Industry Directions

Going Back to School: Pearson's Redoubled Focus on Education

With the sale of its interests in the Financial Times and The Economist, Pearson is doubling down in its primary business: education. In this interview, North America President Don Kilburn lays out just what the company is focused on right now.

• By Dian Schaffhauser
• 08/18/15

Within the last month, Pearson has divested itself of interests in both the Financial Times and The Economist, essentially putting its entire focus on the education market. And education is no small business for the company: It covers every learning stage — school, higher education and professional — and holds significant interests in all kinds of digital and service businesses, not to mention traditional textbooks.

On the higher ed side, Pearson is known for printed and digital courseware offerings as well as curriculum operations such as MyLab, which had nearly 11 million registrations in 2014. The company also works with institutions in creating and/or powering online degree programs — such as Arizona State University Online, the largest degree program in the country.

Don Kilburn heads up the North America operations, which are the largest for the company, generating 61 percent of its 2014 global revenue. Recently, Kilburn talked with Campus Technology about what the U.S. higher education market looks like from a Pearson perspective.

CT: What's happening with the print textbook business?

Kilburn: It's declining. The usual decline is in the single digits. It's an evolution rather than a revolution right now. What it's being replaced by is a combination of services and digital technology; but also there's a lot of blended approach. The vast majority of the print products we have are now supplemented and augmented by some interactive digital components. That's part of the evolutionary step — that hybrid model we're moving through.

We will continue to see that decline in print. I don't see a tipping point where it accelerates dramatically. But clearly it is moving downward on a pretty regular and consistent basis.

CT: Your company has capabilities in data collection and analytics and adaptive learning. Where do you think the Pearson offerings are today on that maturation curve, and where is the U.S. education market on that same curve?

Kilburn: It's pretty clear that we're in the beginning [stages]. The ultimate promise for many of these emerging digital technology software solutions is that we will be able to assess learners wherever they are in their journey. We will be able to serve up personalized content or personalized experiences for them, and we will be able to continue to have that interaction back and forth so that we get people to a measurable outcome in a much more consistent and probably faster way than we have in the past.

We can also begin to aggressively improve student performance as well. There's a real promise around personalized learning and the use of technology and software and services to enable that, to get better outcomes and more consistent outcomes across education.

CT: What's most interesting to you in regard to the use of analytics and adaptive learning in higher ed?

Kilburn: We have for some time had our lab programs in higher ed: MyMathLab and a number of other labs, where we have been able to assess for students that serve up homework and other content, and then show measurable results. There's a ton of research papers and a body of work in data that supports that: If you use these particular products, you will get a better outcome in something like developmental math. That's a very exciting development.

We have a product that's beginning to do that — REVEL — that's also doing that on the soft side of disciplines. It's getting very nice pickup.

We need to do a lot more of that. That collection of data and continuous improvement is kind of proving out the statement I made earlier about the opportunity.

CT: Will adopting those programs require campuses to go all in with Pearson?

Kilburn: I don't really think that way. The way I think about it is, how can we engage with institutions and educators to holistically help them with their mission — whether that be with Pearson or with Pearson and third parties or other people that collaborate? I'm pretty sure in the modern world a scenario where Pearson does everything as best-of-breed is probably not going to happen. There are going to be some things we do very well, especially around aiding teaching and learning. But there are also going to be other people that we partner with, that the institution will partner with, that we'll have to work with to make sure we get the maximal outcome for students.

CT: Pearson has got to be the biggest collector of education data in the world. How does that data drive product development?

Kilburn: A couple of points about data. Number one, we don't proclaim to own data. Our data is our client's — the institution's — student data. Largely, for most of our business that data is "permissionable," based on how people trust us.

The second thing is that where we are using that data in product development, we're getting interesting results. I remember one of our IT books. We thought that one chapter was a particularly effective chapter. Then when we saw the students working within that environment, we noticed that they performed very poorly out of that learning object. We thought, gosh, everybody thought that was one of the strong parts of the book. What's wrong there? We dug deeper and gathered more data. We found that, frankly, it was not written at the right grade level for the students using it. So we made the adjustment there, and all of a sudden student performance around understanding concepts dramatically improved. That's an example of how you can begin to get real-time data about what works and what doesn't work and move that back into product development.

CT: Are data experts part of your content teams?

Kilburn: Yes. We have data analytics experts — along with our research community, which is tied closely to that analytics community. We're going to continue to invest there.

CT: Does it ever make you nervous, all of the data that your company has to manage?

Kilburn: We're not really collecting individual student information. It's more aggregated around developmental courses. It's not the personal data of the student. Their performance might be in there or how they're doing; but it's more the aggregate data that can help us develop the products better or tell the school where we think something is working or not working.

CT: Cyber-criminals are not going to pay for that kind of information?

Kilburn: In the scheme of things that they could do criminally, that doesn't seem very interesting

CT: Let's talk about the efficacy agenda. Pearson has set a long-term goal of reporting learning outcomes right alongside traditional financial reporting. In fact, by 2018, the company says it will issue efficacy reports for its 40 largest products.

Kilburn: Audited, no less, by an audit firm.

CT: How's that effort proceeding?

Kilburn: When it first came out, I thought, this is going to be interesting. We are very serious about this. We've invested quite a bit of money in building processes for every product that has a certain amount of investment. There's a whole set of criteria:

• Does it do what we say it's going to do?
• Are the customers able to do it?
• Is it being implemented the way we say it's supposed to be implemented?

We go through these very involved processes to prove out that these products do get measurable outcomes. As you can imagine, it's a bold step to do that.

The rigor around thinking deeply about that has been really healthy for the organization, because it refocuses on what is ultimately our goal — helping learners advance their lives through learning and education. Making sure we can do that in a way we can measure puts a real laser on that effort.

[There's another] thing we are doing along with that. It's one thing to have your products in the development process be able to have a measurable outcome. It's quite a different thing to make sure that they're implemented with fidelity. So we're spending quite a bit of time figuring out with institutions and educators, what are the best practices around implementing these products and services so that we get the optimal result?

Regarding the efficacy framework, the other thing we've begun doing, which is really fascinating when we're thinking about an engagement with a large client, is to walk through the engagement on the front end with the client. When we think that the client isn't ready to implement with fidelity or that the client might have difficulties, we point that out before we even engage so that we have a discussion about how to make that optimal. It's a very different way for education companies to engage with educators and institutions.

CT: When you're working with faculty about how to use the products most effectively, what does that look like on the ground?

Kilburn: In one case, we actually configured the order of what was presented a little bit differently. We saw that certain students were actually proficient and could start a little further along and spend more time on the areas that they weren't as proficient on. We got a 10 percent increase in retention after we made a set of recommendations that was then implemented. It's kids who are going to stay in the class and not drop out. For many of these programs — developmental education — if you get through, you stay in college. If you don't, you don't go to college. The stakes are very high.

CT: Who would you be working with in a scenario like that?

Kilburn: It could be the head of a large math department. There's quite a bit of innovation around flipped classrooms and the emporium models in that area, where people are using flipping and using the technology at scale to do a lot of the teaching and learning, and faculty is actually providing the mentoring and assistance when needed.

CT: What is an emporium model?

Kilburn: That's the name for the model where you essentially flip the classroom. The students work through the technology. When they need help, they raise a flag and one of the teachers comes over and actually assists with the problem.

CT: Under the efficacy program, will outcomes become part of Pearson's contracts?

Kilburn: I hope so. I hope that one day we'll be able to tell people, if you use this you will get x results. We will track it and you should hold us accountable. I hope we get to that point where we don't need to put it into the contract because people just know it's true.

CT: It looks like Pearson has stayed out of the MOOC business for now. True?

Kilburn: It depends on how you define MOOCs. We're a very large provider of courseware, and we power a lot of programs for online education. We do assist and also create courseware at scale right now. We're most assuredly the largest provider of that right now. Do we have a free platform where we provision some of those courses? We're not in that piece of the business.

I largely think that MOOCs have done online education a big service by helping legitimize the delivery of online courses. I also happen to think that having "free" available for many things is great. I also happen to think that courseware is going to become complicated, sophisticated and more like building software over time. That's going to require a different level of scale to do that in ways that get you the measurable outcomes you want. The technology is going to continue to advance in ways [that] you're going to need a sustaining provider to do that at scale. That's why several of the MOOCs have pivoted their models to more sustaining revenue models.

CT: So you see MOOCs as a testbed for what Pearson is all about?

Kilburn: I think so. There has always been free content available and free things available. That's fine. It has its limits. It's not particularly future-proofed. If you want to do things that have sophisticated analytics packages, interactivity and real assessments that are changing and actually serving up the right amount of stuff, that's a very different animal than what the MOOCs are about now.

CT: In terms of its newly concentrated focus on education, where might we see Pearson investing over the near future?

Kilburn: The broad answer is, we're going to be investing in things where we can prove out our efficacy agenda and get measurable outcomes for the learners. We have publicly said that we are moving toward digital and service environments. And you will see us making moves in the areas where we can prove out that efficacy at scale, and also where we can accelerate our moves in digital and services so we can enable that quicker.

CT: By accelerate, do you mean in bringing the customers along?

Kilburn: Yes, where we're helping [customers]. It's a journey. We're both on the journey.