Efficacy in Education

Pearson Asia Pacific MD David Barnett speaks at the Chartered Accountant ANZ Business Forum

International Convention Centre Sydney, Monday 5 June 2017


I want to start by telling you a story about my Dad.

He was born in Narromine in far central west New South Wales. His Dad died when he was 18 months old and he and my grandmother had to work out what to do.

His mother packed him up and moved to Sydney, where eventually he got the opportunity to study at Sydney Tech, became a quantity surveyor, pivoted, got his PhD, and now, he is a world leading expert in the New Testament. A role he loves, and for which he is widely respected.

A good education transformed his life. I’m sure we all have stories like this.

The transformative power of education is why I work at Pearson.

Pearson is the world’s leading learning company with around 35,000 people in about 70 countries with annual revenues of around $8billion. I run the Asia Pacific business which includes Australia, we have about 600 people in the region.

We have a saying at Pearson.

Our profits may sustain us, but they do not define us.

Like the theme of this summit, our purpose is beyond profit. It is to help people make progress in their lives through learning.

David Barnett

Over the past 150 years we’ve mostly been a publisher of textbooks. While we know you can get a great education reading textbooks, we could never really tell how well text books work.

But with digital transformation, now we can.

I’ll get into that in a minute.

First I want to tell you our two very big commitments we have made in recent years to bring our purpose to life.

Purpose beyond profit.

From next year, Pearson will start annual reporting on the efficacy of our flagship educational products and services. The same, externally-auditable way our finances are.

And from 2025, Pearson aims to positively impact the lives of 200 million learners annually.

I’ll first tell you how we came to these commitments and then I’ll tell you why.


Through the significant contribution of Sir Michael Barber.

Sir Michael is best known for heading up Tony Blair’s behavioural insights team, or nudge unit.

Up until very recently Sir Michael was Pearson’s Chief Education Advisor, responsible for making sure the products and services we make live up to our purpose.

He introduced efficacy to us.

We define it as a measurable impact on someone’s life through learning.

Of course, we’ve borrowed the concept from the pharmaceutical industry, where they must demonstrate the efficacy of drugs and treatments so patients get better.

Efficacy is the difference between life and death in health care.

We think that this should be the same in education. Ok maybe not life and death - but the difference between a bad life, and a good one.

David Barnett

If we get it wrong, we’re not just stuffing up someone’s calendar or making them late for a train - we are impacting their future and whether or not they can achieve their hopes and dreams.

We take this responsibility seriously.

So how are we going to meet our annual reporting commitment?.

It began in 2013.

We gave ourselves a 5 year lead time because we knew we’d need it. The amount we know, compared to what we knew in 2013, is stunning.

And we made the commitment public back then to put us on the hook.

Our initial results won’t present a perfect picture.

As a company, we need to be OK with that. But it will present the work we’ve done and the progress we’ve made.

And how in the world are we going to to reach 200 million learners a year by 2025?

That about doubles the number of learners we reach now.

We will do this in three ways. I’ll explain them in the context of my Dad’s life.

1. Improving access - you can’t get a tertiary education in Narromine, lucky my grandmother moved to Sydney.

Pearson can increase access to education through our partnerships with universities to white label their online post graduate programs.

Right now there are people in far flung places in Australia or at home with kids getting a psychology degree from Monash or an MBA from Griffith University, powered by Pearson.

2. Increasing success - my Dad worked hard and passed his exams, eventually earning a Masters and a PhD.

I imagine you are all familiar with NAPLAN - we provide operational support for a number of states to print, distribute, scan, and mark the tests.

While it’s not without controversy, we need to assess our kids in some way to ensure their they are achieving the right levels of literacy and numeracy.

3. Advancing progress - from an isolated country boy to world leader in theology. That’s a giant leap using the power of education.

Pearson is constantly investigating the skills needed for the jobs of the future, and our content is always changing to meet learners needs. Because in most cases the end goal of education is employability.

Imagine that: 200 million students. 200 million jobs, or doors unlocked, or hopes realised.

Here is some practical advice for companies seeking to do similar to Pearson: you need strong leadership, alignment at the highest level, and time to work out what you need to do and how you need to do it.

So I’ve just talked about the how. Now let's move onto the why.

Did the government demand it of us? Did our customers? Shareholders?


We demanded it of ourselves.

We choose to focus on the ultimate recipient of education, the learner.

In a world where companies are becoming more “customer centric” we are taking it one step further.

In education, the learner is not always our customer. We often sell through distribution channels, to schools, teachers, academics and parents. Our customers want the best for their students and we do too.

So, why focus on the learner when so often they are not the ones paying us directly?

Because they are the ones who benefit the most from a Pearson product or service that works. And if they are happy, our customers are happy.

The other reason we introduced efficacy is for the benefit of our own staff.

I mentioned the impact of digital transformation on our business earlier - we share the same organisational change issues with this transformation as I expect a lot of you do.

Let me put the “why” for our people this way:

The recent federal budget has sought to cast debt as either ‘good or bad’. It’s copped a lot of flack but there’s also a story to be told there.

I think we can view organisational change initiatives in the same way: good change and bad change. Or, put more simply: change that unsettles, or change that inspires.

While there are some sceptics, internally, efficacy is ‘change that inspires’.

Change theory is entrenched with the thought that companies need a ‘burning platform’ to change. What if you could also have a ‘burning purpose?’

What if all change wasn’t driven by the sole need to cut costs and become more efficient?

When you look at this picture - do you feel inspired to stay on that oil rig or get off as quickly as possible?

Oil Rig Platform

Like many companies Pearson has undergone massive transformation over the past several years as we move from a traditional publishing company to an education company.

Here is our business strategy summarised.

Our strategy as an equation

Strategy equation

We’ve come a long way in 150 years.

Some of this change has been hard.

But some has been inspiring.

Mostly because of efficacy.

For a company comprised of former teachers, instructors and administrators, efficacy is the ‘get out of bed’ we need to keep striving to do better for our learners.

And we are the first education company to do this.

So we’ve talked about why. Were there any “why nots” around the boardroom when this was decided in 2013?

There were - mostly because of the huge upfront costs required to measure and track efficacy.

Here and overseas we have teams of educational researchers, data strategists and analysts working with product teams and business owners to embed efficacy in all our new products and services.

And there is a huge cost in adapting our existing products to capture the required metrics.

An investment of this scale is not for the faint hearted.

Especially when new, aggressive competitors are entering the market, like the recent wave of ed tech start ups ready to pivot.

And we’re an 800 pound gorilla who finds it difficult to even make a right turn.

While direct return on investment is difficult to articulate, the lost opportunity cost of doing nothing is clear.

I’ll give you an example of one of our innovative new products to illustrate this.

Pearson Lightbook is an interactive digital platform used in Australian schools that lets teachers see how their students are learning and progressing. Light years ahead of what a textbook can do.

It has a dashboard so teachers can see who in their class is understanding something and who needs more assistance.

Although Lightbook is a new product, it has been designed in a way that, over time, we can identify things like common misconceptions, set predictives and suggest and measure interventions - based on the individual student’s need - to help them grasp something that they otherwise may have missed.

So in the end, the pluses outweighed the minuses when it comes to efficacy in education.

If we wanted to live up to our purpose - to help people make progress in their lives through learning - we had to look beyond short and even medium term profits.

To put it another way, if we want to stick around for another 150 years, this 800 pound gorrilla needs to eat kale and practice crossfit.

I hope I’ve laid out for you the how and why we introduced efficacy into our education business.

And we’re not precious about the idea - we hope it spreads to the industry more broadly.

I’ve already drawn the parallel between us and the health sector. But there is a huge chasm between us when it comes to efficacy.

I’ve talked to many leaders in education who use the following analogy - which I will use to conclude my remarks.

You hear a lot of talk about going ‘back to basics’ in education. But when it comes to health, no one talks about the good old days of medicine.

I doubt anyone in this room would get their tonsils removed at a hospital that opened in the 1930s and hasn’t changed since.

Why would you want your children educated in a pre-war classroom?

I believe that education companies, like Pearson, have an important role to play in supporting instructors and institutions as they grapple with the changing needs of students and seek to meet the demands of the future workforce.

We need to understand what we know, and don’t know, and commit to improve over time.

Already, we’re seeing the word ‘efficacy’ appear more and more in education which I find very encouraging.

Pearson is committed to efficacy, to purpose beyond profit.

This is very much aligns with our values ‘Brave, Decent, Imaginative… and Accountable’ and that makes me proud to work here.

Thank you.

David Barnett

David Barnett 

David has worked in the education industry for the past thirty years. He has worked in a variety of senior roles supporting customers in schools, higher education, vocational and career development, across the region.

David was appointed Managing Director of Pearson Australia in 2002 and Pearson Asia Pacific in 2016.

He is responsible for helping manage the transition of Pearson’s business from analog to digital & services, with a focus on outcomes.

He is a graduate of Macquarie University, MGSM and the Australian Institute of Company Directors. David is a Director of the Copyright Agency and is Chairman of Robert Menzies College. He lives in Sydney with his wife and three sons.


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