Executive education contenders with a different angle
We’ll send you a myFT Daily Digest email rounding up the latest Executive education news every morning.
The coronavirus pandemic has accelerated many societal shifts that were already happening, such as remote working. Changes in the way executives are educated to improve their management skills are no exception.
The market that was developed by traditional business schools already faced new competition before the health crisis made face-to-face teaching impossible in much of the world. The evolution of alternative providers such as Hyper Island, THNK, MindGym, Cegos and Lumina Learning — offering courses online or at city-centre sites near offices — reflects changes in how people want to study that were taking place before online became the only option.
This new world focused on online delivery suited many organisations founded in the digital age, where web-conferencing and app-based learning had taken hold, says Andrew Crisp, owner of Carrington Crisp, a business education research specialist. He believes that the market simply reached a “tipping point” in the crisis.
“Covid was not the cause of change in executive education, but it has been the accelerator,” he says. “A lot of these new entrants have deeper pockets than the business schools, through their private backers providing them with the cash to invest. They have been far faster with technology adoption and they understand the need for accredited course certificates that mean something in a corporate context, rather than just a piece of paper.”
The new executive education providers argue they have ways of teaching employees better suited to 21st-century working practices, enabling people to take classes in city-centre locations convenient for offices and outside office hours. However, the pandemic and lockdowns have created challenges even for these training businesses.
Hyper Island, which started in 1996 in a converted prison in Karlskrona, Sweden, and now operates in six countries, from Brazil to Singapore, markets itself as a hipper, more flexible version of a business school. But, like longer established institutions, it was disrupted by Covid-19. It suffered a 60 per cent drop in revenue from face-to-face programmes in Europe in spring 2020 because several campuses were forced to close and travel bans meant students could not get to sites that were open.
The answer was to switch to online. “Our cohorts are super international, so we are really dependent on open borders,” says Helena Ekman, chief executive. “Luckily we had for the previous five years run a product line of online courses, but we knew we could not just put everything on Zoom. Instead, we redesigned courses, spacing out the learning by creating reflective periods between live sessions.”
Revenue was down 12 per cent for the year, but demand picked up as Hyper Island redesigned and extended courses as online experiences. By the end of 2020, the number of participants on its courses was 44 per cent higher globally than in the previous year. In the Asia-Pacific region, numbers were up 135 per cent.
“It is not cheaper or easier to put things online,” Ekman adds. “But commercially it has helped us, as we were able to welcome people to our courses and programmes who wouldn’t have been able to join us if we were just teaching face to face.”
Decoded is a training business founded in 2011 with the goal of demystifying the online world. Its courses are designed to explain complex new technologies to workforces in accessible ways, helping them become more productive. The London-based edtech venture expanded its headcount on the back of increased revenues in 2020, although some clients delayed taking courses, according to co-founder and co-chief executive Kathryn Parsons.
“We were always capable of delivering training virtually; the question was whether our clients would adapt to remote learning — which they did with remarkable ease and speed,” Parsons says. “Every client was impacted and reacted to the pandemic differently. It was a story of organisations either pulling forward and increasing spend on tech — in particular, data knowledge and skills to overcome challenges or grasp opportunities — or it was a case of delaying programmes to 2021 while restructuring and firefighting.”
Dutch food retailer Ahold Delhaize signed up Decoded to train about 350 of its senior leaders on four digital-awareness workshops, designed to demystify developers, hackers, data scientists and innovation, and to help technical and non-technical staff understand one another.
Ahold Delhaize also sends executives on leadership programmes at Harvard Business School but did not see the Decoded contract as a choice between a traditional executive education institution and an alternative provider, according to Ben Wishart, Ahold Delhaize’s global chief information officer. However, the company warmed to Decoded’s unconventional style.
“What made Decoded different was that the people doing the training are active practitioners,” says Wishart. “When they are not training they are delivering digital initiatives. The delivery style is more the Ant and Dec of digital transformation than it is formal theory-based education,” he adds, referencing the upbeat UK reality television show hosts. “The participants could not do anything but be drawn in and learn.”
Although Decoded trades on a more informal style of teaching than traditional institutions, clients expect the company to be just as rigorous in proving the business case for short courses as a business school, according to Parsons. “The pressure to deliver a measurable return on investment, not just to the learner but to the business, is becoming increasingly important,” she says. Decoded’s “Data Academies” are now being run for more than 30 organisations worldwide.
Ultimately, the market will be big enough for both business schools and the alternative providers, according to Fadi Khalek, edtech venture partner at venture capital fund Global Ventures. “Those companies that create business models where you can pay as you learn, and are spreading out into emerging markets in Asia and Latin America, are the ones threatening the business schools,” he says.
The micro-credential (certified short course) and online degree market is worth $117bn and growing 10 per cent annually, according to education data company HolonIQ. “It is a huge opportunity,” says Khalek.
This article has been amended to show that Global Ventures is a venture capital fund.
Get alerts on when a new story is published