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I was introduced to Paul Carlile by friend Kaitlin Dumont, who (among other roles) did her M.B.A. at Boston University’s Questrom School of Business. Paul is Questrom’s senior associate dean, online learning and one of the driving forces behind the Online MBA (OMBA). I continue to think that BU’s $25,000 online MBA is one of the biggest stories in higher ed, and I am excited to dig into the degree and its meaning for our broader postsecondary system with Paul.

Q: First, tell us a bit about yourself. What is your role at BU? How did you become a senior associate dean for innovation at Questrom? And how does your research fit into the online MBA?

A: I have been serving as the senior associate dean for Innovation for the last 10 years. Before my current focus on the online MBA, I developed an award-winning, fully experiential master’s in management studies for BU, launched in 2015. In 2016, I built a problem-focused executive education program for IBM around digital transformation. My first foray into online education was developing a highly successful Micromaster’s in Digital Transformation with edX in 2017—which then directly led to the initial conversation to develop the OMBA program with edX in 2019.

The common element across these diverse projects is my research. I am an innovation scholar and see learning as the development of knowledge to solve problems. I see collective learning, specifically, as a means to get close to problems and drive innovation. For me, educational programs that are experiential, embedded and business-problem–focused have a similar orientation, whether it is a class of 20 executives from a company or 500 adult professionals in a virtual setting.

When it came time to consider a new model for an online MBA, we recognized the chance to build a new paradigm for business education. The challenge was getting the paradigm to fit in our business model at a very affordable tuition rate. To attract 500 people in a virtual classroom was a volume challenge, but also an opportunity to construct a learning network at-scale. Here, I leaned into my other research stream around open innovation. Open innovation recognizes that the expertise to solve problems is distributed throughout a network of interested people. The task is to gather and connect that network, orient them toward mutual problems, and then teach them a common language and shared methods so they can develop solutions that create value in their local context.

This is how the collective learning network at-scale was born. The challenge that remained was changing the historically dominant teaching model inherent in many traditional MBA programs that is delineated by disciplinary silos (Marketing, Accounting, Operations, etc.). That approach emphasized individual learning focused on problems defined by disciplinary experts.

Q: How does BU pull off a $25,000 online MBA? How can this price point support a quality degree program? Can you help us understand the economics behind this program?

A: The answer starts with what I described above. By framing the challenge as an open-innovation problem, we harness scale to make it work—and scale is what makes the economics work. This is how we at OMBA achieve what we call quality at-scale. Our market segment—the adult learner aged 35 and older—wants three things: first, a problem-focused curriculum where they can see immediate relevance in their jobs; second, advancement in their current company or industry; third, a more general, integrated business knowledge that complements their current specialized knowledge. Instead of offering the typical 22 specialized, core versus elective three-credit-course, we offer six, eight-credit courses focused on contemporary business challenges taught by cross-disciplinary faculty teams who integrate core, elective and disciplinary knowledge.

The other advantage we offer is that all students work in teams (a “dense” learning network), and in those teams, students gather valuable insights from a very diverse set of professionals spanning every conceivable function, industry and time zone. In addition, we use a social learning tool that provides visibility into the context, problems and solutions across a large professional learning cohort of 400+ students who share a common language and cadence.

Overall, we are a unique value proposition to the adult working professional.

One way to think about our very positive economics is to recognize that this isn’t just online education, but a digitally transformed way of delivering a high-quality service. Digital transformation always requires scale, integration and leveraging distributed expertise. That digital technologies are inherently network-based, scalable and allow for mass customization is the comparative advantage. Overall, we are a unique value proposition to the adult working professional. Q: Is BU resetting the pricing structure for master’s degrees? Are low-cost, scaled online programs the future of the master’s degree? If so, what will this mean for universities that have been increasingly relying on surplus margins from master’s degrees to make up for revenue shortfalls for their undergraduate programs?

A: This is the hardest question for me to answer. Our novel approach to developing a high-quality learning network at-scale requires significant change of behavior from faculty, program development, delivery, and of course, from university leadership. In other words, “You can’t get there from here.” So yes, we are resetting the pricing structure for the master’s degree, but also transforming it significantly. We have an addressable market, a segment that is scalable enough to make the economics work. Our value proposition to this market of adult learners is problem-focused, peer-based learning. We provide a pedagogical and faculty approach that supports this problem-focused, integrated, peer learning model. We’ve built a delivery process with supporting technologies that makes all this work at scale.

In short, because of the way OMBA operates as a new model for education, it generates strong revenue for Questrom and Boston University. But to get there, we had to go on a significant journey of transformation.

I often end my conversations with other online educators by posing the following question to them: “Is high-quality graduate education artificially scarce in the U.S. and in the world?” The answer is always yes. Many have addressed this scarcity by making graduate education more accessible to those who cannot come to a university by putting it online. Next, a few have taken the additional step to address this scarcity by making graduate education more affordable (for example, our OMBA tuition is four times less expensive than the average traditional tuition rates). The remaining source of artificial scarcity is the unwillingness to change the faculty, pedagogical and administrative models of education. The Questrom School of Business OMBA is one example of addressing all three facets of this artificial scarcity.

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