As schools around the world tentatively reopen, education systems and institutions face deep (and arguably overdue) scrutiny. The attention and conversation have understandably focused on the untenable structure of many primary education systems and the increasingly strained value proposition at the heart of traditional higher learning, but the executive education industry (for which the US market alone is projected to reach ~$1.2B USD by 2022) quietly faces its own particular crucible.
These should be boom times for executive education. As we wrote in our last Briefing, the scarring experience of being steamrolled by an unforeseen-but-not-unimaginable paradigm-shifting event has left in its wake a population of organizational leaders who are eager to learn, level-up, and build future fitness. But in an unmistakable bit of irony, the very business of preparing leaders to meet the future head-on found itself largely wrong-footed, ill-prepared, and slow to release old ways of thinking and doing.
Executive education can’t go back to what it was but doesn’t have a clear path forward without a thorough reimagining of the economics involved, the value proposition at the heart of the experience, or — hopefully — both.
The slow arrival of sudden change
Change has been a long time coming. Like higher education, the executive ed industry pre-COVID had been remarkably stubborn and surprisingly confident in its general shrugging off of steady signs that a paradigm shift was approaching.
The once-exclusive content taught in many programs has been increasingly available online at low/no cost for years (such that YouTube, where 49 years worth of video is uploaded daily, has become a de facto competitor to established players across ed verticals), but real pressure to innovate on the exec ed experience remained relatively minimal for a few interrelated reasons.
(1) Digital/distance learning experiences in the exec ed space consistently underwhelmed and added little value beyond that of the information contained in the featured videos and texts.
(2) Customer-learners, many L&D professionals, and the corporate world at large continued to put a high premium on certifications and credentials from recognized and well-branded providers.
(3) Even while the content was becoming increasingly abundant, the experience — chiefly the opportunity to network and build community with like-minded peers facing similar challenges — remained scarce and thus, valued.
All of this allowed the large portion of the market devoted to an in-person experience generously characterized as “two days in a hotel conference room with stained carpet, mediocre coffee, and no daylight” to limp on weirdly undisturbed for far longer than it should have. Meanwhile, the high-end providers only slowly evolved programs that might fetch a princely $15K USD for a week (exclusive of airfare and hotel).
Covid-19 upended that equilibrium last spring as planes were grounded globally, the live event and hospitality industries collapsed, and corporate L&D budgets seized up amid the confusion. Fast forward 6 - 9 months and large parts of the world have slowly re-opened, but much has changed — including much that irrevocably impacts the executive ed market.
Business travel isn’t bouncing back. In a recent survey of Fortune 500 CEOs, half of the respondents said business trips at their companies would never return to what they were before Covid-19. And when business travel does come back, it won’t be (or look or feel) the same. In mid-July, the six largest U.S. airlines had a combined market value that was less than the $70 billion of Zoom Video Communications Inc. The impact on the airline industry will be felt in changes to the business travel experience.
Meanwhile, the business and experience of education has been profoundly disrupted too. Conditions conducive to a reimagining of learning and education arrived in force with Covid 19: Mass lockdown pushed long-resisted behavior change on the demand side (i.e., everyone was finally hungry to try digital), and the rapid adoption and development of distributed digital tools and systems supported the flourishing of new models and offerings on the supply side (i.e., digital learning was finally forced to mature). A boon for those already deep in digital, but something altogether different for more traditional providers who were ill-prepared for the immediacy of the shift to digital and clearly hoping that the shift would be temporary.
That’s looking increasingly unlikely. To date, successful school re-openings are still an exception, not the rule, and leaders we’ve spoken to in the live events industry don’t expect large(r) scale conferences to return until well into 2021. All the while, executives and professionals are growing increasingly accustomed to working and leading in the digital/remote environment. Google announced that they’ll keep most of their 200,000 employees remote for the next year just after Siemens confirmed that their employees would be able to work from anywhere 2-3 days a week going forward.
Anecdotally, Learning & Development officers are telling us that execs are now completely comfortable with doing the learning online. At be radical, we quickly sold out all of the spaces in the first offering of our live-online exec program, and we’re seeing our corporate partners warm to the potential that digital programs offer for scaling flexible, modular learning across the organization at a low cost.
Economics of a new paradigm
While a traditional exec ed program might have been priced north of $1K USD per day, it’s hard to imagine paying anything like that for digital because it’s equally hard to imagine a digital experience supporting that kind of value. The economics and the experience are completely connected and for good reason.
The cost of producing a high quality live digital event is only a fraction of what it takes to put on a high-quality in-person program. Staff needs are minimal. Catering and venue costs are zero. Speakers and facilitators don’t need to be flown in or housed for the duration of the program.
And once the baseline costs of putting a digital program together are established, the marginal cost of accommodating an additional attendee is nearly zero (within the bounds of the platform/experience design). Digital should mean democratized as the cost of online programs is often less than the flight ticket to an offsite event in the old paradigm.
For agile providers with established brands and demand, the mandate is clear: Offer more seats in more digital programs at a lower price point. Top workshops and speakers (who no longer lose a day’s worth of productivity to travel/jet lag on each side) can be effectively leveraged to serve more customer-learners.
For the erstwhile bad lighting/carpet/coffee end of the market, the future is bleak. Even those that survive the mass move to digital are likely to be squeezed out as the higher-end is able to serve more of the market at the lower price point and the old ability to differentiate sheerly by offering some kind of co-located experience of networking and community remains largely off the table.
Innovation on the experience
So the rich likely get richer here via consolidation and scaling, but that’s not the whole story. The move to digital-first programs in the exec ed space opens up a whole suite of possibilities in design and real opportunities to innovate on the learning experience moving forward (which also suggests the viable strategic path for new entrants and smaller players looking to stay competitive).
The networking and community-building pieces become more difficult to support in the virtual environment, but the learning can truly flourish. Digital has the potential to be more interactive with more touchpoints and collaboration between more learners and facilitators across a wider range of modalities than was typical in most physical classrooms. In precisely the moment that providers are forced to try something new, they’re also presented with a set of tools and platforms that make experimentation remarkably easy and cheap and the results of experiments remarkably easy to review with ubiquitous recording and reporting.
The possibilities extend beyond the specific functionality enabled by digital platforms. The very fact that the learning experience is freed from the cost and travel constraints that determined the scope and duration of in-person programs means that the learning is free to unfold on an entirely different timeline–allowing for spaced learning. The upside of learning over a period of weeks rather than hours or consecutive days is that new ideas coming out a program can actually be put into practice and integrated into daily working life and then reflected upon, discussed at the next session, and put into new practice. This allows for something like an optimal double-loop model for learning where learners continually cycle through stages of learning > practice > evaluation > reflection > new learning > new practice >… and so on. At be radical, we believe that the doing is critical to the learning, and we design our program experiences accordingly.
](https://cdn.substack.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Ff0005848-24be-43be-a24b-38fd3d3aee29_720x480.gif)We also believe that the opportunities to design for things like better spacing, increased practice, and deeper reflection suggest the future of innovation on the executive ed experience when it once again becomes possible to safely convene larger groups globally. With the learning well supported digitally and continuously, we expect to see the collocated, in-person program become increasingly devoted to relationship-/community-building (the on-site now representing what the off-site did in the past) and any work that has been specifically identified as of a type which must be done (or is much better done) in person. This suggests a more intentional “unbundling” of learning and socializing — both with a much greater focus on experience design optimization and radically improved outcomes.
When the in-person, on-site programs return, we expect them to be profoundly changed for the better. Looser, more interactive, more thoughtfully designed as experiences conducive to community and conversation. The digital-first-and-only era we’re in now should trigger a thorough reimagining and evolution of the future physical experience, and for customer-learners who’ve grown used to receiving premium content and learning at a more accessible price point, the expectations of what a $10K+ week on site looks and feels like should be dramatically transformed.
We’re looking forward to it — and to better coffee, too.
Jeffrey and the be radical team
P.S. Interested in exploring how this applies to your organization and your products & services? Find out how be radical can help you. Simply hit reply to this email, tell us a bit about yourself and the opportunity/challenge you face, and we will be in touch.