SPB-MOOCS

A short post on something I would label SPB-Moocs: Solo Projects (which) Become Moocs.

In one of our most watched discussion shows, De Wereld Draait Door (As the World Turns) two teachers were interviewed, who have a YouTube channel, one on history, the other on chemistry.

With simple instruments, they both make YouTube video’s, preparing students for their exams.

Both told the interviewer that they originally started with the video’s because they wanted to use the time in the class room to discuss problems and concentrate on discussions rather than tell what’s in the books. It came as a surprise for them that so many students used their video’s as preparations for the exams. In the program students tell that they don’t use the materials of their own teachers any more, there is even the tale of one teacher who uses the video’s instead of teaching himself.

In Europe and the VS, governments and private companies finance platforms, university staff discusses the pro and contras of developing and using open and online courses. The papers and journals dedicate special issues to this phenomena. Yet, some teachers just take a camera and a whiteboard and start their own channel, without large financial claims (although they did argue during the show that some financial support would be nice). And they are not alone, given the next Dutch blog: http://www.newmediabrains.com/news/124/68/6-docenten-laten-klas-flippen-in-YouTube-lessen/

So, suddenly some individual project aimed at 20 – 25 students becomes a YouTube channel watched by 15.000 – 175.000 student: designed to be a small project for a small audience, became a open online course which is viewed massively.

It would be interesting if people could point to other initiatives in the comments, it would be strange if this development was a pure Dutch development.

Perhaps something to come back in the future?

Value, effort and education.

Upon the education of the people of this country, the fate of this country depends. Benjamin Disraeli

Value, effort…………

In modern business economics, there is a realization that is not so much the organization which creates value, but the organization makes an value offer and the realization of this is in the usage of the product or service by the customer.

In traditional approaches (as still in can be seen in the tax system: taxes on value added), when inputs are transformed during each sequential stage, the efforts of the firm are seen as adding value to the product. Taxes are levied on this effort, measured by the costs of the labour and capital used.

In the transformation of grain into bread, the labour of the farmer, the miller and the baker are seen to increase the value and so the price of the outputs. Yet, if the bread is not sold and thrown away at the end of the day, does all this labour add to the welfare of society? The realization of the potential value in the offering is the appreciation of the customer, in the case of bread this is shown by the price paid for the bread. This appreciation will be different in different situations. In countries with a shortage of foods, a simple bread will be sold, whereas in countries with a lot of possible substitutes, simple bread will not be valued highly. Doubling the inputs (efforts), without changing the quality or characteristics of the bread will not increase the value.

More difficult is it to determine the value of art. However,it should be clear that it is not the level of effort which determines the fact if something is valued as a work of art. Yet, the reverse is -of course- not true: most artistic work will require hard work. Thinking about the way the artistic level of something could be determined, I think it is not the price paid on the free market, or the opinion of experts but the effort of people to preserve it. At least, the efforts and costs invested in preserving art over the centuries is a better approximation of the value for society, than the money invested in making the object itself.

From The Picture of Dorian Gray

…………………….  And Education   We see different trends appearing at this time:

  1. The success of Moocs, measured in participation,
  2. The expectation that (commercial) distance education providers will have a destructive influence on the sector as described by Christensen and others, and
  3. The financial problems of different governments, where the examples of California and Greece show that education is one of the first sectors which will suffer.

The success of the Moocs can be interpreted in different ways:

  1. As a rise in demand for education which is not supported by a rise in income;
  2. A demand for training increased in the last years due to the economic crisis.

Related to the success of the Moocs is the concept of disruptive innovations as used to forecast developments in American education by Christensen and others. The success is partly explained by the price (free for Moocs). The prices for education will decline because of the separation of research and teaching: concentration on key activities being a central theme in disruptive innovation. The idea of cheaper or even free education is, of course, attractive to governments which have budgetary problems. Especially when education is not a top priority for local and national governments with liquidity problems. To summarize, learners and financers of education substitute traditional education for cheaper and free alternatives, a tendency which only will become stronger according to Christensen and others. In terms of the new business economics as described above, the key stakeholders in education refuse to create the value, offered by the efforts of the educators. Rephrasing this, the value offer of the educational institutes may not be acceptable or affordable for the stakeholders. The value of education is determined by the usage by the learners of the learned competences and knowledge. In general, we can distinguish two extreme approaches to the effects of education.

1.  At one side of the spectrum, education is seen as an important factor increasing social cohesion, democratic participation and (economic) welfare. For example, the European Union writes in the evaluation of the Lisbon Agenda:

Underlying this was the realisation that, in order to enhance its standard of living and sustain its unique social model, the EU needed to increase its productivity and competitiveness in the face of ever fiercer global competition, technological change and an ageing population.[..] These ambitious targets could only be achieved through structural reforms to tackle a number of challenges within Europe’s labour markets; tackling labour market segmentation, addressing skill needs through more and better education and training, promoting a lifecycle approach to active ageing, and inclusive labour markets. […]Education and skills policy is at the heart of creating a knowledge-based economy, but it is apparent that the EU has some way to travel in this regard.

2.  The approach on the other side of the spectrum emphasis the economic effects, especially for the individual who becomes more competent. Education, in this view, primarily produces individuals which are more competent in their work, increasing employment by a better fit between demand and supply in the labour market. More productive workers will earn a higher income and firms will earn their firm an additional profit.

In the second view, employers, employees and learners are primarily responsible for financing education as the value will only partly crystallize in the form of additional income for the learner and the employers. The broader approach of education puts part of the responsibility with society: government has incentives to finance at least the general competences of the learners, through educational subsidies. Again, effort will determine quality but rise costs, but when demand shifts to other alternatives, much of the effort will be lost. Problem with disruptive tendencies in the sense of Christensen et al. is the “catch-22” between costs and demand, which results from the move towards quality which is the standard response of all organizations in these situations. Traditional education wants to take its social responsibility, teaching collective social competences next to functional content based on research efforts. However, if society doesn’t want or can pay for this kind of education, it will end up with purely functional education, paid for by employers and employees and aimed totally to an efficient fulfilment of jobs and the furthering of individual careers.

The business model of not-for-profit organizations

Solving the big issues of our generation requires bold new business models  
Osterwalder and Pigneur (2010, 265)

In a short time span I encountered two views on the usage of business economics in not-for-profit situations. Firstly, the quote above this blog, in which Osterwalder and Pigneur(2010) claim that a business model approach could help solve present day global problems. Against this, Thompkins(2005) argues that inefficiency is an important characteristic of the public sector as it is the effect of the necessary democratic process and the required transparency of processes in this sector, or as the title of his article says: The distinctive context of public management; implying that there are different kinds of management.

In our view this seemingly contradiction is based on a misunderstanding of the concept of the business model. Although it is developed for analyzing and developing models in the for-profit sector, it is about the creation and deliverance of value. So if transparency is an attribute of the public sector, it should be represented in a business model describing a specific public organization.

This is the challenge Judith Sanderse and myself have taken on. We agree with Osterwalder and Pigneur(2010)  that the business model, and more specific the Business Canvas, can be used to increase the efficiency and effectively of all kinds of organizations, including not-for-profit ones. Hence, the main objective of Judith’s research was the development of a specialized business model canvas for NGOs. The central research question of this study is ‘how is a NGO business model canvas structured?’

 However, by using the Business Canvas for analyzing not-for-profit organizations, we have to take two tings in account:

1. the definitions of terms in the general business model will not be recognized by the managers and employees of these organizations and sometimes even lead to resistance to use the Canvas;

2. given the specific functions of these organizations, the Business Canvas will have to reflect the different attributes of these organizations to increase both the usability as the acceptance of the models.

Judith Sanderse did analyze the potential usage of the Business Canvas in the case of non-governmental organizations. To do so, she used three steps; firstly using the literature (especially that on social enterprises) to adjust the ‘Beyond-Profit-Business Canvas (see Osterwalder and Pigneur, 2010, 264-265), proposing an adjusted model for not-for-profit organizations.

Secondly, she interviewed several experts, to see if the model was usable in terms of form and variables. From these interviews she concluded that the Business Canvas should be adjusted. Different business models have to be used for foundations and ngo’s (see the figure below).

bc_Sanderse

Furthermore, the definitions have to be adjusted and clarified. In the table below the definitions as used are given.

Key definitions
Business model A business model describes the rationale of how an organization creates, delivers, and captures value.
Vision Outlines what the organization wants to be. It can be emotive and is a source of inspiration. For example, a charity working with the poor might have a vision statement which reads “A World without Poverty.”
Key Partners The network of cooperative agreements with other people or organizations (including governments) necessary to efficiently offer and distribute the organisation’s mission and programmes.
Key Activities The main actions which an organisation needs to perform to create its value proposition.
Key Resources The physical, financial, intellectual or human assets required to make the business model work.
Value Proposition The organisation’s mission, its main programmes and brand.
Mission Defines the fundamental purpose of an organization, succinctly describing why it exists and what it does to achieve its vision. For example, the charity working with the poor can have a mission statement as “providing jobs for the homeless and unemployed”.
Relationships The type of relationship the organisation has established or wants to establish with each key beneficiary or donor segment.
Programme delivery methods The method which the organisation uses to achieve its mission or programme activities to the beneficiaries.
Ultimate Beneficiaries The target group who the organisation principally aims to reach and serve to achieve its vision/mission.
Channels The methods of communication, distribution and sales used by the organization to interface with its customer/donor segments.
Customer/Donor Segments The different group of customer and/or donor segments which the organisation targets for its fundraising activities. In this component customers tend to be more related to the merchandising section of the organisation and donors tend to be related to the fundraising section of the organisation.
Revenue The income streams, this could be donations, merchandises/sales, investments or other income streams available for the organisation to work on its value proposition.
Costs The total expenses which the organisation incurred (or will incur) to implement the agreed activities.

Lastly, the adjusted model was used to analyze five NGO-s through interviews with key-managers of these organizations. The split business model was recognizable and usable according to these managers. Functioned mentioned where:

    • Understand the dependencies of the separate elements
    • Change process
    • Visualization of the organisation
    • Staff induction
    • Communication, both internally and externally
    • Alignment

Yet further research should follow the usage of the model in describing and analyzing the workings of the organizations, to see if it is possible to improve or even change the way they try to realize their goals.

Yet, despite the ultimate goal of the organization, be it the public good, education or income for the stockholders, it will require money to make our world go round.