The Harvard Business School Corporation: A Billion-Dollar Education Powerhouse
In 2023, for the first time its the school's history, the Harvard Business School made over 1 Billion dollars of revenue. Just like the Harvard Business School MBA degree, the crown jewel of business education, the school's economic model is also an embodiment of what a great business looks like.
Anybody who thinks that the Harvard Business School is only in the education industry must look deeper in the School's offerings. Unique among Harvard University's 12 graduate and professional schools, the HBS has a self-sustaining business model, meaning that it doesn't ask the University for any money. The School operates in the intersection of education, publication, and professional services. Let me explain.
HBS funds its operations with cash from three primary sources:
- MBA tuition and fees;
- Earned income from Harvard Business Publishing (HBP), Executive Education, and HBS Online; and
- Philanthropic revenues, including current use gifts and distribution from the endowment.
The HBS only makes about 14% of its total revenue from MBA tuition and fees. On a separate note, the School returns 66 million USD, or 43.4% of that 152 million, back to students in the form of fellowships. Another 27% of the total revenue comes from endowment and gifts. The rest 59% comes from three areas, Harvard Business Publishing (HBP), Executive Education, and HBS Online.
Harvard Business Publishing (HBP)
Harvard Business Publishing is where HBS differentiates itself from other business schools. In 2023, HBP made 310 million USD for the HBS, accounting for around 29% of the School's total revenue.
Founded in 1994 as a not-for-profit, independent corporation affiliated to HBS, HBP has over 600 employees across more than ten locations all over the world, from NYC, Boston, to Singapore. The HBP has three business units: HBP Corporate learning, HBP Education, and Harvard Business Review.
Harvard Business Publishing Corporate Learning
The HBP Corporate Learning is in the B2B2C corporate training market. In other words, this BU needs to find corporate clients and close sales. The BU provides in-person, digital, or blended learning experiences to clients, which include large multi-national companies such as Coca-Cola and American Express. Harvard ManageMentor®, a major digital learning offered by HBP Corporate Learning, has 8,810,000 active users in 2023.
Because I never have the luxury to work for a company that purchases HBP Corporate Learning products, I can only guess that companies purchase licenses, aka accounts from HBP Corporate Learning, as employee/ executive training. Employees can log in to the platform using the licenses purchased and learn from there. Depending on the packages, employees may or may not be able to actually go to Harvard and study in person.
Harvard Business Publishing Education
The Education Unit of HBP monetizes the vast catelog of articles, cases, and other types of intellectual products, not only from the Harvard Business School, but also from other leading business schools around the world. The BU mainly targets educators, i.e. professors from universities looking to enhancing the instruction experiences by using HBS cases. It also provides partnership opportunities on institutional levels if the university desires to collaborate with HBP Education on a higher level. In 2023, there were 17,773,000 cases sold. The cases alone would mount to at least 150 million dollars for the Harvard Business School.
Harvard Business Review
HBR offers articles full of insights and should be read by all business professionals. Unfortunately, these insights are not free; anybody who wants to access HBR will have to pay at least $10 per month, or you are limited to only two articles per month for free. In 2023, on average HBR has 9,902,000 users per month.
Executive Education
Executive education was the second largest revenue stream for HBS after HBP, bringing in 224 million dollars, or around 21% of the total revenue. The HBS Executive Education provides both B2B and B2C offerings. For example, executives who want to further invest in their business education can choose one of HBS's topic-focused, regional, or comprehensive leadership programs. Organizations can also engage Executive Education to train their team of executives, probably at a rather high price points.
Harvard Business School Online
In 2023, The HBS Online had an enrollment of 41,803, and made 68 million USD, or 6% of the School's total revenue. HBS Online offers courses in eight areas.
1. Digital Transformation
There is only one course offering under Digital transformation: Winning with Digital Platforms.
2. Marketing
There is only one course offering under Marketing for HBS Online, which is Digital Marketing Strategy.
3. Business Essentials
There are three course offerings under Business Essentials:
- Business Analytics: $1750
- Economics for Managers: $1750
- Financial Accounting: $1750
Each course can be taken individually for the price listed. Additionally, you can choose to purchase all three as a bundle, called Credential of Readiness (CORe), for a total of $2500. CORe is probably the most well-known HBS Online offering, as you can see from many executives' LinkedIn profiles. In 2023 there were a total of 4,776 CORe Participants.
4. Leadership & Management
There are seven courses under Leadership & Management:
- Leadership Principles: $1750
- Leadership, Ethics, and Corporate Accountability: $1750
- Organizational Leadership: $1750
- Management Essentials: $1750
- Strategy Execution: $1750
- Power and Influence for Positive Impact: $1750
- Negotiation Mastery: $1750
Under this stream, you can also choose to get a Credential of Leadership, Impact, and Management in Business (CLIMB), but for a price higher than all courses individually combined, at $15,000. The reason might be that the Credential track also includes a capstone project, which is not available in any individual course.
5. Entrepreneurship & Innovation
There are six courses found under the Entrepreneurship & Innovation section:
- Entrepreneurship Essentials: $1750
- Disruptive Strategy: $1750
- Design Thinking and Innovation: $1750
- Launching Tech Ventures: $1750
- Negotiation Mastery: $1750
- Winning with Digital Platforms: $1750
No credential is offered under the Entrepreneurship & Innovation stream.
6. Strategy
- Disruptive Strategy: $1750
- Business Strategy: $1750
- Strategy Execution: $1750
- Sustainable Business Strategy: $1750
- Global Business: $1750
- Economics for Managers: $1750
Interestingly, the CLIMB credential is also listed as the go-to course combo under the Strategy stream. You can also find some courses listed under different streams. For example, Economics for Managers is listed under both Strategy and Business Essentials.
7. Finance & Accounting
- Leading with Finance: $1750
- Financial Accounting: $1750
- Sustainable Investing: $1750
- Alternative Investments: $1750
8. Business in Society
- Business and Climate Change: $1750
- Sustainable Business Strategy: $1750
- Sustainable Investing: $1750
- Power and Influence for Positive Impact: $1750
- Global Business: $1750
- Leadership, Ethics, and Corporate Accountability: $1750
Though it has the Harvard Business School name on it, the HBS Online really functions the same way as any online course product: at its core, it develops courses that can be taken remotely by anybody. The HBS Online also has a blog called Business Insights, and publishes articles on a wide range of topics, from accounting, analytics, to technology and work-life balance. But because it has the Harvard url behind it, these articles are able to take advantage of the high domain authority and rank much higher than any regular business blog, leading to a large amount of traffic to its top funnel. You can also subscribe to its newsletter. The quality of these articles, however, is not impressive (but you can check it out for yourself).
From the HBS website, you can see that "HBS Online revenue decreased 3 percent to $68 million from $70 million in fiscal 2022, as the group continued to navigate the challenges of increased competition and higher learner acquisition costs". This should alarm anybody interested in selling courses online - including me - that even HBS Online struggles within this competitive market.
One of a Kind Business
The Harvard Business School has one of a kind business model that can dwarf many of the public companies.
While it may look like MBA students are the main customers of HBS, I'd argue that MBA students are actually "products" of the School. HBS invests heavily on providing great education to the MBA students, including financial investments by providing scholarships and fellowships. These "products" go on to become decision makers in various industries, and they give back to HBS by ways of using their influence on Corporate America: not only will they be more likely to give gifts, subscribe to HBR, etc., but they are also more likely to allocate company budgets to Corporate Learning, one-time Executive Training, or employment of future HBS students, especially because of their ever-increasing decision-making capacities.
From a risk standpoint, the business model of HBS is considerably stable. In other words, it's extremely unlikely that all revenue streams will go under at the same time. It has B2B and B2C products, e.g. Corporate Learning and HBR; it has build once, sell multiple times, e.g. HBS Online, as well as high-ticket services, e.g. Executive Education; it makes money from both investment and operations. All revenue streams stem from one core area of strength: the Harvard Business School scholar and research.
