Harvard Business School’s online courses and programs are getting closer than ever to surpassing its revenue from traditional on-campus executive education programs.
In fiscal 2021, HBS Online reduced the difference to just $5 million in revenue. At HBS Online, revenue hit a record $76 million in fiscal 2021, a 31% increase from $58 million a year earlier. Meanwhile, revenue from executive education offerings on Harvard’s campus fell 45% to $81 million. Just two years earlier, Harvard Business School’s executive education revenue was $222 million, more than five times the revenue of its online unit, which had racked up just $43 million. during the 2019 financial year.
Harvard Business School said applications for its online courses rose 112% last year as the school continued its expansion of an online course portfolio and more people took advantage of it. Last year, the number of learners in the school’s online courses was more than three times that of traditional executive education programs. An on-campus Connext event for Harvard Business School online learners last May attracted more than 3,000 learners, many of whom met in person for the first time.
Contrasting fortunes tell the story of dramatic changes in business education fueled by both the pandemic and the corporate public’s growing preference for online learning. These trends led HBS to recently ask Patrick Mullane, who has run HBS Online for seven years as executive director, to take over the school’s executive development group so that everything is under one management.
“The world is blending in nature, so it made sense to consolidate our certificate programs under one leadership team,” Mullane said during a webinar on the future of online education last week. His new role: “How can we push the boundaries in more mixed things that make the most of the on-campus experience with the online experience.”
“To be clear,” he added, “I think there will always be the two extremes, the on-campus learning experience where you come here and attend case discussions in classrooms. class with faculty and your peers and fully online experiences where the defectives don’t interact with you live… Between these two extremes there is a vast universe of things that can be done and that is where we will spend our time exploring in the next two years.”
A record 39,566 learners took online courses at Harvard Business School in 2021
Mullane said HBS Online will continue “to find topics that our audience members think are valuable. We really want to make sure we’re making things that people can use to enhance their working lives and, by extension, the rest of their lives. . And to continue to push the boundaries of technology to help improve the things we’ve already designed and create new things.”
The current course catalog for HBS Online ranges from Economics for Managers, an eight-week course priced at $1,600, to Sustainable Business Strategy, which is only three weeks long and costs $1,400. Harvard offers online courses in business essentials, leadership and management, entrepreneurship and innovation, strategy, finance and accounting, and business in society.
Along with Harvard’s increase in online revenue came an increase in enrollment that set a new record for HBS Online. Last year, 39,566 students took Harvard Business School’s online courses and programs, up from 29,192 a year earlier (see chart below). Five years ago, in 2017, HBS registered only 9,142 students in its online programs and courses. That year, HBS revealed that it lost $11 million on its online operations, which only went black in fiscal 2019.
The 31% jump in HBS Online’s revenue significantly exceeded the school’s forecast and generated an operating surplus for the company for the third consecutive year, according to HBS Chief Financial Officer Richard P. Melnick in the report. school’s 2021 annual recently released. “Through an expanded range of course offerings, HBS Online reached over 40,000 participants in fiscal year 2021. The group has surpassed 122,000 participants since its inception seven years ago.”
HBS expects no Exec Ed income in 2021 due to pandemic
COVID, of course, had a big impact on the results. “The pandemic has forced Executive Education to shift from its all-in-person learning model to an all-virtual portfolio,” Melnick noted. “Designing and implementing such a portfolio from scratch takes time. Given the complexity and time constraints of the task, the initial revenue projection of virtual executive education programming for the fiscal 2021 was set at what seemed like a realistic expectation: $0.”
This turned out to be a very pessimistic forecast. “Although Executive Education revenue was down about 45%, fiscal 2021 was a strong year for the group,” Melnick said. “With all residential programs suspended due to the pandemic, the group quickly shifted gears to provide impactful programming in a virtual format. Over the year, Executive Education designed and delivered 70 comprehensive virtual leadership programs and themes for more than 4,400 participants worldwide.Of the 13,101 people who participated in the programs in fiscal year 2021, 32% were women, a significant increase from previous years.Reflecting the focus focused on maintaining an engaged learning environment, attendees rated the quality of virtual executive education Looking ahead, Executive Education plans to retain and enhance the best aspects of virtual, blended and on-line experiences. campuses to drive sustainable growth across the portfolio.
Despite gains from HBS Online, Harvard’s online operation only generated 9% of the school’s $805 million in overall revenue in fiscal year 2021. Most of the revenue came from the school’s publishing arm, which accounted for 34% of revenue, followed by its $5.3. billion dollars in endowment, which brought in 30% of revenue. Executive Education accounted for only 10%, below the 14% of MBA tuition and fees.
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