Management Lessons from an Enterprise

Khan Academy - the inception

Salman Khan , a hedge fund analyst in US, stumbled upon by chance on an idea that paid rich dividends. He gave up his lucrative career for that. So the story becomes all the more fascinating. May be there is a lesson in there for all of us  - the future managers. What does an Enterprise mean? By Enterprise we mean a business that involves risk and pays dividends. Such a business requires boldness and effort. Salman Khan, now an entrepreneur showed just that. He started with teaching his cousins online via videos that could be downloaded elsewhere in the world. The best part according to him was that his cousins were not only able to receive the knowledge but refer to it as and when they wanted later. That's how, i feel, education becomes effective. So he took the idea ahead and built an organisation on it called Khan Academy.

What is Khan Academy?

The Khan Academy, a not for profit organisation provides online educational content to millions of web users.These videos are micro lectures on subject such as  mathematics, history, healthcare  and medicine, finance, physics, chemistry, biology, astronomy, economics,cosmology, organic chemistry, American Civics, art history, macroeconomics  and  microeconomics,  and  computer science. The videos are available to be viewed for free on video sharing sites such as YouTube.

Vision of the Entrepreneur

Mr. Khan, the person in the image,  has stated a vision of turning the academy into a charter school:

This could be the DNA for a physical school where students spend 20 percent of their day watching videos and doing self-paced exercises and the rest of the day building robots or painting pictures or composing music or whatever

Khan Academy as a business model

The organisation runs on donations from individuals. Some years ago it had started accepted advertising through its videos which it later discontinued. It has found a sponsor in Bill and Melinda Gates Foundation. Google also helped it in a big way by contributing $2 million for creating more courses and for translating the core library into the world’s most widely spoken languages, as part of their Project 10. Khan Academy has been viewed more times than MIT's OpenCourseWare (OCW). Its YouTube channel has over 150 million total views, compared to MIT's 38 million. It also has twice as many subscribers, at more than 320,000. Thus in short one can say that the business model adopted by Khan Academy is a sustainable one as it adds value to users and industry alike.

Management Lessons that you can derive 

 Goal Setting

We had discussed earlier that the goals we set need to be S.M.A.R.T.E.R.

S - Specific

M - Measurable

A - Attainable

R - Realistic

T - Timely

E - Evaluate

R - Re-evaluate

Here we observe that Mr. Khan has done exactly that by targeting the school going students who are in general dissatisfied with traditional means of education. His goals are specific to catering a particular audience and realistic, in the sense that he knew what he was good at and used that to his advantage without much experimenting. for example initially he did the videos himself so he set real targets.

Theory X and Theory Y Managers

In principle, Theory X managers are negative in the mindset. So they look at every opportunity as a task that they are being forced to do. Whereas Theory Y managers are just the opposite. They are the ones who believe that things that are tough to achieve are waiting for someone who is tough enough mentally to do them. In essence, Theory Y managers have a positive outlook of life and that reflects in their work too. Here Mr. Khan could not have taken up this initiative without feeling positive about the tasks and the barriers. Thus, he stands out as a Theory Y manager.

Conceptual, Human and Technical Skills

In theory it has been said that people possess three kinds of skills namely - Conceptual, Human and Technical. 

When we talk of conceptual skills we mean the learning of the trade that you are in. For a manager it may be understanding the business of the company or module he is a part of. By human skills we mean the skills needed to interact in an environment. Managers need to treat the people around them with respect and understand their potential at all times. Lastly, technical skills are also the part of a human being as they stand for the theoretical know-how of how things work. As a person moves up from one level to the other the combination of skills that his job requires changes as given in the figure below.

We observe in the real life example of Mr. Khan that initially he does the video creation himself. So, it can be safely said that he possesses technical skills and requires less of human skills when he is working alone, all by himself. But as he gradually builds the business around the tutorials he needs more conceptual and human skills. Whereas the technical proficiency is taken care of by his team which further develop the tabs and cluster of topics on the web.

What is clear from the enterprising success of Mr.Khan is that you don't need a plethora of resources to start your own venture. It can be done with minimal inputs. In this case, the channel of broadcast Youtube, that is free for all, was used. So, No Creative costs, or for that matter, zero inventory costs unlike  huge production houses. Initially, the requirement of putting up an office too was not felt. Similarly, other enterprises, like Facebook and Flipkart, too grew without the support of funding from Venture Capitalists.   
Simply put, this is an amazing feat. To create an enterprise the first step needs to be taken without thinking of the fear of failing. The rest will take care of itself. 


New Enterprises have the following features that is also their USP:

• No Scarcity or Abundance creation - since here the tutorials that Mr. Khan publishes are knowledge based so no dependence on physical resources is created. Hence, no scarcity or abundance situation has been created. 
• No spacial limitation, No transport costs, No Inventory costs - the tutorial videos are freely distributed over the already established internet. So no need to stock them anywhere or set any special infrastructure so as to distribute them. 
• Anywhere and everywhere available - the tutorial videos are easily accessible over the internet.
• Speed of delivery - the knowledge content is easily received within minutes by the recipient.
• Low cost facilities - the enterprise was born as video delivering channel that was liked by all. It has been made free of ads and other sources of revenue generation. Yet it is sustainable because it has been developed from resources which were not very hard to obtain. 

To follow Khan Academy you can check out YouTube and other below mentioned websites -

• http://en.wikipedia.org/wiki/Khan_Academy

• http://www.khanacademy.org/

• http://www.youtube.com/watch?v=W-vj6BhQa5w

• http://www.youtube.com/watch?v=nTFEUsudhfs

P.s. Khan Academy and the logo are copyright reserved material.