.

There will also be challenges to current executive education department programme design processes. Auricchio foresees a far less faculty-led model as learning design shifts from predictive-path “instructional design” to adaptive-path “learning experience design.”

Learning experience design will require a broader spectrum of actors, including a learning community experience manager and possibly data specialists.

At the same time, he remains savvy about the pace and extent of digital disruption in the executive education industry. “’Either-or’ framing is incorrect. It won’t be either online or face-to-face. Either omni-learning or a traditional program. Even with Fitbit we still go the gym!”


“Shopping is still shopping, but not what it was five years ago. It is still about buying a dress, but not as was. It is not just going down the high street. Nor is it just going online. It is about seeing the item, tweeting it to your friends, price comparing it, and getting it delivered. It is a continuous, seamless, online-offline digital experience.”

In the same way, in the next era of executive education the basic functions of teaching, coaching, mentoring, reading etc. will be recognizably fulfilled, both online and off-line. But these will be integrated into a continuous data matrix that will greatly expand options and benefits for learners and corporate purchasers of executive education.

Posted by admin in EdTech, Innovation, Learning

How Michigan Ross Can Give 500,000 Alumni Free or Half-Price Executive Education And Still Make Money

First published forbes.com 10/2015 The University of Michigan Ross School of Business on October 12 announced free lifetime open-enrolment executive education for all its degree alumni, a business model inflection that raises interesting issues in strategic cannibalization, and which threatens the status quo of both MBA and wider short-course leadership development industries.

The “Alumni Advantage” offer means UM graduates have lifelong free access to executive education, in Ann Arbor, in Hong Kong, Malaysia, India, and online. Non-Ross UM alumni are eligible for half-price.

The offer applies only to open-enrolment executive education programs. The school will continue to operate custom in-company executive education in the normal way.

Still, there are about 3,400 students at Ross School at any one time (including about 400 MBAs, adding themselves consistently to 45,000 MBA alumni), and the University of Michigan estimates its global alumni base at more than 500,000. That’s a lot of people to promise free stuff to.

The question is how Ross can sustain this offer, and why it expects to gain more in value than it gives up in fees.

Picture: University of Michigan michiganross.umich.edu

The Ross School, University of Michigan. Picture: University of Michigan. michiganross.umich.edu

It is standard practice for executive education units to limit free or concession seats on programs so as to create a sustainable ratio of paying vs. non-paying delegates, and to cancel programs that don’t have enough paying delegates.

In this they are something like airlines. Once a program hits an acceptable profit (or acceptable strategic loss) threshold, the marginal cost of the unused seats is close to zero and and the revenue value of the empty seat is zero, so it’s relatively easy to give them away. Also, executive education can push class size, within reason, to accommodate the giveaway seats.

With obligation managed in this way, the only revenue loss to be born is the number of alumni who would have been full-price buyers of open programs multiplied by the value of what they would have spent. It’s hard to know what that number might have been, but we can assume that Ross Exec Ed knows its existing open-program customer base, and that it’s not thickly populated with paying UM alumni.

All this is why Professor Scott Derue, Ross School Associate Dean for Executive Education, in an interview with Forbes.com is able to say: “I do not expect a major impact on (Ross) Executive Education from a business perspective. We will continue to serve our clients at a high level and enroll participants from across the globe in our open-enrolment and custom programs.”

MBA Calculus

On the other side of the ledger, the move has various significant upsides.

First, it completely changes the Ross MBA cost-benefit calculation, not to mention that of all other Ross and UM degrees. The $61,590 per year (full-time MBA, out of state) for two years that the Ross MBA pays will now buy them as much business school education as they could ever use.

This should drive up MBA admissions interest, and therefore student quality, all of which will push the Ross MBA up the business school rankings, where it is currently ranked 24th in the world.

Full-time MBA–the  traditional flagship b-school degree–rankings have an disproportionate effect on the general reputation of a business school and the desirability of all its products and services. So pushing its MBA ranking gives the Ross School impetus in executive education and all across the board in gaining parity with the historically elite providers such as Harvard, Wharton, Stanford, Chicago GSB, and European equivalents LBS and INSEAD.


There are other benefits. Open short-courses, which have always required a heavy and consistent marketing spend, are becoming harder than ever to sell due to mostly free MOOC (massively open online course) purveyors such Coursera, edX or Udacity, as well as readily available product from a myriad of b-schools, policy schools, and wider professional education providers. There is huge pressure on profit margins.

So Ross is astutely giving away product that has become quite difficult and costly to sell.

But part of the reason for keeping open programs going is they function as a “shop-window” for the in-company custom side of the business. This side, with bespoke programs designed to directly advance clients’ strategic and business interests, typically renews via senior relationships and is less sensitive to price.

Furthermore, from a marketing point of view, the alumni who see benefit in the open programs they will now attend become gateways to custom programs potentially sold to the organizations they work for.

Donor dividend

Still more benefit is to be had from genuine alumni integration into the life of the business school. B-schools tout the value of their global alumni networks, but beyond immediate cohort friendships this benefit is at least dubious, and perhaps widely overestimated.

When Derue says: “We are redefining the relationship between student and school to be a lifetime partnership,” he has a valid basis to claim there is a real possibility that Ross alumni will be around, involved, integrated, and so add value in a way that other schools cannot match.

And, to cap it all, there’s a likely quid-pro-quo donor dividend. Being active in the life of graduates and giving them clear and present value is not going to hurt the Ross School or UM when it comes time to solicit alumni donations.

Posted by admin in Innovation, Leadership, Learning

Executive Masters in Organizational Change Offers ‘Mindset Shift’

First published forbes.com 3/2017. Activism is not usually a term that goes hand-in-hand with executive education, but in a world where “resistance” and “protest” are now everyday language among the educated middle-class, it’s not altogether surprising that a major U.S.-U.K. business school is offering a graduate studies program with a radical edge.
In an interview with forbes.com, Academic Director and faculty on the new Ashridge Hult Executive Masters in Organizational Change (EMOC), Professor Steve Marshall, references Albert Einstein saying, “a problem cannot be solved from the same mindset that created it. ”

Ashridge Hult

Ashridge Business School. Inset Professor Steve Marshall

Problems we don’t seem to be able to shift using our habitual ways of thinking include “‘intractable’ issues like climate change, social justice, the growing gap between rich and poor, gender issues,” says Marshall.

“Without doing deep work about the way we think, anything we do to address the bigger problems we face will be so rooted in those problems that its unlikely to be effective.”

To break the mindset, Ashridge EMOC is dipping into its 20-year experience in Action Research.

While Action Learning is a well-known real-world oriented team learning process, its problem, says Marshall, is participants remain rooted in existing paradigms.

Action Research, by contrast, has an agenda of promoting “a spirit of participation, social justice, sustainability, equality, and leaders’ reflexivity in considering their own paradigmatic models that we would expect to see in leaders at this (senior) level.”
Ashridge, located in a former royal residence in Hertfordshire, England, merged operations with U.S. Boston-based Hult International Business School in September 2015.

At an outreach event at Ashridge House in February, course directors told potential participants and their organizational sponsors that EMOC is for participants who are facing volatile disruption, looking to acquire new skills to go about change and become leaders through working with disruption.

It is for participants who are “fed up with standard business school platitudes and want a different experience with a focus on application and wisdom.”

“Participative and reflective frameworks of Action Research offer better ways to intervene in complex systems and lead change in organizations facing a changing future.”

Enacting Action Research implies challenging and renewing the business education mindset, so EMOC designers are rejecting the Harvard b-school case method in favor of live cases that participants and their sponsoring organizations bring to the program.
Participants’ own real-life change projects are the case studies.

Marshall explains: “The world moves fast. Typical business school case studies become less and less relevant. We would rather participants bring the stuff they are currently working, and that will be our cases.

“Faculty and peers will work alongside delegates on the project work they bring in, interlaying and interweaving methodological considerations. We hold process for them.

“We engage with their current ‘mess,’ rather than offer polished solutions to past solved cases.”

A curriculum design that invites participants to work on their organization’s real-world business challenges also calls the sponsoring corporate (or professional or public sector organization) into direct engagement.

Our invitation to the sponsoring organization is “bring us your worst problems to work on,” says Marshall.

The two-year, part-time Masters program combines online learning and webinars with six three-and-a-half-day workshops held at Ashridge and Schumacher College in the U.K.

Posted by admin in Innovation, Leadership, Learning

Milbank Takes Clients into the Classroom, Not Out to the Ballgame

First published forbes.com 1/2017. With the festive season now firmly in the rearview, all that budget you allocated to hospitality tents, restaurant dinners, VIP boxes, and the like to develop and lubricate client relationships… what will it turn into in 2017?

On sober reflection, could you have done differently or better?

Law firm Milbank, Tweed, Hadley & McCloy has an extra play in its client-relations playbook, which points to the growth of a new arena in business development, and also a new market for executive education providers .

Milbank invites and pays for clients it seeks to build relationships with to attend a 4-day business and leadership executive education program at Harvard, including modules in strategy, finance, accounting, leadership, and macroeconomics.

The program is developed and run in association with the Harvard Law School (HLS) Executive Education, with crossover to the business school. Four in five of the program faculty come from Harvard Business School.

Milbank Law at Harvard

Harvard Business School Professor J. Gunnar Trumbull teaching Milbank associates. Picture: Martha Stewart Photography

Milbank specifically invites the General Counsel or Senior General Counsel of its client firms, in other words its key relationship holder inside the target firm.

It had 23 such client delegates from across Asia, Europe, South America and the U.S. on its Corporate Counsel program in 2015, and the same numbers again on a second program in 2016.

Clients pay only for travel. Milbank funds tuition and hospitality. While program cost is confidential, executive education at a top institutions runs at $3,000 per person per day on average.

Nevertheless, when set against what firms allocate to business development or client retention it may provide comparative value, particularly in that it is value less likely to evaporate when the last port is drunk and the last cigar smoked .

The Corporate Counsel program is run by Partner and Executive Director, David Wolfson, who in an interview with forbes.com stresses the engagement is not all just about business and marketing.

“Obviously if you provide value to people you have business relations with, that is a beneficial thing for the relationship,” he says.


“Maybe they learn more about us, maybe we do get additional opportunities, and we cross-sell better. But we’re doing this more because we think we have found something of real value to our culture and to our lawyers.

“We think we can share that value with our clients.”

Milbank’s corporate program grew out of the company’s internal Associate training program, which it started in 2011.

“At the time we felt there was a great deal they didn’t know,” says Wolfson.

“We sat down with HLS Executive Education and we created our own unique program. We mixed up stuff from the business school leadership and management program, and also from the law school and from our own firm.”

Associates are sent to Harvard for a week each year for four years, starting in their fourth year, and the learning was so positive that Milbank hatched the idea to extend a similar version to clients.


Say Wolfson, “Obviously we are doing this because we want to have a business relationship, but we really do think we’ve provided a service that is quite unique.”

Part of the uniqueness is, in addition to providing learning, the engagement builds relationships. In both of the two corporate counsel iterations thus far, eight Milbank partners have participated alongside the invited client group.

Putting partners and clients into the classroom together creates shared experience and collegiality that beats simply chatting in the hospitality tent.

“We’re getting to learn about them and they’re getting to learn about us, and that means when we work together going forward we can provide a better client service ‘with’ them,” says Wolfson.

This is ever-more necessary in a complex world where professional services providers of all types, including bankers, are pitching advisory and partnering services as a way to go beyond the classic vendor remit of their profession.

For Real

As host and client solve problems in the classroom, so they are creating the partnership basis to solve them together for real down the line.

Given the cost and the close-knit partnering intent, it makes sense that buying executive education for clients is more about deepening existing relationships than about green-field prospecting.

But there is nothing about the formula that makes it unique to law firms. Using the same model, the way seems open for vendors across professional services fields and beyond to invite important client contacts into a co-learning environment which builds a more solid and more enduring partnership than even lavishly gifting ever could .

It also suggests a significant growth direction for executive education providers able to embrace their own clients and their clients’ clients in one offering.

Posted by admin in Leadership, Learning