How the Value of Educational Credentials Is and Isn’t Changing

The first year after the Great Recession, 2010, marked the historical peak of college and university enrollment in the United States. In the decade since, a popular narrative has emerged that the value of a college degree is rapidly declining. As a new wave of well-capitalized educational technology companies arrived on the scene — including massive open online courses (MOOCs) — it became popular to prognosticate about the disruption of American higher education. Badges earned online would challenge and replace traditional diplomas. Renowned business theorist Clayton Christensen forecasted that half of all colleges may be in bankruptcy within 15 years. Others said the degree was “doomed.”

A revolution in credentialing appeared underway, with colleges’ core product — the traditional degree — about to be swept aside by digital substitutes and disruptive start-up companies. Even more recently, this narrative has been amplified by reports that certain blue-chip companies such as IBM, Apple, and a number of others no longer “require” degrees for certain positions.

Yet by many measures, the value of a traditional degree today is as strong as ever in the job market. Innovation in degree delivery is occurring, but it is often being led by traditional, incumbent institutions, often in partnership with technology firms.

In a national survey of employers that we at Northeastern University recently conducted, a strong majority of HR leaders said that the value of educational credentials in hiring has either increased (48%) or held steady (29%) over the last five years. And, despite some high-profile employers relaxing their baseline educational requirements in a historically tight job market, more than half of all job openings nationwide over the last year preferred at least a bachelor’s degree, according to the tens of millions of job postings tracked by labor market data firm Burning Glass Technologies. This share has been consistent over the last five years. Additionally, the substantial wage premium that employers pay college degree holders remains at historically all-time high levels, according to recent Federal Reserve Bank of New York research. Businesses are continuing to value degrees and reward more educated workers.

Much of this is due to the increase in skills demands in the modern knowledge economy. In our survey, 64% of employers agreed that the need for continuous lifelong learning will demand higher levels of education and more credentials. This is spurring a boom in post-baccalaureate learning, in particular. For example, even before they turn 30, nearly 1-in-10 American adults now earn an advanced degree — double the proportion in 1995.

In a market that continues to prioritize formal educational credentials, the once free-of-charge MOOC upstarts have found a business model — and today it is squarely focused on online degrees and other fee-based educational credentials. MOOC platforms such as Coursera and EdX have transitioned to focus on the thriving online degree business, a market also long-served by publicly traded education companies such as Pearson, Wiley, and 2U. The MOOC platforms that birthed new credential products such as the “nanodegree” and the “MicroMasters” (both trademarked terms) are now competing in the established, two-decades-old market for online degrees — one of the only growth segments in American higher education.

More than 3 million students study fully online in the United States — and notably, 29% of all students enrolled in any type of graduate-level program are fully online students. Today, according to our national surveys, a majority (61%) of hiring leaders view credentials earned online as equal to or better than those completed in person. This acceptance of online delivery has been steadily driven by employers’ years of growing direct experience hiring from, participating in, and sending employees into online university programs.

First-movers like the for-profit University of Phoenix may have dominated the online credential market 15 years ago. Today, however, the key players include institutions such as Arizona State University, the University of Michigan, Harvard University, and Johns Hopkins, among others — traditional and increasingly prestigious institutions who have boosted the credibility of online education. The shift toward digital delivery in higher education may be happening at a slower pace than in other sectors of the economy, but it is well-established and accelerating.

Rather than sweeping away degrees, new types of online credentials — various certificates, MicroMasters, badges, and the like — are instead playing a complementary role, creating the building blocks for newer, more affordable degree programs. This represents true innovation in terms of the fundamental cost inputs (including faculty labor), pricing, and service expectations associated with the delivery of degrees. By leveraging algorithms and operating at truly disruptive price points, these programs are less expensive for colleges to operate and market, and less expensive for the student.

The MBA market offers an illustrative example. In 2016, the University of Illinois launched its “iMBA” program in partnership with Coursera, building an online degree program on top of a stack of existing MOOC courses and certificates. This program is priced at just one-third of the traditional on-campus M.B.A. program cost — $22,000 for the entire degree. Just three years later, the program has grown to 2,000 students enrolled — an exponential growth rate that represents a leading share of the annual net growth in the national online M.B.A. market. This spring, the university announced it was discontinuing its traditional residential MBA to focus its resources on the online version. It’s a decision that may increasingly be repeated.

In a similar fashion, Georgia Tech has successfully scaled its innovative MOOC-based master’s degree program in computer science, priced at just $7,000 and now enrolling more than 6,000 students. As part of this program, the university has notably pioneered the use of AI-based teaching assistants. Other colleges offering MOOC-based, AI-driven degrees — many launched in just the last year — include the University of Michigan, the University of Texas at Austin, the University of London, and a number of others.

Continued technological innovation in the delivery of educational credentials is increasing access to and creating a diverse range of new options for talent development and corporate training. And, as a greater share of corporate learning is also delivered online, the boundaries between education that happens in institutional settings and on-the-job is likely to continue to blur.

Business leaders should recognize that the professional education market is in a period of experimentation and proliferating program offerings. Quality online credentials can be now earned online from many of the world’s top universities, but what a given program entails can often vary significantly. Through evaluation and experience, the market will over time coalesce around greater clarity and standards. Ultimately, employers will be among the key arbiters of value.

The growing digitization of credentials also heralds a new era of greater transparency for educational outcomes — providing more and better data on which corporate leaders can make hiring decisions. With learning occurring online and increasingly being represented in digital credentials, employers should ultimately be better positioned to assess candidates’ and workers’ skills and competencies. This can help optimize college recruiting strategies; the setting of hiring qualifications; and investment decisions about learning and development and executive education.

Finally, the new credentialing landscape and its potential deeper integration with talent strategy is also catalyzing the development of new corporate tools, services, and businesses. The educational technology sector continues to experience multi-billion dollar inflows — and the corporate HR technology market is itself catalyzed by approximately $3 billion in annual investment. It is still early in the development of this ecosystem, but the receptivity of business leaders to new educational credential offerings and delivery approaches will be key in defining the future shape of the market.

Source: HBR SEPTEMBER 20, 2019

Why Asking for Advice Is More Effective Than Asking for Feedback

You just gave a great first pitch to a major client and landed an invitation to pitch to their senior leaders. Now you want a second opinion on your presentation to see if there’s anything you can improve. What do you do?

Conventional wisdom says you should ask your colleagues for feedback. However, research suggests that feedback often has no (or even a negative) impact on our performance. This is because the feedback we receive is often too vague — it fails to highlight what we can improve on or how to improve.

Our latest research suggests a better approach. Across four experiments — including a field experiment conducted in an executive education classroom — we found that people received more effective input when they asked for advice rather than feedback.

In one study, we asked 200 people to offer input on a job application letter for a tutoring position, written by one of their peers. Some people were asked to provide this input in the form of “feedback,” while others were asked to provide “advice.” Those who provided feedback tended to give vague, generally praising comments. For example, one reviewer who was asked to give feedback made the following comment: “This person seems to meet quite a few of the requirements. They have experience with kids, and the proper skills to teach someone else. Overall, they seem like a reasonable applicant.”

However, when asked to give advice on the same application letter, people offered more critical and actionable input. One reviewer noted more specific action items: “I would add in your previous experience tutoring or similar interactions with children. Describe your tutoring style and why you chose it. Add what your ultimate end goal would be for an average 7 year old.”

In fact, compared to those asked to give feedback, those asked to provide “advice” suggested 34% more areas of improvement and 56% more ways to improve.

In another study, we asked 194 full-time employees in the U.S. to describe a colleague’s performance on a recent work task. These tasks ranged from “putting labels on items” to “creating new marketing strategies.” Then, we asked employees to give feedback or advice on the work performance they just described. Once again, those who were asked to provide feedback gave less critical and actionable input (e.g. one wrote, “They gave a very good performance without any complaints related to his work”) than those asked to provide advice (e.g. one wrote, “In the future, I suggest checking in with our executive officers more frequently. During the event, please walk around, and be present to make sure people see you”).

We further replicated these findings in a field experiment using instructor evaluations. In an end-of-course evaluation, we asked 70+ executive education students from around the world to provide either feedback or advice to their instructors. Again, advice more frequently contained detailed explanations of what worked and what didn’t, such as: “I loved the cases. But I would have preferred concentrating more time on learning specific tools that would help improve the negotiation skills of the participants.” Feedback, in contrast, often included generalities, such as “This faculty’s content and style of teaching was very good.”

Why is asking for advice more effective than asking for feedback? As it turns out, feedback is often associated with evaluation. At school, we receive feedback with letter grades. When we enter the workforce, we receive feedback with our performance evaluations. Because of this link between feedback and evaluation, when people are asked to provide feedback, they often focus on judging others’ performance; they think more about how others performed in the past. This makes it harder to imagine someone’s future and possibly better performance. As a result, feedback givers end up providing less critical and actionable input.

In contrast, when asked to provide advice, people focus less on evaluation and more on possible future actions. Whereas the past is unchangeable, the future is full of possibilities. So, if you ask someone for advice, they will be more likely to think forward to future opportunities to improve rather than backwards to the things you have done, which you can no longer change.

To document this effect, we ran another study that was very similar to our first. In this experiment, we again asked hundreds of people to provide feedback or advice on a peer’s job application. But this time, we also asked feedback providers to shift their focus toward “developing the writer.” When removed from an evaluation mindset, by focusing more on developing the recipient, feedback providers were just as critical and actionable in their input as advice providers.

Is asking for feedback always a worse strategy than asking for advice? Not necessarily.

Sometimes soliciting feedback may be more beneficial. People who are novices in their field typically find critical and specific input less motivating — in part because they don’t feel like they have the basic skills necessary to improve. So for novices, it might be better to ask for feedback, rather than advice, to receive less demotivating criticism and more high-level encouragement.

Organizations are full of opportunities to learn from peers, colleagues, and clients. Despite its prevalence, asking for feedback is often an ineffective strategy for promoting growth and learning. Our work suggests this is because when givers focus too much on evaluating past actions, they fail to provide tangible recommendations for future ones. How can we overcome this barrier? By asking our peers, clients, colleagues, and bosses for advice instead.

Source: HBR SEPTEMBER 20, 2019

Research: Quantifying the Cost of Brexit Uncertainty

CEOs in the UK have been spending more than an hour and a half a week on Brexit planning, according to a recent study. CFOs have spent more than two hours. Together, UK executives in those two roles are devoting a combined 200 hours a year, on average, to Brexit preparation. For CEOs, that represents about a week and a half of Brexit planning in a year. But it’s still not clear what, exactly, they’re supposed to be planning for.

More than three years after the referendum, businesses still don’t know what the outcome of Brexit negotiations will be – which means they’re bracing for an impossibly wide range of possibilities, on everything from terms of trade with Europe to immigration rules to domestic regulation.

Economic theory predicts that when firms face a highly uncertain future, they have an incentive to delay investment and hiring and put off other decisions. And two new studies suggest that this is exactly what’s been happening in the UK over the past three years, resulting in substantial harm to its economy.

To measure the impact Brexit has had on the UK economy so far, economists from Stanford, the Bank of England, the University of Nottingham, and the London School of Economics asked more than 7,000 UK-based executives how Brexit has affected their companies. The survey included questions about how much time executives were spending preparing for Brexit, generating the estimates above. The researchers also asked executives how much uncertainty the Brexit vote had created for their businesses. They tallied the percentage of respondents that ranked Brexit as one of their top three sources of business uncertainty and used that figure to create a “Brexit uncertainty index.” In a previous analysis, they demonstrated that over the past three years Brexit uncertainty has only increased, not abated.

Their most recent working paper, published in August, links these survey answers to data on companies’ performance. The higher executives ranked Brexit as a source of uncertainty, the less their business had grown since the referendum. By comparing firm growth pre- and post-referendum, the researchers were able to estimate Brexit’s effects on firms, which are sizable, and use them to estimate the total impact the Brexit vote has had on the UK economy.

“Anticipation of Brexit is estimated to have gradually reduced investment by about 11% over the three years following the June 2016 vote,” the researchers write. They also estimate that productivity in the UK has decreased by between 2% and 5%. (They estimate that Brexit has had a negative effect on employment, too, but this effect was not statistically significant.)

These figures align with recent headlines. In late 2018, The Guardian reported that business investment in the UK was at its lowest point since the Great Recession and the economy shrank in the second quarter of 2019, which The Financial Times attributes partly to Brexit and its effect on investment.

Is political uncertainty truly to blame for all this? Or is it that leaving the EU will be so bad for the UK that businesses are pulling back in anticipation of it? Distinguishing between these two ideas is hard, both in theory and in practice. But one interesting attempt to do so comes from a study analyzing earnings call transcripts, which found that uncertainty has played the bigger role.

In forthcoming research, economist Tarek Hassan of Boston University and his colleagues looked at transcripts of 85,000 earnings calls from publicly listed companies between 2015 and 2019, to see how they were talking about Brexit. Mentions of Brexit on the calls were associated with lower sales, investment, employment, and profitability during that year. But this negative effect was particularly strong when mentions of Brexit were accompanied by words synonymous with risk and uncertainty, suggesting that the damage was caused not just by the prospect of less trade but also by the uncertainty itself.

Taken together, these studies show how policy uncertainty can significantly harm companies and economies. That has implications beyond Europe. Policy uncertainty has been rising globally according to the Economic Policy Uncertainty index, which tracks uncertainty using newspaper reports. That increase is driven by several factors, most notably the ongoing U.S.-China trade dispute, which is shaking up trade relationships around the world. In this sense, Brexit is “the canary in the coal mine for anti-trade movements,” says economist Nicholas Bloom, of Stanford University, and co-author on the first study.

It’s an important takeaway for both businesses and politicians. While pulling back from global trade can cause significant economic harm, including lower productivity and less immigration, the way this is carried out matters, too. If anti-trade movements run a chaotic and unpredictable process, the effects will be even worse.

Source: HBR SEPTEMBER 20, 2019

People & culture make the organization successful- Novartis HR Head

Ravneet Bhanot, Head, Human Resource, Novartis GDD India shared her thoughts on the significance of people and culture in an organization. The senior HR industry leader also shared how HR can bring new value to the business in times of disruption. Read the edited excerpts here.

In an exclusive conversation with People Matters, Ravneet Bhanot, Head, Human Resource, Novartis GDD India shared her thoughts on the significance of people and culture in an organization. The senior HR industry leader also shared how HR can bring new value to the business in times of disruption. Read the edited excerpts here.

How do you create a common culture in Novartis, an organization which is spread across the globe? 

The importance of culture can never be undermined especially for a pharma organization like ours that is at the forefront of innovating medicines to meet unmet medical needs of patients worldwide. Drug development takes a collective effort. It is, therefore, imperative that we have a common culture across all our functions, divisions and geographies that binds people together and drives them towards our common objective of developing breakthrough treatments.  Our cultural aspiration for everybody at Novartis is to be Inspired, Curious and Unbossed. 

We follow a three-pronged strategy to bring cultural aspiration to life. The first is shaping the organizational structures for effectiveness, efficiency, and agility and to reduce multiple layers and bring in more simplicity in the processes. Second is to hire, train and retain high quality, diverse talent capabilities that meet the demands of today and future. The third is to align the individual’s objectives with that of the organization’s because we strongly believe that personal transformation alone can lead to organizational transformation. 

What have been your core people strategy drivers?

Our strategy is based on two key pillars. One is People and Culture: Build a single consistent Novartis employee experience. We believe in creating and promoting #OneNovartis culture. We want to have an inclusive culture that leverages the diverse strengths that our associates bring across different teams and geographies. 

The second is more focused on the business - Organization and Talent. The business landscape evolves with the market. As HR, we need to have the foresight to prepare a workforce that is future-ready.  We need to have an organizational structure, operating model and workflow that can adapt to the rapid changes. We have made sure that all our divisions are more integrated and not operating in silos. As the business model evolves - we have to make sure that we are hiring people with the right mindset and capability. 

How can HR bring new value to the business in times of disruption?

The operating models of pharma are constantly evolving. HR has a crucial role to play in these disruptive times. We need to have the right organization model, capabilities and culture that enables science-based innovations and delivers positive outcomes. Creating an organizational structure is essential which is extremely agile. 

In addition, keeping in mind the emerging need for personalized medicine, we need to enable our associates to understand and embrace these disruptive technologies. HR plays an important role in defining the talent strategy to support long-term strategic business objectives based on future organizational talent needs and the dynamics of the external talent market. 

What steps is Novartis taking to build an environment that supports creativity, collaboration, the performance of their associates? 

To build a creative, collaborative and high performing organization, there are a few levers one must keep in mind. One is definitely culture- we want our associates to be inspired, curious and unbossed. And as I had mentioned earlier, in order to encourage continuous learning and enable our associates to stay ahead of the scientific advances being made across various fields, we have invested in platforms like LinkedIn Learning and Coursera so that our people can have all the learning opportunities they want at their fingertips. 

We reimagined our performance management system wherein we said that we do not want our people to focus on individual objectives in silos, but we really want them to move towards a collective objective. We encourage our people to be more collaborative and work together towards our common goal of improving and extending patients’ lives. As HR, we are making sure that the kind of people we are hiring in the organization are more aligned with the new culture that we are trying to inculcate. 

What are your key focus areas for the financial year 2019-20?

Our culture aspiration will also continue to be our focus in 2019-20. We aim to ensure that everybody at Novartis knows, applies, experiences and sustains our culture in their daily activities. 

To ignite this cultural transformation, we have started our efforts with our leaders. There is a strong correlation between the levels of active engagement in culture change by leaders and the willingness of associates to make a personal change. We want to develop leaders who are self-aware and be aligned with our cultural values and principles so that they act as role models for our associates.

Secondly, we want to activate teams and engage associates by creating awareness about our cultural values. Every quarter we are conducting a survey – ‘Our Voice’ to hear from our associates on what is working and what is not. We want to empower them to ‘fix one thing’ that could lead us closer to our cultural evolution.

Thirdly, we want to improve experiences. Our reimagined performance management system is designed to help us move from individual goals to team-based ones, enable spontaneous robust feedback – with the principle from “anyone, any time”, while building a strong coaching culture. We want our associates at all levels to be the catalyst for change in this year and beyond.

Source: People matters 24 Sep, 2019