EDU: How and why did Harvard Business School get into the business of publishing?
Maureen Betses: We were established to provide greater reach for Harvard Business School (HBS) content and intellectual property. In the early days, there was always this discussion that the cases were the crown jewels of HBSl. Do we really want to give them to other schools? In the end, the Dean and the faculty decided that the school should be about reach and we would distribute cases in a big way. Informally our cases and the Harvard Business Review were already being distributed. Around 1995, then Dean, McArthur, thought it silly to have three separate activitiescases, HBR and the press which was publishing booksand he decided to bring them all together under one company.
It was also decided that we wanted it to be a real publishing company. We wanted to provide reach for Harvard, but we didnt want it to be a vanity press. Thats why publishing was established as a separate company and though its a subsidiary of HBS, it operates a little separately from HBS. HBR for instance hasnt just articles by HBS. It is by various subject matter experts from all over the world. Its the same with the cases. We carry, about 20-25 case collections of other schools. So that academics from all schools can really come to one place and find collections that are vetted by Harvard. What we are trying to do is provide a place where business educators can come and know that they have quality education materials in one place.
EDU: The company is not for profit, so how does it sustain itself? Is it supported by endowments ?
Maureen Betses: We are not supported by endowments. In fact, it is the other way around. We dont create profits, we create what we call contributions and so anything that is left over after paying the bills goes right back to the school. We see it as a circle of virtue. We are funding the content that we are selling. We like that it works that way and Harvard is able to do a lot more because the extra money that we make goes right back to them. We decided long ago that we are not going to use grants because it is very hard to write a case that is neutral if you have somebody else sponsoring it.
EDU: But we constantly hear of losses that university presses suffer. Why? And how does your company do so well?
Maureen Betses: Well, it is really hard to build an infrastructure for publishing. It is especially difficult to build an infrastructure for case writing and publishing. To build the mechanism that writes the content and the mechanism that distributes the content is very expensive. So if you dont have that infrastructure, then it is tough to make money. Lots of schools have tried and failed. Harvard was lucky because it already had cases and the HBR business. And then they decided that they would build not just an academic press but a publishing company. It is very different. We are fortunate that we are affiliated with Harvard because we can take advantage of their services. It helps us attract the best employees because Harvard has things like great insurance plans for all their employees and we can take advantage of the infrastructure if required.
EDU: But you also publish books like the rest of the university presses.
Maureen Betses: We publish trade books about business, not textbooks. I am glad that we are not in the textbook industry right now because it is not doing well. Professors are no longer using a full textbook. They still want the material in the textbook; they just dont want it all. Students very often are forced to buy the whole book and then the professor uses half of it. So students get irritated, professors get irritated, schools get irritated. This puts our business in a very good position because all the materials that we sell to education are in bitsa case, an articleand it fits into what we call course-pack. Business education is done through course-packs. Professors are able to pick and choose what they think is the best for the course that they are teaching and students buy materials from all over the place. Textbooks started participating in what we call custom course-packs. So if somebody bought a custom course-pack they could buy a chapter. It could still be fairly expensive but at least the material was being used. Technology has made it easy to buy in pieces and put it all back together. This has really given textbooks a run for their money. It will be interesting to see where text books go.
EDU: Where do you see the business of publishing going?
Maureen Betses: We have seen a change and it has only begun. Academia, when it comes to adopting digital models is behind corporate. Businesses start to read and even educate online and then the schools will follow, but it takes a long time to do that. Now this change is happening exponentially. All of a sudden it sort of just takes off. Years ago we sold physical copies of cases and we started a permission order whereby schools could buy a clean copy of the case and make their own copies and they would pay permission pricing for that. Physical copies of cases and permission copies were almost equal parts of our business. Now we hardly deliver any physical copies. You couldnt even measure what portion of the business it is. Its all gone digital. All of a sudden you just look around and there is no more physical business there. It will be the same with textbooks thanks to the tablets accelerating everything.
EDU: What should an Indian university wanting to get into the business of publishing do?
Maureen Betses: They will have to research and really understand what they need because, like I said earlier, a group publishing company requires a lot of infrastructure and a lot of investments and most universities cant afford that. Even the endowments that you get are for very specific things. It is not like you can take an endowment and spend it on whatever you want. Its the same at Harvard. A few years back during the decline, even Harvard was one of those who saw a real dip in endowment. They couldnt just use what was left to fill the hole. So they had to live through that just like everybody else. You have to invest and get the money somehow to be prepared for such eventuality. It takes time, you have to keep going. You have to build content. You have to build a reputation. You have to encourage your faculty to publish.
EDU: How are you involved with the higher education sector in India?
Maureen Betses: We are interested in supporting business education in India. India is growing and Indias business is growing and we want to be a part of that. If we can influence that in a good way, then we would like to. When we entered the market four years back, there was a lot of interest in our materials and it was rewarding to know that. The case method is a different way of teaching business. It is a lot about the students and about peer-to-peer learning and how a professor facilitates and encourages that. One of the first things that we do when we go into a region like India is make sure that we provide opportunities for professors to learn the case method. So we have a lot of seminars on case method teaching what we call participant-centred learning. It is a very successful programme around the world and we have always fallen short of seats. We havent done these seminars a lot in India up till now.
EDU: Do you have more India-based case studies now?
Maureen Betses: We have certainly created a lot more. Mostly because India has a bigger presence in business than ever before and we have a lot of native born Indians among our own faculty. They feel that it is an area that is impacting the world and we should be there. And they are right. This has really pushed us to participate in Indias business education.
EDU: Is there any difference between how your offering is received by public and private institutions?
Maureen Betses: Institutions approved by UGC dont have the freedom to choose their own curriculum as they are bound by regulations. The AICTE approved institutions, dont have much freedom either, but they can blend their programme with extra content and some of them are including the case teaching method. Autonomous institutions like the IIMs, are welcoming this pedagogy route. Private institutions like SP Jain, Narsee Monjee, MDI, Apeejay and Galgotia Business School are very receptive.
EDU: Is the Indian market significantly different?
Maureen Betses: Theres not a whole lot of difference. Everyone understands what Harvard is all about and that it teaches the case method. So we dont need to position the school. It is more about educating about the case study method and why it is an important pedagogy. Moving from lecture pedagogy to case teaching is a skill that someone has to acquire and when they do that they usually find that it is worth it.
EDU: What makes the case study method so engaging?
Maureen Betses: Case teaching is very engaging for students because they get to practise what they learn and thats the best way to learn. It allows you to put yourself in the position of the manager in the case and thats a little bit different than a lecture as it allows you to learn from your peers.
When a teacher has been teaching something for a very long time they forget what it is like to learn it. When a fellow student all of a sudden gets it, he can tell another student how he got it. Thats what peer-to-peer learning does. It has a lot of impact. So a combination of having a subject matter expert and peers talking about the experiences is extremely powerful. And then if you bring it to another level, you can use simulations.
EDU: Why did you start offering simulations?
Maureen Betses: When we had started we did not make our own products. We took products from HBS and from other parts of our company and offered them to our higher education audience. We did well, but realised that the audience wanted something more and we had to make our own products. When we set out to research on the products that we should be making two things floated to the top. One was shorter cases as the fastest growing programmes for almost all schools were the part-time Executive MBAs. And of course, who is going to those? Well, it is people that are working. They dont really have the time to read 30-page cases. The other thing that came up was simulations. Back then they didnt quite know what simulation was. They just knew that it was electronic and they wanted to dip their toe in electronic products.
The market at that time had some very light simulations that had a lot of impact. And then there was another set of simulations that were heavy and would take the entire duration of the course to complete. What was needed was something in between. So when we started to build simulations, we decided to put in a seat timethe time that a student would actually spend on the simulation. We decided to have a seat time of 90 minutes which is a typical business class and based the simulations on concepts that we felt lent themselves to graphic demonstration. So the simulation brought value and wasnt just a matter of entertainment. The students get to practise what they are learning.
EDU: Could you explain how these simulations work?
Maureen Betses: So for instance the pricing simulation that we built teaches students about what kind of influences affect pricing. It enables them to set pricing in different environments and then see what happens in the market place. You pull a lever and see how customers and the competition react. You may see a tit for tat reaction from the competition and the prices go up. Thats not good. Or you will see some competition hold the price steady. How far can you go if they are holding steady? The professors complained that there were so many things going on in a simulation in the markets at that time that in the end they didnt learn as much as they should have and the reason that they didnt was because they couldnt draw the line between cause and effect.
I pull this lever over here and had no idea which one it affected. So, we made sure that cause and effect was very clear in our simulations. That is why the market place likes it because it teaches something that is very compact and it teaches it in a way where students get it. So if they pulled a lever over here and didnt like the effect, they can do another round and see what happens if they change the strategy? Simulations became a great way to really complement the case method.
EDU: Do you think simulations could take over the case study method in the future?
Maureen Betses: I dont think so. I think that you are always going to see a hybrid. I really do believe that because there are some things that are just learnt better face to face. There are certain nuances that are tough to show through simulations and then there are things that are fun and easy to teach in a case that you want to continue to teach through a case and a student would want to learn it that way.