Alright, this is it. This is the last lecture of this course. This is the conclusion that I've been promising you for a while. But then eight really intense weeks of teaching the course came in the way. And then afterwards the Coursera operations challenge that we've worked through together, as well as your exams, kept me busy. And so to be honest the last time that I recorded a lecture we had sunshine outside here of my office and this time of the year Philadelphia is getting ready for the holiday season. But I did want to have this concluding lecture and really the purpose is two-fold. I wanted to offer some high level thoughts about Coursera and the operations of Coursera, because learning is a process just like anything else from sandwiches to emergency rooms, everything else that we have discussed in this course. So I wanted to offer an operations management perspective on Coursera and then most importantly, I wanted to thank everybody here who has taken this course as well as the team that has so wonderfully supported me along the way. So here we go. So sometime in June this year, 2012, I was getting ready to work on this Coursera course, operations management, and I had to start working on the translation from my classroom content to this online format. I had to chop my lectures into smaller lectures and think about how to make this as engaging as possible. And I want to remember that the folks at Coursera told me Christian, if you can get your course, your landing page, everything ready by next week, you're going to get a lot of users because we're going to issue a big press release and we've lots of people looking for content right now. And so I got everything together and the night before I was about to launch the website the folks at Coursera told me well Christian, you also need an icon for this class. And so, you've been familiar if you've taken this course, with my learning page here. And I have designed some process flow diagrams, some statistical distributions to look cool, but the folks at Coursera said Christian, you have to really come up with a cooler icon, and I turned to my 13-year-old son Jan. And Jan helped me then overnight get these legal guys together. And the next morning I sent a couple options over to Mountain View, California and asked the Coursera folks, look, which one do you like the most? And they rejected all of my proposals and went with the legal guys that really you have gotten to like that much. So it's a big credit to Jan. Again, let me talk a little bit about this course and let me start off with some statistics here. When we went live, we had thousands of users sign up within literally the first week and this was still six to eight weeks before the actual launch of the course. Now that everything is said and done, we've closed the course now. We had a total of 87,000 users sign up. This is arguably a really big number but I take this number with a grain of salt. Signing up was free and so obviously it didn't mean too much other than that you've clicked on my legal guides here that we talked about. We had 58, 000 users that watched at least some video and the 37,000 users who actively responded to the in-video quizzes. I think that's a kind of a good user base to think of as the participants in this course. The people who watched videos but actively were looking at them carefully enough that they actually clicked on the right answers that allowed them to finish these videos. As we've seen in other Coursera classes, this user base is then divided into the watchers and the doers, if you wish. And so 10,000 users did at least some of the homeworks and 7,000 users took the final exam. And if you have not taken the final exam, that was a lot of work. It was a very serious course, harder than, I would say, a quarter long course, roughly like a one semester long introduction to operations management course with everything from productivity analysis, queuing analysis, Six Sigma and we also had a very active user community. It's about 7,000 users were active in the forum. At times, it was really wonderful to see how users were helping other users when people couldn't understand my weird German accent or my crappy handwriting. I really appreciate that instead of emailing me, people would just go on the forum, and often times within minutes, issues were resolved by very active users on the forum. And then halfway through the course we launched this Coursera Operations Management Challenge. Where I challenged you guys to show me how you applied the content that I'd been talking about in this course, how you apply this at work. And we have had 2,000 users who participated in this. 2,000 users will sent me applications of how they have applied a value add analysis, the process flow diagram, the bottleneck analysis, the Six Sigma capability analysis, root cause problem solving, all of these things. Showed me applications that work and some of them just really amazing and as I promised I would share a couple of these applications with you on the post-program website. Now one of the things that we emphasized in this course is that operations can work on a Make-to-Order basis or on a Make-to-Stock basis. In Make-to-Order operations, such as Subway, it's demand that drives the system. Customers come in and we only starts the supply process making the sandwich, on the order of the customer. In the same industry, McDonalds works on a Make-to Stock basis, right? We said at that McDonalds, we are kind of forecasting how many customers will show up, and then we will make some burgers ahead of time. This lets us take advantages of big batches and scale economies. And also lets customers get their burgers very quickly because they don't have to wait for the production of the burgers. The cost of that is then, of course, it does limit variety. So you can think about any educational service also as a Make-to-Order process versus Make-to-Stock and the classic teaching process the classic service delivery model is that lectures, classes, they really are primarily driven by supply. They're really driven by me, I'm a professor, I'm the capacity here, And I like scale economies. I like to produce in big batches. And so I tell my students where class is is going to be Monday at 9 am and I'm going to enforce it's schedule. I'm going to dictate that schedule as opposed to listening when the students actually want to take the course. Office hours, kind of the other part of my life in the teaching world, that's really demand, right? It is based on demand. The students come in and say, hey Christian, I have a question. Can you help me? Now as much as I like my students, I hate office hours because there's no scale in them. I'm explaining to a student one-on-one how to find the bottleneck. That's a very, very expensive way for us as an institution to deliver education. Now what we've seen recently in the educational world is think of Khan Academy who's really pioneered these YouTube videos for education. Khan Academy is like McDonald's, right? So, Khan Academy is a Make-to-Stock model. I've been a big fan of Khan. I have watched a good number of the videos, I use it with my kids and it's a really cool concept but it is Make-to-Stock. He's explaining you how to compute a slope of a line and he does this once. And then we as users come in, and we just consume that pre-defined pre-packaged good. Coursera is actually has a, I think the success of Coursera in many ways hinges on a hybrid between make-to-stock and make-to-order. Now, you notice that while you have some leeway when you take the courses, you can take the the lecture on Monday and Wednesday and Friday and maybe on Monday next week. Now, you cannot take my lectures, right? Right now the course is shut, and the reason for that is because of the peer to peer aspect of Coursera. There is a real benefit of having students take it at the same time. And so I kind of call the same in course, it's just halfway between a Make-to-Order and Make-to-Stock setting. And so it peers the power of Khan academy and make-to-stock and skill economies was a beauty of peer-to-peer interaction and learning from each other. Now, in the introduction to operations management module, one of the things you learned is that any operation can be evaluated on four dimensions of operational performance. Cost or efficiency, variety, timeliness, or responsiveness and quality. And so let's apply these four dimensions here to an educational institution such as the University of Pennsylvania or the Wharton School, as one of the leading business schools in the world. And I'm arguing here that if you look on these dimensions, so quality, well, quality has to do with the quality of the faculty, the community with other students, personal feedback that you can get, the kind of the ambience here on campus and all the other good things that kind of comes with a top-notch university. Variety is about kind of our course offering, so course catalogue. But variety also has to do with our location, so we have 12 years ago opened a facility in San Francisco to be closer to our West Coast customers. And the universities have more and more opened up and form kind of other site locations around the globe. Cost is kind of the tuition that you have to pay to attend a university. And timeliness has to do with this kind of leisure that we talked about on the previous slide make-to-order versus make-to-stock, we responded to demand. And if you look at the industry in kind of the MBA Business School world, I would argue that this is more illustrative than based on any data. I would argue that mostly top tier schools, second tier schools, executive MBA programs, we've kind of pretty much been alike. Except that in the executive MBA program for example we offer you a little bit more variety of locations, we are offering you to take classes on weekend but in return we charge you more. And maybe at the top tier school the faculties are little better and the other students are little nice and by a large you have seen kind of this type of performance on this four dimensions. Now, what made Coursera so successful, is it didn't compete on these dimensions that I just introduced. It didn't compete on the attributes such as the faculty quality, the student community and the like, because that's a very hard competition going directly against the universities. So, instead of competing on this existing product attribute, what Coursera did is they followed up what often time is called the Blue Ocean idea or Blue Ocean Strategy. And the idea behind the Blue Ocean Strategy is instead of competing on the existing attribute, you're introducing new attributes. You excel on one or several of these attributes and really, really do well. And in return you're going to sacrifice some others. So instead of, again going neck to neck against the incumbents here, what Coursera did is, if you think about it, they really got rid of some of the things that we as universities have lost so much. The kind of the personal feedback from the faculty, the ambiance of the campus, the access of the faculty, it's just not here. And even the student computer as great as this online forum activity is, it's not kind of the same as hanging out with your friends on a university college. But in return it does allow them to dramatically redefine this curve here, which is often called the Value Curve, dramatically redefine it on some other dimensions. Now, obviously and first and foremost, there is costs, indeed the Coursera education is for free, which is a lot cheaper than what the Ivy League Institutions are asking for. But this is not just about money, right? The other thing that has happened is it has really allowed students to take the courses from home and it allows students to take a university learning experience on their own schedule, requesting back to semi-synchronous delivery model. And so instead of again competing on the existing value curve, what Coursera did it has redefined the value curve and Kim and Maurbogne from INSEAD, my former home school called these type of moves, blue ocean moves. So this change in the value curve really allowed Coursera to not compete for the existing students that we would typically compete with Stanford or Harvard or Princeton for, but instead it would open up the market. It would go after participants, after students that previously have just not been active in the category. And so you see this nicely in our statistics for this operations management course. So when I did the survey of who's in this course, you'll notice that the vast, vast majority these are people that are working 8.807 people out of the roughly 10,000 people who took the entry survey. Over 80% are actively working and so are people who would typically really not have engaged in this category at all. Beyond the professional activity here, the next slide shows the geographical dispersion of our user base in this Introduction to Operations Management course. And you see again, that we've not been going after our traditional customers here. We as the University of Pennsylvania based in Philadelphia, well the idea, we have a lot of users here in the Northeast, but the vast majority again of the users are users that we, otherwise would have not gotten here into our classes. And so that's again this is another kind of nice application of the Blue Ocean movement. It's really expanding our reach to customers, that we would have never reached otherwise. Now, the last thing I wanted to comment about, relates to this concept of the Efficient Frontier, that we discussed repeatedly in this course. And so if you think about the frontier here, I think there is a fundamental tension between the amount of learning that we can create and the cost, the efficiency really optimally the institution and of the faculty. And so there is this natural tension that I was alluding to this earlier on. In my classes, I have a lot of students, and so I'm reasonably productive, but it doesn't give you the same kind of direct experience, kind of the high fidelity learning that you would have in an office hour, right? And so there is a natural frontier here where if you come to my office hours, that is per minute of your time, you're going to get the maximum out of that. And if you come to a big lecture, that's getting my efficiency maximize and most of the schools find the nice balance and I think the University of Pennsylvania does this in a very professional manner. Now, what Coursera has done, it is not repositioning us along this frontier, it does not just sing well, it's kind of have question by the book or kind of just produced a YouTube videos and we just going to push it online. What Coursera has not done is a repositioning along this frontier here. Coursera has shifted the frontier. This is a frontier to be fair again is being shifted out by other institutions. And again, I just want to mention Khan Academy here. And this new frontier now allows for a lot of opportunities. And so what Khan Academy has done I would argue, is they have basically allowed one faculty now to teach many, many more students. And that is really how you really [INAUDIBLE] for the efficiency. So we have roughly the same learning outcome as sitting in traditional course. And at the same time we have a 100x to a 1000x of productivity of the faculty. I think through the forum, through all the other things are just Coursera down the wrong building communities. I think Coursera does a little better than that. We haven't quite gotten that mileage and we had to manage the forum, design the test questions, the feedback mechanisms, all these other good things. So Coursera is also playing on this new frontier but you see it position up a little up higher where with a little stronger emphasis of student learning. And then again, we can take many ways, we can take advantage of this frontier. Where for example we could create very specialized doctoral course to some very advanced topics was one on one Skype sessions to the faculty that would really be dramatically kind of maximizing student learning. And they would, beyond the expensive side, or we could go after the volume. Whether we going to go and use this new technology, the new frontier, by improving learning, holding the faculty efficiency constant. Or whether we going to hold the learning content and just deliver it cheaper, that's really up to us. Right, you could imagine some universities, now saying, well look we don't need a professor of operations management anymore. The people can just go online and take Christian's class. Well, in that case we have made things more efficient. And running roughly constant or potentially even sacrifice a little bit of that. On the other hand, what I've tried to do this semester with my full time students is I've said, look we have Coursera now. And so, I would spend the same amount of time with you as in the past but you can also go and see some lectures here. And actually I've found that students have with this combination of in classroom learning, flip classroom, access to Coursera, they've actually learned more. So we have cashed in by having a better learning outcome. Which way you go, whether you're going to go for the money or for the learning, that's a choice that every organization has to make by themselves. The last thing I wanted to do in this video is just thank and acknowledge the people who have helped me and who have made this online course possible. It all started with Chris Heather. Chris was an MBA student in my first year operations management course here at Wharton last year. Chris then went on for an internship at Coursera for which, by the way, he never returned. And he said, Chris, it would be cool if you could create the course I took with you for Coursera. And he was in many ways, really, the trigger who got everything started. And he connected me with Daphne Koller, one of the founders, who has been very insightful and has shared with me her passion and vision for open learning. And that really made me comfortable spending all the time and effort for putting the course together. I then went on the entire duress and his song Doris is a second year MBA student here at Wharton and Hessam is a doctoral student with whom I'm working and they have been a really amazing support. We have spent countless hours writing these nasty exam questions and practice problem questions together, producing videos and all the other things and they have been a total joy to work with. We got help from the Coursera site from Pang Wei, who has, really whenever we had a technical issue, we had immediate response independent of the time of the day. And Relly, who has been handholding us and kind of really been managing the relationship between the University of Pennsylvania and Coursera. And then most importantly, I wanted to thank all of you for spending the time, putting in the effort. I very much hope that you got something out of that. I very much hope that you got excited about the concepts of operations management, and I wish you all the best going forward.