Introducing efficacy at Pearson

1. Image by Lu Yi Introducing efficacy at Pearson Improving learner outcomes to help people make measurable progress in their lives. • January 2016

2. Image by Misael Susana Contents • 03 Challenges and opportunities • 06 What is efficacy at Pearson? • 10 Making progress • 15 Efficacy in action: examples • 21 Next steps Contents

3. Challenges and opportunities

4. Making learning more effective • At Pearson, we’re dedicated to empowering human progress through learning. As the world’s learning company, we have a unique opportunity to lead the way in ensuring better outcomes for learners around the world. • The massive annual global education spend presents us with a huge opportunity. • 1The New Role of Business in Global Education, Michael Porter, 2014;2John Fallon, Pearson Q4 2014 Results Earnings Call;3Pearson Annual Report and Accounts 2014 • $5T • is spent on education1 $700–800 is addressable by the for-profit sector2 $8B is Pearson turnover3 Challenges and opportunities

5. Focusing on results to improve education • Around the world, trillions of dollars are spent every year on improving access to education. But that huge investment doesn’t always translate into better learning or successful outcomes for learners. • By learning from other industries, and focusing on results, we’ll improve the quality of education—and that in turn will improve learners’ chances of making progress in their lives. Around the world: • 1UNESCO Policy Paper, July 2014;2UIS Information Paper, July 2013; • 3International Labour Organisation (ILO) 2014;4UNESCO Education for All Monitoring Report, 2013/14 • 58M • primary-age childrenare not in school1 123M 15 to 24-year-olds are illiterate2 206M people are unemployed3 250M children are in schoolbut not learning4 Challenges and opportunities

6. What is efficacy at Pearson?

7. Image by Jose Vidal Carrasco Delivering exactlywhat we promise The dictionary definition of efficacy is “the ability to produce a desired or intended result.” To us at Pearson, efficacy means making sure that our products and services work exactly the way we say they do. It’s at the very heart of what we do. We’ve developed our efficacy strategy to help us create and deliver best-in-class learning products, platforms, and services across global markets—all with the aim of improving learner outcomes. What is efficacy at Pearson?

8. Image by Debdatta Chakraborty This is a real commitment In November 2013, we announced our commitment to improving outcomes delivered by our products and services and to publicly report on our progress and results. We were the first education company to make this commitment. To follow through on our promise, we need to continually ask ourselves how we’re helping millions of learners to improve their lives through learning. As John Fallon, Pearson CEO, stated: • “Pearson’s purpose is to help people make progress in their lives through learning. So we better be sure that we can demonstrate a measurable impact on learner outcomes. • “By 2018, we will, in a rigorous and externally audited way … report on how our products and services improve learner outcomes.” What is efficacy at Pearson?

9. Efficacy is for life • On a year-to-year basis, we increase both the breadth and the depth of our external efficacy reporting. And we use our findings to continually define and refine our products. Here’s our roadmap for the first four years: • In 2015, we release the first efficacy reports for: • enVisionmath 2.0 • MyEnglishLab • MasteringChemistry • CTI & MGI • Wall Street English 2015 2016 2017 2018 The first five products The first fifteen products The first thirty products The first wave In 2016, we release efficacy reports with increasing transparency and depth for a range of products. In 2017, we release updated efficacy reports with increased transparencyand depth for 30+ products. We also subject them to a mock audit. In 2018, we release audited efficacy reports when they go live (continuous assurance) and produce a separate summary annual report. What is efficacy at Pearson?

10. Making progress

11. Defining our outcomes • To know that our products are improving learner outcomes, we first have todefine what those outcomes are for each of our products. We evaluate the following four categories. ACCESS COMPLETION ACHIEVEMENT PROGRESSION The learner’s access and experience The timeliness of completion The standard of achievement or level of competence Where the learner goes next: study, training, or employment Making progress

12. Embedding efficacy into our products EXPLORE • We factor efficacy into every stage of our product lifecycle, which means that it’s now an important consideration when we’re developing new and existing products. • Efficacy and Research gates at each stage • of the product lifecycle ensure that we have a systematic way of embedding efficacy into new and existing product development. VALIDATE IDEA RETIRE GROWTH SUSTAIN Making progress

13. How much impact? • The Pearson Levels of Evidence1 allow us to apply rigor to evaluating our impact so that we can assess the degree to which the use of our products and services are, in isolation, having a direct impact on improving learner outcomes. LEVEL JUSTIFY ENGAGE CORRELATE CAUSE EXPLAIN EVIDENCE Product or service has well-defined outcomes and measures and a supporting theoretical evidence base appropriate to its purpose Usage of the product or service is designed and achieves appropriate levels of satisfaction Evidence that the product or service is shifting or influencing leading indicators and/or evidence of a relation to outcomes Evidence isolates the impact of the product or service on the target outcome(s) with educational and statistical significance Evidence that the impact of the product or service on the target outcome(s) is replicated in multiple situations Educational research (e.g., literature review) User experience studies (e.g., satisfaction surveys from learners and teachers) Pre/post tests (e.g., correlation analysis) Controlled studies (e.g., use of control vs. “treatment” groups) Repeated and independent studies (e.g., ongoing digital data analyses) 1Based on nesta.org.uk/sites/default/files/standards_of_evidence.pdf Making progress

14. A constant process • By continually evaluating our products through collecting and analyzing the evidence, we’re able to constantly improve our products and ensure that they’re helping learners in the way that they’re meant to. 100% Opportunity for intervention 80% Prediction point 20% into contracted period %-age of units completed 60% Student A: Predicted as not at risk 40% 20% Student B: Predicted as at risk 0% 0% 20% 40% 60% 80% 100% % into the contract period Making progress

15. Efficacy in action

16. Image by Sudipta Dutta Chowdhury Discover how efficacy improves our products and services Around the world, efficacy reviews have led to a range of significant developments and improvements in many aspects of our products and services. Efficacy in action

17. How a focus on efficacy improved strategy, operations, and vision • Wall Street English • What is it? • Wall Street English (WSE) is the premium global provider of English language education to adults at every level. The efficacy activities varied around the world. • What was the efficacy activity? • We carried out follow-up efficacy reviews in China (after 18 months) and in Brazil and Germany (both after 6 months). • How did it help? • In China, we reduced the maximum course length from 24 to 21 months, • and we will analyze the impact of this change on student satisfaction and motivation. • In Brazil, we introduced a goal-setting appointment, recording high-level goals immediately after the sales appointment or just before the first lesson. We also changed sales consultant incentives. • In Germany, we now digitally collect students’ aspirational outcomes and embed a goal-oriented culture. We’ve also reconsidered the NSE design to encourage staff/student interaction. We’re also training the academy to move sales consultants to a consultative role. Efficacy Reviews Efficacy in action

18. How an efficacy study led to a simpler, smarter product • Espiral de Números • What is it? • Espiral de Números is an adaptation • of enVisionmath, developed for primary school grades1–6, and sold mainly • in Mexico and Central America. • What was the efficacy activity? • We held an initial efficacy review and outcomes discussion, then a teacher survey, and finally an efficacy study • with a flagship school. • How did it help? • Our review led directly to changes to the 2nd edition, including shorter, less complex lessons. In addition, we developed in-depth training specifically for teacher professional development. Efficacy Reviews Efficacy in action

19. How an efficacy review led to a more relevant product • Saudi Skills • What is it? • The Saudi Skills Project is a government project to build 15 short course qualifications for the Ministry of Labour • in Saudi Arabia. • What was the efficacy activity? • We held an efficacy review at the RFP stage, then monthly follow-up meetings. We trained the team on presenting outcomes to the client. Outcomes workshops for the development team are planned. • How did it help? • We built user capacity for customers, employers, and training providers. We’re developing on-boarding toolkits and a glossary and highlighting the importance of relevant outcomes within the development of 50 more short course qualifications. Efficacy Reviews Efficacy in action

20. How our focus on efficacy influences new editions • Matura Focus • What is it? • An English exam prep course for national exams, which is increasingly blended with digital tools. The Spanish version was released in 2015, with global versions to follow in 2016 (based on core content from the Polish version). • What will be the efficacy activity? • An outcomes workshop and 12-month follow-up efficacy review will be followed by interviews with the product team and the global focus team. Further conversations after a second review are planned. • How will it help? • The results of the survey will not only inform product development and efficacy teams on how Matura Focus supports the outcomes identified, but will also impact the future design of the next edition of the course. Efficacy Reviews Efficacy in action

21. Next steps

22. We’re committed to access, success, and progress • Efficacy is central to everything we do. With the dedication of all of us at Pearson, it will help ensure that billions of learners around the world make progress in their lives, finding success through improved access to better education. On the Road ... to Delivering Learner Outcomes(March 2015) describes our progress on efficacy since the public launch in November 2013. In this edition, you’ll find examples of people and organizations outside Pearson whose efficacy journeys have informed our work. Asking More: The Path to Efficacysets out the imperative for measuring and improving learning outcomes worldwide. The Incomplete Guide to Delivering Learning Outcomes shares in detail our initial approach to contributing to that goal as of November 2013. To find out more about efficacy at Pearson, please see efficacy.pearson.com Next steps