I joined at a time when the education and publishing industry globally and in India was undergoing a transition; similar to what happened with the music industry when there was a wave of digitization and internet. Being market leaders, we had the unique opportunity to define how the publishing industry will transform and we have done very well on the digital transition.
How has been your journey with McGraw Hill so far? What are the major changes within the company that you have observed over this period of time?
It has been an exciting journey with McGraw-Hill, one with lots of challenges and opportunities. I joined in October 2005 and in the last 8 years we have more than doubled our revenues and more than tripled our operating profits. We have expanded our markets to touch close to 20 million learners annually.
Since India is a price sensitive market and we need to price our products as per market standards, we prefer to measure our success not just by our top line, but also by the number of learners we reach and the kind of market position we have. We are predominantly a higher education content company and are the market leaders in that category. We also operate in the professional space where we have learning materials for working professionals who need to update themselves to further their careers. We have a Test prep division where we are dominant and growing very well. In the K-12 segment, we are currently establishing ourselves where the market is very fragmented.
I joined at a time when the education and publishing industry globally and in India was undergoing a transition; similar to what happened with the music industry when there was a wave of digitization and internet. Being market leaders, we had the unique opportunity to define how the publishing industry will transform and we have done very well on the digital transition. It has been a really exciting journey for me: the company has grown and I have learned tremendously as a professional.
For a market leader to continue growing is a bigger challenge than a startup with a small base. To keep growing when we are already a large player, was a challenge. The second challenge was that before I had come on board, the company was not very focused on profitability and that was a mindset change that I needed to drive initially. We have also become a lot more data and number driven now and every employee clearly understands the impact his efforts have on the organization’s success.
Another challenge was that our stakeholders believed that India as a market would be the slower to adopt the technology wave and we should wait for our other developed markets like the US, UK, Europe and Australia to first experience what it takes for a publishing company to go digital. I had a different perspective that just as mobiles helped us leapfrog into digital telephony, similarly, India will leapfrog with the digital content and education. We needed to be strategically prepared on how we will participate in this transition. We discussed this in one of our leadership offsite meetings and took a strategic call that we will be the ‘first mover’ innovators in any digital segment where we believe there is funding and a known revenue pool and we will be a very ‘fast follower’ and a rapid innovator wherever there is no visible revenue pool and the business models are still evolving. We have started digitizing our libraries and converting our existing book content into e-books, organizing them into subject clusters and hosting them on a technology platform that delivers a superior experience for a reference reading and research for library users. These initiatives have been received well in the industry and we have become one of the largest markets within McGraw-Hill International in terms of marketplace revenues. There are some other ideas that we are currently piloting like mobile phone and tablet apps for test preparation. The big challenge, therefore, was lending strategic clarity in an environment of flux when the entire industry was transforming.
How is India as a market compared to other International markets for McGraw Hill?
McGraw-Hill recently engaged a global renowned consulting firm to help us do a strategic review of all our markets and we categorized our markets by way of market potential i.e. investments in education, sector growth, education spending as a percentage of GDP and spending on education as a percentage of household budget. On the other axis we took our market position in terms of growth, operating margins, share, market penetration and competitive position. It was observed that out of all the markets in the world, we came out as the most attractive market because there is a lot of room to grow as the education sector still requires massive investments to reach global levels of enrolment rates and our strong market position. We have made a very strong case within McGraw-Hill Education that India is one market where we need not be just an education content company, but can also be a complete education services provider where we can be a deeper partner with the education system beyond content and digital platforms.
What has been your single biggest challenge at McGraw Hill till date? How difficult has it been managing expectations of various stakeholders?
My single biggest challenge was aligning my people, especially my direct reportees to a growth agenda, having strategic clarity, having the adaptive leadership qualities to not be baffled by changes in digital technology and have a partnership mindset.
Managing the expectations of stakeholders has been difficult for me. We are a 125 year old publishing brand for many people it is a very difficult time in terms of the change accelerated by digital, internet and technology. Balancing the need for talent experienced in the traditional publishing world while injecting a more technology savvy talent to drive our digital and services growth has been a challenge.
In India, we have a very different business model considering the low price points and the consequently low cost of operations coupled with a very traditional distribution network and a fairly nascent digital infrastructure. It has been a challenge to position the India story to my senior leadership that despite all the challenges of an emerging market, India is strategically a very attractive destination.
Another important point is that we have observed that despite all our efforts, consumers are taking time to adopt and accept digitally driven education. We have tasted success, but the traction is slower than what we had anticipated.
Is price still the most critical factor that governs success in the publishing space or have things evolved?
When we push products like content; either in book format or digital format, the discussions still revolve around price, but when we the conversation is about a full learning solution or delivering an outcome for an institution, the discussion has moved away from pricing. People are willing to pay if you help them transform them into an institution for the new world. Students are willing to pay for quality content. Teachers are willing partners if it helps them teach more efficiently. As an illustration: We probably have India’s best prep material for the CAT entrance exam for IIMs and the title is a bestseller for us. We came up with a blended solution wherein we have a book or e-book as the core learning material, a password for an online tutorial of 40 hours with a renowned CAT coach, a website where students could take full length mock tests with performance feedback tools and also provided mobile phone based access to revision content and practice tests. We priced this bundle at multiple of the print book and our unit sales actually sales increased handsomely.
Our point of view is that if you are offering a solution price is a significant but not the primary aspect of the buying decision.
The next phase our journey focuses on expanding our digital services and proving superior learning and employability outcomes. We believe we will be able to charge a higher price point commensurate with value by delivering a full solution and get deep into the institution to partner in their transformation.
Publishing is a much unorganized market in India. What should companies like you do to change the market dynamics?
There are an estimated 14000 publishing houses in India and as the industry evolves, there is bound to be consolidation. To compete in an education market that will demand global standard digital education tools and expect defined learning and employability outcomes many local content companies will not have the technological capability, the investment capacity and the design expertise needed to give such a solution. I expect that in the next 4-5 years, at least for education publishers, there will be a significant consolidation.
Education markets will change, driven also through our own market development efforts. We are persuading institutions that should not treat education material as a commodity or a product. They should demand a full solution from the content partner ranging from curriculum design, outcome oriented teaching, learning and assessment content and technology platforms that make it easier for teachers to teach, students to learn and institutions to deliver superior learning and employability outcomes.
How has the market evolved over the last 5 years? Do you feel that Digital education is a force to reckon with or will it still take some time to be successful?
Apart from digital education becoming a reality, the government has launched a huge initiative on skill development apart from providing stimulus to several existing initiatives like the National Skills Mission with the appointment of an adviser to the Prime Minister on education, formation of National Skills Development Corporation and several sector skills councils. Government is ready to fund upto 75-100% of the training costs to successfully certified trainees and the industry is coming forward to define the exact job roles and skills that they need to fuel their growth. An entirely new market in skills training is evolving and we have participated closely with government and policy making forums with our global knowledge and expertise.
Coming back to digital education, it is there for real, although there is always a short term and long term play involved. Short term will be the pure conversion of a print form of content to an online or a device based consumption and libraries are the best example. Libraries provide a wide spectrum of content organized in a searchable form for reference and digital libraries solve a huge problem for the libraries ie search and reference. For example if you were searching for the Higgs Boson reactor, your search results across several books could take less than a few seconds through a digital library platform. It would normally have taken hours through traditional books. Secondly, if we give more functionality to the user; like highlighting or taking personal notes or making flash cards which they can access at a later point in time, it makes the entire offering much more convenient and effective.
The long term play is tablets becoming a platform for a cohesive learning package ie books, assessments, multimedia/ streaming content. There is currently a cost of device ownership issue and we are still in a state of flux regarding the size of the tablet, the technology support required, WiFi availability etc.
There are a number of things that need to be solved along the way and we still need to cross the final mile when teachers and learners start to willingly use this technology because it is powerful and efficient.
What kind of changes do you feel are required from the government to ensure a healthy growth rate for this sector in India?
At a school level, the most important policy has to be about curriculum standardization. CBSE, ICSE and the various State boards currently have different curriculums and as a result when college admissions happen, there is chaos. There has to be a common core curriculum standard particularly for mathematics and science.
Secondly, there is an issue on how do we test skills be it at school level or professional level? The emphasis is on memorization and reproduction on a particular exam date and time. We have to dramatically change our assessment process. We need to test students more frequently and the tests need to be designed in a way that it tests higher order skills rather than memorization.
Teachers and institutions have to become more data and analytics driven to constantly assess student performance and design interventions to help weaker students also attain the desired skills.
As an example we have recently been awarded a tender to deliver a digital curriculum solution for 14,000 CBSE schools with about 11 million learners. The effort is to offer a fully digital online as well as tablet rendered content solution. Students will get an entire bunch of resources and practice tests and teachers will get a bank of over 10000 assessments for every class to enable them to evaluate learning outcomes and gauge leaning attainments of every child through a very robust assessment and analytics platform. CBSE will also be able to get instant reports on performance of each student, class and school.
This system has the potential to transform school education if implemented with full commitment of all stakeholders especially the schools and the teachers. The book, practice tests, question banks, animations, videos and all this is all strung together very carefully leveraging our content and instructional design expertise to achieve the learning objectives for each class and subject in an engaging and effective way.
We also offer a tablet version where we also provide an option of e-tutoring by an expert set of teachers who are available 24*7. We are working on similar digital learning platforms for Engineering and MBA disciplines as well with world class subject experts and technologists helping us with the content and learning system design.
Ultimately our objective is to serve institutions, educators and students on areas that solve their problems. We dream of a world where McGraw-Hill Education is the most preferred source for content and services to help students learn better, teachers teach better and institutions are able to generate a skilled and talented workforce for the employers.
How does a company like yours take care of their talent requirements?
We constantly need to keep ourselves updated to stay relevant in the fast changing world of education so naturally we have a talent strategy in place. Some parts of our business are growing faster than the others in terms of digitization; for example the K-12 schools category and the professional reference category. So whenever we have an open position, the mandate is very clear that we will replace this position with someone with digital competence and experience. The people will also most likely be not from the publishing industry and we are looking at hiring people from software, mobile, technology startups etc. We consciously look for talent that has proven success in digital delivery, technology enabled training, assessment or instructional design and digital sales.
I must add that we also encourage our existing workforce to constantly upgrade their skills through training and ‘stretch projects’ and if they display the competencies and aptitude to move to digital and educational services areas we welcome that.
For expert talent especially in digital and services we are ready to pay a premium regardless of whether we get the talent externally or internally.
Do you think that the executive search landscape needs to evolve to suit the changing needs of clients?
The first thing that needs to change is that Search firms often get enamored by CXO level searches and don’t realize that these mandates are very few and happen rarely. The impression that I have is that once they get a CXO mandate delivered, it’s the end of the relationship and they move on because the opportunity ends. We want a search firm that can partner with us and provide us with talent solutions from the entry level to the CXO level. We are willing to signup on a success based level where the Search firm may charge a bonus if a candidate performs well. Today, retention is a huge issue and it is a huge loss for the company. The Search firms need to understand that the customers are now demanding more. They need to stand accountable for mis-hires and need to put their money where their mouth is.
Finally on an informal note, how does your average day look like? What keeps you occupied when you are not at work?
My day normally starts at 6 in the morning when I go and play tennis for about 1.5 hours everyday. I drive to Noida for work and I leave on time around 6 pm. I am a classically trained vocal and tabla player and have built a small home studio for myself. I also run a channel on YouTube which is called Shikanji Studio. I write Hindi and Urdu poetry and once a year I go up to the Himalayas in the Ladakh or Uttarakhand regions on my Royal Enfield motorcycle. During weekends I spend time with my family. Sometimes I teach my son Physics and Chemistry and occasionally also cook them a meal.