Pearson to focus fully on education

Pearson_WebBar_Top_Blue_RGBIn recent days Pearson, the world’s largest education company, has been in the news due to plans to sell the Financial Times and talks to sell its 50% stake in the Economist Group. It’s been estimated that these divestments will yield $ 1.5 bn net proceeds. Pearson will focus fully on education in the future.

Pearson expects growing and sustained demand for education, particularly driven by an emerging middle class in international markets and the digital transformation. The opportunity is to enable greater access, better affordability and improved achievement. They are working on transforming their business by building positions in fast-growing economies, shifting to digital and services, and promising to deliver measurably improved learning outcomes. With annual global spending on education estimated to be about $ 4.5 tn, Pearson sees space to grow current revenues of about $ 7.75 bn.

What could this mean for Pearson?

1. More focused strategy

You’re a global education company or you’re a global journalism company — both great things to be, but it’s hard to ride both horses equally well,” John Fallon, CEO of Pearson, said after the sale of the FT was announced.JohnFallonWe’ve reached an inflection point in media, driven by the explosive growth of mobile and social. In this new environment, the best way to ensure the FT’s journalistic and commercial success is for it to be part of a global, digital news company.” The leadership and management of Pearson can now focus fully on the growth and transformation strategy of their education businesses: emerging markets (growth), digital and services (growth and transformation) and outcomes (transformation).

2. Focused leadership of execution

Pearson already has some attractive positions in emerging markets and has taken a leadership role in the industry on outcomes, but is arguably not (yet) a frontrunner on the digital transformation. All three of these pillars will require leadership and heavy investment in the coming years and will therefore likely benefit from an increasingly focused strategy. With a rich pool of talent and an excellent reputation the company should be better placed to focus on the transformation of the education business.

3. Faster growth

Given a stronger balance sheet, Pearson should be more favourably positioned to make further investments in organic growth and to acquire other companies in digital and services, and international markets. This should in principle lead to better growth prospects for the company and a higher valuation.

What could this mean for education markets?

Good for customers?

My view is that a successful Pearson should be good news for customers. Looking at the big picture, if Pearson is successful in enabling greater access, better affordability and improved achievement in education in countries across the globe, this must be a good thing for our people and planet. And their success will likely encourage new entrants and more innovation in the industry which should yield further benefits for customers too.

Good for employees?

I would imagine that this will be good news for employees with the skills and ambitions to support Pearson’s growth and transformation agenda and vice versa.

What about the competition?

If you’re a growing digital education or service business in an emerging market, are making a measurable impact on outcomes and looking for an exit, this is probably good news :-). However, if you are predominantly a print publisher in one of the markets where Pearson is currently strong, it’s likely you will have to raise the bar to stay competitive. It’s not easy to see a direct impact on a company like Sanoma Learning which is arguably further on the digital transformation and operates in different markets, although there could be increased competition for international opportunities in digital down the line.

Will these divestments secure Pearson’s leadership position in the industry?

At this time, the company’s position seems secure: they are global market leader, they have a good growth and transformation strategy brought into sharper focus, an improved balance sheet and competent leadership. However, with a large “legacy” business, complex operating model, new competition from agile startups and a less friendly regulatory environment, it’s not a home run. Keep an eye on McGraw-Hill Education – they’ve been making smart and agile steps in recent times too as they reposition themselves as a “learning science” company.

It will be fascinating to experience the dynamics in this industry in the coming years as the giants transform themselves, new giants such as Google and Microsoft build their positions and (edtech) ventures such as Udemy, Edmodo, Altschool and NetDragon disrupt the market.  I’m interested to hear your views on this. Looking forward >>.

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Scaling up edtech in Europe

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Last week I visited the EdTechEurope conference in London. Congratulations to the team for putting together a rich program and high quality of production!

I love meeting the entrepreneurs and sensing their passion. It’s great to hear their vision and see the innovation. They trigger my curiosity. How could we put this to work for better learning impact for our customers? What could this mean for the educational ecosystem we serve? Could this company disrupt our business?

CEO Talks

 

I’m a member of the Advisory Board of EdTechEurope and spoke on the panel “CEO Talks on Digital Transformation” together with Rob Grimshaw (CEO at TES Global) and Karine Allouche Salanon (CEO at Pearson English Business Solutions). There was a lot of talk about the role of the teacher in this session which I liked since I believe the teacher is the killer app in education.

Scaling up?

I wonder if this conference tells us something about a wave of investment (and disruption) in edtech in Europe.

Is there more action?

This is the third time the meeting was held and each time participation has doubled, this time to 650 people. Is this simply because it’s a well-run and well-timed initiative? Or is the series tapping into an underlying trend of growing investment into edtech? At this rate, we’ll need to hire Wembley Stadium for EdTechEurope-2022!

Going global?

This year we had many more visitors from outside Europe. There was a particularly interesting session from SWSWedu – great to see Zaption and Cerego there, re-connecting after our recent trip to Silicon Valley! Also, the session on “Edtech Opportunities in Asia” was very worthwhile, especially for the useful advice from Prof Ping-Cheng Yeh on China. Are these signals of a growing global market for services and technology in education?

Who are the Champions?

It’s thrilling to see so much innovation taking place in edtech; IBIS Capital estimates that there are more than 3000 e-learning start-ups in Europe alone. Is this typical for a wave of disruptive innovation? Or an expression of the (sometimes hyper-) local nature of education? From an investment and partnering perspective however, it’s increasingly difficult to see the wood for the trees. Is there a risk that our industry is spreading talent and resources too thinly?

Looking forward >> Time for a Champions League?

Champions LeagueThese questions around scale trigger my interest in the idea of a “Champions League” of edtech companies, to lead the growth and transformation opportunity for education in Europe. These companies could act as magnets for talent, ideas and capital and help to bring scale to the industry. TES Global probably has such ambitions and is backed by the deep pockets of TPG. Pearson is the World’s biggest learning company and has extensive size and international reach. Sanoma Learning has a great reputation for excellence in education and digital transformation. Who are the other players who could help bring scale to the industry? Learn Capital (London)? Google?

I’m interested to hear your views on this.

Creating a learning company: lessons from the Bay Area

At the d.school Stanford

Earlier this month, our leadership team at Sanoma Learning visited the Bay Area. Our purpose was to learn more about their approach to disruptive innovation in education. The timing was especially good following the recent announcements around Lynda.com (sold to LinkedIn for $1.5 bn), Altschool ($ 100 m investment from Founders Fund, Zuckerberg) and all things Uber.

Hoover Tower Stanford

We started at the Graduate School of Education and d.school at Stanford. Then we spent a few days in smaller teams visiting about 20 edtech ventures and a handful of investors in the area. Finally we wrapped it up with a discussion about what we had learned and what it means for us.

A few things particularly stand out from the visit.

Culture: an “open adaptive learning platform”

Rapid adaptive learning seems to be at the core of the success of the Bay Area ecosystem. The architecture of the platform is good: curious scientists, practical engineers, passionate entrepreneurs and risk-friendly investors. The “intelligence” of the platform is the driven by the culture (open, passion for purpose, fast-paced) which results in a rapid exchange of insights. We found it easy to meet outstandingly good, high-level people, even on short notice. They were enthusiastic to share views and to look for opportunities, to move at a pace. The whole ecosystem gets smarter and better when this much talent gets together in that culture.

Opportunity: return on education

Based on our experience in Finland and other great education systems, we hold the view that the teacher is the killer app in education – and technology can help to super-charge the teacher. We believe a skilled and well-equipped teacher is the single biggest factor influencing learning outcomes, pupil engagement and the cost–effectiveness of education (all “returns” or as we call it “learning impact”). Investors seem to particularly like the return on investment theme (from the customer perspective).

Online education marketplace Udemy announced raising $65 m expansion funds, shortly after our visit :).

Online education marketplace Udemy announced raising $65 m expansion funds, shortly after our visit

Their thinking is that RoEs should be good for business: for example when completion of a course can lead to career progress, the company providing that course should be able to capture a slice of the benefits (particularly in vocational education). Although clearly influenced by the ventures we chose to visit, we experienced much more enthusiasm for professional learning than edutainment or B2C markets (monetization problem – poor RoE?), and for higher and further education above K-12 (more direct link to career progress in further education and go-to-market approach is very hard for disruptors in K-12). One way or another, proving and improving “returns” will be important to future success.

Evolution (or revolution?): changing ecosystems

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Edmodo, collaborative learning platform, has 50m users

Some of the most interesting discussions of the week centred on how ecosystems for educational resources are changing. How can we develop a symbiotic relationship with Open Educational Resources and User Generated Content that could delight teachers and pupils? How can we further boost the “platformisation” of our business? How should we most effectively inter-operate with other players? How can we put data to work for better learning impact whilst carefully respecting privacy? Evolving with our ecosystems must be core to our strategy.

Proud of the team

It was a thrilling trip, full of inspiration and energy, with our team in excellent form: one of the best weeks of my life! Sensing the energy, curiosity and intelligence of the team as we de-briefed what we had learned each the day was simply a gift. Great job team!

Looking forward >> How to become a true learning company?

I believe that Sanoma Learning can rightly be seen as one of the world’s best education companies. Ultimately, I think the most important question to come from the visit was: how can we become a true “learning company”? A company that can consistently learn from and with the best and translate those learnings into great “impact” for pupils and teachers. This is the exciting journey we’re on!
PS I was kidnapped by Betsy Corcoran, CEO of Edsurge during our visit. Check out the podcast here

Wonderful Jordan

Driving through Wadi Rum

Driving through Wadi Rum

Last week we took a short trip to Jordan, especially inspired to visit Petra, one of the Seven New Wonders of the World.

We wanted to see as much of the  as possible during the week, so we hired a car on arrival at the Amman Airport. First we drove north to Jerash, then south via the Dead Sea and King’s Highway to Aqaba at the Red Sea. Then back to Amman via the desert at Wadi Rum and the ancient city of Petra. Three legs of our journey were quite spectacular and I would like to share them with you.

1. Petra

The Nabateans settled here as traders around the 6thC BC and used their wealth to build Petra during the next 500 years, housing some 30,000 people during its heyday under King Aretas IV (8 BC – AD 40). Later, trade routes had shifted and the Romans took control of the Nabatean Empire. Earthquakes in AD 363 and 551 were ruinous and Petra became a ‘lost city’ until her ‘re-discovery’ in 1812.

Siq at Petra. You emerge from this cleft at the Treasury

Siq at Petra. You emerge from this cleft at the Treasury

We entered via the Siq to the Treasury and then took the Outer Siq to Wadi Musi where we could see amongst others the Street of Facades, Theatre and Tomb.

Treasury

Treasury by Day at Petra

Imagine what life might have looked like here! And think about the skills and dedication of the people required to build such a place!

But this was just the beginning. We climbed the ‘stairway’ and hiked along the top with spectacular and clear views over the site. Magnificent!

Wadi Musa from the climb. Check out the Street of Facades on the left and Theatre at the end

Wadi Musa from the climb. Check out the Street of Facades on the left and Theatre at the end

We then ascended further to the most impressive place of all: the Monastery. It was a steep and exhausting trek in the sweltering midday sun, but absolutely worth the effort. It was so beautiful and tranquil there at the top of the World.

The Monastery

The Monastery

All-in-all it was about 22 km and 6 hours of hiking and climbing. A great day program!

2. Wadi Rum

Wadi Rum is a stunning desert area about an hour from both Aqaba and Petra. It’s been inhabited since pre-historic times and is home to the Bedouin today.

Our adventure began on a camel to Lawrence’s Spring where we were joined by our guide in his 4WD vehicle. He drove us through the wilderness and guided is to key sites during the course of the next six hours. Truly amazing views of the area!

It was interesting to hear about the life of our guide. We trusted him to take us to great places and to care for our safety.

Sunset at the Camp

Sunset at the Camp

We stayed overnight at a camp in the desert. You might be surprised to know that it feels quite cold in the desert during the daytime, due to the wind. At night it gets close to freezing. I slept in my clothes under a blanket It was a good and deep sleep. I woke only once during the night, around 3.00, when I heard a wolf wailing (well, maybe it was a dog, but I have a vivid imagination).

3. Jerash

Jerash was settled as a town during the reign of Alexander the Great in 333 BC. It has rich soils that have brought it agricultural prosperity for centuries. And it has one of the best-preserved Roman sites anywhere.

The site encompasses all of the classic Roman structures such as a forum, temples, amphitheatre, hippodrome and so on. It’s in remarkably good condition and it’s a miracle the site has survived earthquakes and pillaging through the ages.

Perfect Forum at Jerash

Perfect Forum at Jerash

South Theatre at Jerash

South Theatre at Jerash

Temple of Artemis

Temple of Artemis

It’s thrilling to visit Jerash and you can let your imagination run wild, envisioning how life would have been at the site when it was active. I loved it there!

A Wonderful Country

What an amazing week! Thank you to the kind and friendly people we met and who helped us on our journey. It’s a wonderful country to visit and I can warmly recommend it.

 

Going for Gold

Inspiring Spires

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Radcliffe Camera at Oxford University

Last week our Leadership Team at Sanoma Learning visited Oxford. We’re working together on how we will lead the transformation of learning for the next generation. It was inspiring to be in this environment of educational excellence and the sessions on Educational Neuroscience and the Purpose of the Team were especially good.

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Team GB winning Olympic Gold in Beijing

Most inspiring of all was the session with Double Olympic Gold Medal Winner, Steve Williams at the Leander Club (he won rowing Gold in the coxless four in both Athens and Beijing). The Leander Club was founded in 1818 (15 years earlier than the oldest established part of Sanoma Learning – Van In) and is arguably the World’s most successful rowing club. Steve talked us through his journey to becoming an Olympic Champion and then took us out onto the water to row together.

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Our teams after the rowing session

Steve is not only an Olympic Champion but also a gifted storyteller. I will try to re-tell the core ingredients of what brought his team success, but nothing can beat the inspiration of hearing it in situ. He strongly credits many other people for the success, especially their coach, team members and everybody who supports the operation.

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Steve explaining to us how they train

Overall, I believe the distinguishing factor behind their huge success has been their mindset: a culture of excellence where they truly live by their code. This has been nurtured and cultivated and almost certainly dominates the lives of the teams – you truly feel it everywhere at the Club. In my own words, I would summarise the essence of their approach as follows:

1. Set the highest expectations (goals)

Purpose: inspire a nation

Goal: win Olympic gold

Stopwatch: performance target (time)

They have set themselves a noble purpose with a clear and highly ambitious goal and they track progress consistently on the journey – not only to check and improve performance but also to affirm progress and success. The hunger for Gold in particular is deeply embedded in the culture and symbols of the Club. For example, the names on the Honours Board at the entrance to the Club for major international events such as the Olympics, are given in two colours only: Gold (winner) and Black. There is no doubt that this Club expects its members to win Gold. It triggered us to think how we can sharpen our purpose, goals and stopwatch at Sanoma Learning. What’s our ‘Gold medal’ – our impact on learning, our reach, our size?

2. Focus on moving the boat (strategy)

The Olympics are held every four years and a race lasts about six minutes. All of the focus on the journey there and during the race itself has to be on doing the things that move the boat. Make a plan to win, cut out the things that don’t make an impact and focus on moving the boat forward. The things that don’t move the boat forward basically hold it back. What lessons can we learn from this at Sanoma? What are the things we are doing that really move the boat forward? Is everything we are doing ‘moving the boat’?

3. Get the basics right (execution)

The team develops supreme physical fitness and technical competence that helps to bring them the bullet-proof confidence that underpins a winning mindset. Part of this derives from a gruelling training schedule of six hours per day, six or seven days per week. Good nutrition and rest are taken seriously and staying mentally strong is crucial. Essentially, the team is making the kilometers so that they are better prepared than anyone else on race day. The determination and pure discipline in delivering on the basics Steve showed were inspiring and possibly obsessive (no offence intended Steve). It makes me wonder: are we as fit in all places as we need to be to succeed in the future? How can I make myself fitter on the basics?

4. Learn fast (improve)

Part of any high-performance culture is to learn fast. I was especially interested in the ‘hot wash-ups’ they do immediately after each outing on the water. Very quickly, they huddle up and ask eachother a) what went well and b) what can we improve next time? Simple and effective. Part of their code is also that people speak out early and at the right time (before a decision) and that no problem lives longer than two hours. Feedback is so crucial to learning! We did a ‘hot wash-up’ and ‘feed forward’ with our team afterwards. We learned a lot and it was interesting and (sometimes) fun too! We have an open and trusting team so it was easy to do. Imagine how much further we could develop ourselves, our team, our people and our business if we would structurally build this into our culture. Let’s do it.

5. Celebrate success (enjoy!)

Members of the Leander Club want to be winners. And they want to feel like winners. Celebrating success feeds that mindset. Check out the Honours Board. See the photographs of winning teams hanging on the walls. Read the newspaper articles pinned on the wall, telling their stories of success. Listen to how they tell their story. Feel how Steve radiates pride at being part of the Leander Club. See how they measure progress and affirm their success. Who would not want to succeed in this environment? I am sure we could do a better job at celebrating our successes and those of our customers at Sanoma Learning.

Aim higher

I was inspired by Steve and his journey. Listening to him made me want to set (even) higher standards for myself, our team and for Sanoma Learning. We’ll be working this out with the team in the coming period.

Inspire a generation

Even more fundamentally: what about our schools? Imagine Steve Williams as Headmaster of a school. Think about the high aspirations, the culture of excellence and the dedication to purpose. The ‘fitness’ on so many dimensions. Imagine the positive impact such a leader would have on the next generation of children and teachers. What could be a better ‘Gold Medal’ than that?

Re-designing education in Finland for the 21st Century

Finland has achieved remarkable success as a high-performing and inclusive education system. But what needs to be done to design a system that will serve the country well in the 21st Century?

Last Friday I joined a workshop in Helsinki organised by Esko Aho, former PM of Finland and his colleague Marco Steinberg, with special guest speaker Prof. Paul Reville, Director of Harvard Graduate School of Education’s Education Redesign Lab, to contribute to the debate on designing a new solution.

Right question

I was enthusiastic about participating because this question is exactly right, and not only for Finland. Sanoma Learning is keen to take a leading role in co-developing and operating new learning solutions and systems. And it’s inspiring to learn from the experience of experts with a passion for education and learning – not only Prof. Reville and Dr. Steinberg – but also the other talented people who joined from amongst others Sitra, Tekes, the City of Helsinki and other companies and institutions.

Revving up the Engine

Prof. Paul Reville, Director of Harvard Graduate School of Education’s Education Redesign Lab I was especially interested to hear Prof. Reville’s vision on the key areas that should be addressed by a future proof solution (or in his words, Human Capital Development Engine for K-12):

  1. To individualise/personalise/customise education such that each pupil emerges from school ready for meaningful employment and 21st Century citizenship
  2. To develop each child holistically including their health and well-being, looking not only at academic performance but also supporting disadvantages such as poverty, mental and social disadvantage and so on.
  3. To significantly increase out-of-school learning opportunities (80% of a child’s time is out of school, making the school environment itself a relatively weak intervention) including such things as summer school, tutoring, sporting, music and art and so on, especially for the less advantaged.

But what are the answers to these challenges? And how to realise change in such a complex environment as education, with many stakeholders?

Advice to Government?

We workshopped on what our advice would be to the new government in Finland on creating the next generation education system. The most important themes that emerged from the discussion (probably not the formal standpoints of any of the organisations represented) were:

  1. To enable the personalisation of learning: developing the talents of every child
  2. To train teachers for 21st Century teaching and learning
  3. To create strategic ownership for the change

How to personalise?

Looking specifically at suggestions that arose from the discussion to government on how to enable personalisation, the main themes were:

  1. To digitalise and personalise the curriculum
  2. To further develop the role and skills of the teacher
  3. To change the organisational model, enabling formal and informal learning, both within and outside the school.

Doing it on purpose at Sanoma Learning

I learned a lot about the design of education systems and about Finland during the day and was inspired by the outcomes of the discussions. I also felt that our purpose at Sanoma Learning – “to enable teachers to develop the talents of every child” is consistent with the described future proof model (or at least the role we can play in it), and that the investments and changes we are making to support this purpose are in the right direction.

Looking forward >>

After the meeting, I have the impression that on the level of the education system, i) bringing strategic ownership to leading the change ii) enabling the skills, pedagogical, curriculum, technology, organisational and cultural change iii) finding a transformational approach for schools from the standardised to the personalised model (it will take years and will not “flip” overnight) and iv) investing in and implementing the change at the right pace, will be harder challenges than concepting the “engine” itself. It’s not going to be a quick-and-easy transformation journey, but if we get it right, we could make a huge positive impact on the learning of our next generation.

Thanks to the team for organising an inspiring day!

2014 Results Sanoma Learning – good progress as frontrunner on the digital transformation

sanoma-learningFollowing the announcement of Sanoma’s full-year results earlier today, I’m pleased to share with you that Sanoma Learning delivered a good performance in 2014. Thank you to our customers for your trust in us, and thank you to our people for your contribution in making this happen!

We engaged with about 10 million pupils and 1 million teachers across Northern Europe, helping pupils to develop their talents and teachers to excel as professionals. We looked ahead and invested heavily to strengthen our position as a leader in the digital transformation. We created some new opportunities in big emerging markets, like China.  And we built new teams to lead Sanoma Learning into the future.

Sales of digital and services grew by about 15%, to more than € 50m for the first time in our history, underpinning top-line organic sales growth of 1%. Our profitability was strong with a margin of 17.6%, excluding non-recurring items but including heavy investments in the future. Around half of our business now plays on digital or multi-channel format, making us maybe continental Europe’s biggest EdTech company in K-12 education today!

Good progress locally

Malmberg in The Netherlands launched five major initiatives in primary, secondary & vocational education and in testing & assessment, giving us a strong position in the market and leading to good sales growth.

Nowa Era is executing a new strategy to address the legislative changes in Poland. Under these challenging circumstances we still delivered organic growth. Amongst others, the new exam preparation offering was a big success.

At Sanoma Pro, we built a new and digitally skilled team that has developed a multi-channel strategy to drive our transformation in preparation for the new curriculum in 2016 in Finland.

Van In in Belgium once again delivered top line sales growth, driven by a strong performance in primary education (supported by our winning gamified exercise platform, Bingel) and is now building a solution for differentiated learning in secondary education.

At Sanoma Utbildning we took big steps with our digital transformation strategy and are preparing ourselves for the next generation in Sweden.

Looking internationally, Young Digital Planet realised four deals bigger than € 1m in emerging markets, planting seeds the seeds for future growth.

Our focus for 2015

Digital is going to be very important for the future of education in all of our markets. We will invest strongly in new multi-channel offerings and our capabilities (such as the co-development program) to bring them to the market, so that we go a step further in helping teachers to excel as professionals and pupils to get the best possible learning outcomes.

We intend to make use of our reputation as leader in the world’s best performing education systems and a frontrunner on the digital transformation and will strive to establish a partnership with a local player in an emerging market to boost our opportunities for growth.

And last but not least, we intend to stay in robust financial and operational health, by winning in the market and taking care of the costs as we do it.

Respect!

I’m proud of our people at Sanoma Learning! I want to thank you again for your good and hard work and look forward to working together with you this year. Respect!