OutRival Presents: The New Normal

OutRival Presents: The New Normal Ep. 1 - Penn Foster CEO Kermit Cook

β€’ OutRival, Inc. β€’ Season 1 β€’ Episode 1

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RubΓ©n Harris and Timur Meyster chatted with our friend Kermit Cook, CEO of Penn Foster, about reinventing a 135-year-old distance learning company for the AI era. Penn Foster was founded in 1890 to teach coal miners in Scranton, Pennsylvania. Today it graduates 93,000+ learners a year and is on a path to graduate 150,000 by 2029.

We get into deploying Digital Workers (AI Agents) to support working adults at $1,500 high school tuition, why Penn Foster is the third-largest "school district" in the country, the unusual journey from Dartmouth engineering to KKR to Penn Foster CEO, how to stop treating AI as a tech project and start driving real outcomes on enrollment, retention, and ROI, and what it actually takes to modernize an institution that has served learners through every major technological shift since the telegraph.

Learn more about Penn Foster here: https://www.pennfoster.edu/

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Kermit: [00:00:00] Wait a minute, I'm skeptical that that AI agent can be as good as a human is. What are you losing in terms of human connection? It allowed us to reduce the cost of re- proactively reaching out and connecting with learners by more than 70%. We were almost 100% reactive in terms of learner support. We don't need to spend months building out roadmaps and testing design when you can build and create so efficiently.
Kermit: You just build it, put it out there, experiment. If it didn't work, throw it away. We talk a lot as an organization about creating ugly pots. Have you heard of the parable?
Ruben: No, tell us. Happy Friday. My name's Ruben Harris. I'm here with my co-founder and co-host, Timur Meister, and this is The New Normal. The New Normal is a show where we go inside of organizations that have actually deployed AI in production at scale in a way that's made a meaningful impact in their organizations.
Ruben: This is not a show about hype. It's a show where we interview [00:01:00] leaders who have made decisions to reimagine their organizations with AI at its core. We're in New York City. We're on the top floor, and I'm excited to introduce our guest. Timur, can you please introduce the guest? Thank you, Ruben. So today, our guest is, is the CEO of Penn Foster, Kermit Cooke.
Timur: Um, before I introduce our guest, I just wanna set the stage for the episode. Um, let's go back to the closing decade of the 19th century, where in just a few years, um, a bunch of, uh, inventions got created, like the telephone, the automobile, the motion picture, and the electric light bulb, um, all in the span of, uh, 10, 20 years.
Timur: Um, it was a moment when sound, light, and distance itself stopped behaving, uh, like it did 1,000 years prior, and, um, the world quietly switched on. And, uh, the reason it's relevant, because the audience has heard of the light bulb, but they probably haven't [00:02:00] heard of a man named Thomas Foster, who in 1890 started a distance learning company providing accounting and engineering courses to coal miners in Scranton, Pennsylvania.
Timur: The idea was simple. If you couldn't get to school, the school would come to you. And, um, that company is called Penn Foster. And, um, jumping 135 years into the present, um, in 2024, Kermit Cooke, uh, became the CEO of Penn Foster. Now, a little bit about our guest, because Kermit's path, uh, of running Penn Foster is quite unusual So Kermit, uh, has engineering degrees from Dartmouth.
Timur: He had a stint at Teach for America teaching high school physics in St. Louis. A very impressive guy. There's, there's a whole list here. A joint MBA and a master's in education from Stanford. Kermit then spent 13 years at KKR, where he ended up co-running KKR's Capstone in the [00:03:00] Americas, and then he became the chief operating officer at Cengage Group.
Timur: Uh, since early 2024, Kermit became the CEO of Penn Foster, where he set a goal to graduate 150,000 learners by year 2029. And, um, what makes Kermit's work especially interesting today is we're living at a time when education, employment, and technology are all being redefined. The traditional pathway is not working for everyone.
Kermit: Employers need skilled talent, and learners need flexible courses that fit into their lives and, um, actually connect them to better jobs and economic opportunity. So Ruben and I have had the privilege of getting to know Kermit and his team since 2024 through our Outrival partnership with Penn Foster, where our team has helped deploy AI digital workers, um, doing repetitive work, supporting hundreds of thousands of students as they enroll and get connected to the right resources to navigate their learner's [00:04:00] journey.
Kermit: On this episode of New Normal, we get into how you reinvent 130-year-old company for the AI era, how you serve a $1,500 student profitably while still investing in better technology and content, and how every leader can stop treating AI as a tech project and start using it to drive real impact and ROI on enrollment, retention, growth, and real outcomes for the learners But first, uh, Kermit, uh, I just wanna say welcome to New Normal.
Kermit: Really appreciate it, Timur. Ruben, I appreciate the invitation and the opportunity to have the conversation. Awesome, man. So for, I know Timur gave a little bit about things in the intro, so tell us a little bit about Penn Foster, what's the scale, what's its impact, and its history. Well, I love, Timur, that you started with Thomas Foster and that vision around bringing school to the students.
Kermit: Mm-hmm. Because at its roots, if you think back [00:05:00] to who those coal miners were in 1890 in Scranton, Pennsylvania, they were immigrants primarily. They were people who did not have access to the traditional education system in whatever way that it existed in 1890. Uh, maybe a little bit different than we have today.
Kermit: But at its core, those are the learners who we still serve today. Mm-hmm. Our focus is really being a great pathway from a high school level of education to a skilled job, and in particular, doing that in a way that is radically affordable and flexible. Because the learners who we serve are predominantly learners that have, for whatever reason, not been able to be successful in the education system.
Kermit: It could be a learner like our graduate of the year from high school last year, a woman name- who is just an incredible woman named Monet Carter. Monet had sickle cell anemia, and that prevented her from being able to be physically in a school every day. Like, she, her body could not, uh, [00:06:00] allow her to be there, and our traditional system is not set up- Mm-hmm
Kermit: to be able to support a learner like that. Yeah. And so Monet found Penn Foster, and it, was able to finish her high school diploma and get into medical school to be able to continue a pathway in healthcare serving others like herself. So there are thousands, millions of learners like this that have faced the traditional system, either not able to graduate from high school, or that the traditional two or four-year college path has not served, and that's why we're here, to be able to help those learners get the skilled jobs.
Timur: That's awesome, man. Shout out to Monet. Can you give us some numbers? Tell us about Penn Foster's scale. Yeah, so we graduated 93,000 learners last year. Uh, roughly half of those, a little more than half, about 50,000, with an accredited high school diploma, and then the other half, uh, in our career college programs, where we are specifically focused on paths to jobs in healthcare, in [00:07:00] the vet industry, and in trades.
Timur: So when you think about trades, think about auto, HVAC, electrician- Mm-hmm ... plumbing. We are focused on, as I said, skilled jobs that give people real pathways to a living wage. Awesome. Awesome. Let me come back to it just one more moment. I, uh, just as you think about the scale and the numbers of the learners who we are serving- So 50,000 graduates, that makes us, if we were a school district, the third largest school district in the country behind New York and LAUSD.
Kermit: We are the largest trainer of veterinary technicians in the country by several orders of magnitude, and we're certainly in the top few when you look at allied healthcare roles like being a medical assistant or a pharmacy technician or a sterile processing technician. Uh, and that's because we are here to be, like I said before, extremely affordable and, uh, and extremely flexible so that most of our learners, if you think about the [00:08:00] demographic, uh, they...
Kermit: about 70% are women, often in- are working parents with one or two jobs. They're having to find times to study when they can to be able to get their way, uh, into the degree and the credential and the skills they need for a better job. Awesome. Yeah. Uh, and Kermit, um, when people think of innovation, they think of, like, spaceships or LLMs, but I think, uh, there's not enough spotlight on kinda innovation in- inside of the classroom when you're serving, uh, a demographic and, and, uh, the students who are working parents and working adults.
Kermit: Can you speak to... I know higher education and educa- especially even faster, has gone through several, uh, technological shifts, the internet- Yeah ... the computer, right, the mobile phone. How is your team using those technologies to serve those students? 'Cause at the scale that you're at, um, you have to do things that are not traditional.
Kermit: So can you speak to that? Well, I mean- Let [00:09:00] me start by coming back to one of the points I made just to make it tangible because I think it'll help to reinforce- Mm-hmm ... why the technology and the innovation is so important. So I said delivering a path to those outcomes at a radically affordable price. Yep.
Kermit: You mentioned $1,500 before. Yeah. So our high school tuition starting, if you come in with zero credits, you can complete high school at Penn Foster for about $1,500, 15 to $1,600. To make a comparison of that, the average, uh, the average school district across the country spends about $16,000 a year- Wow. Wow ... on a student.
Kermit: Mm-hmm. So we're about a 40th of- Yeah ... the cost- Mm-hmm ... of what the traditional education system, uh, costs to be able to serve a student. But we really take seriously the responsibility- Mm-hmm ... for if they're graduating with a high school diploma, what are the standards that they need to be graduating with in terms of literacy, reading and writing [00:10:00] skills- Mm-hmm
Kermit: numeracy, civics, connection, understanding of science, and so being able to deliver the right kind of outcomes. So to do that, you have to be innovating. Mm-hmm. Uh, and that's one of the reasons why I was so excited to be here. What's... I gotta say one other aside just quickly. One of the, one of the beauties of being with an organization with the history and the legacy that we do is we have multiple employees who have been with the company for more than 50 years.
Kermit: Mm-hmm. Mm-hmm. Just think about that for a second. Yeah, that's a lot. For, for most of those employees' time with the company, we were actually a paper-based correspondence course. 

Timur: Wow. So AI is a little bit of a different world. You guys have a print shop, right, still somewhere? Uh, we still do a little bit of printing.
Kermit: We still have a warehouse in Scranton, Pennsylvania. Yeah. And most of that team is in Scranton. But the, the... if you think about the innovation and the evolution over time- Yeah ... still with that core mission for how do we serve those learners, it's tremendous. But let me flash forward to the last couple of years- Yeah
Timur: and the journey in the last couple years in [00:11:00] particular One of the reasons why I was so excited about the opportunity here is you have the, the power of that legacy for what we, uh, for the learners who we serve, the affordability- Mm-hmm ... as a starting point, and at this moment in particular, from a learning technology perspective, I really firmly believed we can deliver a radically better learning experience and high-quality learning experience while being just as radically affordable.
Kermit: And being able to do that in an organization like Penn Foster, that starting from that premise of affordability is allowing us to innovate and have... And sticking within those constraints forces us- Mm ... to innovate in ways that a traditional education institution that's starting at $20,000 a year for a college degree, and that's low for many of those many colleges today, uh, can't even comprehend [00:12:00] fitting within those constraints.
Kermit: So that helps to drive some of the innovation. So it's a little bit of an aside. Yeah. I'm not sure I got to your question, but- No, you, you did, and, uh, I think, uh, w- with, uh, our previous company, uh, Career Karma, Ruben and I have faced, uh, so many just veterans, Uber drivers who, um, kinda run into the obstacles where they wanna learn new skills.
Kermit: Um, there's not a shortage of, I would say, free online, uh, material out there, but, s- uh, students need more than just material. They need, um, guidance. They need help. Uh, they need to be able to pick a career path. They need to be able to graduate and get a job. Can you speak to, um, what does it look like for, like, the student, and how do they, um, kinda find Penn Foster?
Kermit: How do they enroll? And, uh, maybe speak to kinda the behind-the-scenes operations that go into supporting the, I guess, 100,000-plus students who kinda enroll into your courses, uh, every year. Yeah, I... So there's a lot that resonates and a lot underneath that question, Timur. I would [00:13:00] start with, uh, I think one of the points you made there is really spot on, and I think particularly important in the world of AI, on why I think institutions that are delivering quality learning are not gonna be disrupted by just having ChatGPT there- Mm-hmm
Kermit: or having your Khanmigo tutor, and that is that learning is hard. Mm-hmm. Learning, I, I, I don't know how many asynchronous just free courses you've taken. I think I could say I'm maybe, like, a 5 or 10% completion rate myself. Mm-hmm. Yeah. I, I s- get started, and I hit a roadblock, and I find all kinds of reasons why I'm not gonna keep going.
Kermit: Yeah. Like, everything else goes to the top of the to-do list, and that's at the bottom. Uh, and so learning is... If learning were easy- Mm-hmm People could have just gone to the library and check out the books they need and- And they're good. Yeah ... th- they don't need Penn Foster to become a medical assistant.
Kermit: Go read the book and you can pass- Yeah, yeah ... the exam. Same thing with the bar exam. Yeah. Just go read the... But [00:14:00] unless you're Will Hunting- Yeah. ... that's not easy to do. You need- Yeah ... much more to be able to deliver and get through that program. So when you think about our learner in particular, our learner is typically somebody who has struggled in school.
Kermit: So let's take somebody who may, uh, have had to drop out of high school because maybe the school they were, they were dealing with bullying, they were dealing with issues where they needed to be able to work and support a family. Uh, and, uh, and so they had to drop out of high school. They're in their early 20s, and they realize they need a high school diploma- Mm-hmm
Kermit: to get to a better job. Well, f- they've already learned that I'm not good at high school. They've already learned this was h- I wasn't-- this was hard. I wasn't successful in this environment. So the first barrier is actually just a level of self-confidence that you can take it on and that I'm gonna be able to accomplish that.
Ruben: A lot of [00:15:00] times a, a meaningful percentage of our learners, because of the scale and the history we have- Mm-hmm ... come because that learner then has somebody, has a cousin, has a relative, has a friend who says, "You know what? I went, I went to Penn Foster, you should check this out." Uh, or they They benefit from the tens of millions of advertising that we do while they're on TikTok today Yeah.
Ruben: And they see something and they say, "Wait a second, maybe I can do this." And that's what a lot of our marketing is about, is trying to help people understand that there is a path that can serve you and you can be successful and get over that hurdle. Yeah. I w- And then when they come to us, I, that is an- Mm-hmm
Kermit: important part of the journey is, is, you know, some- there's, there's a whole range, so I'm generalizing by far, but a lot of times when our team is talking with learners as they enroll, we have a full admissions team, and that is not a hard sell conversation. That is often a conversation that says, "Well, help me understand what this [00:16:00] experience is gonna be like, and how am I gonna be able to be successful, and what kind of support can I have?"
Kermit: Yeah. I wanna go back to one of your other points where you said that Penn Foster has employees that have been there for over 50 years. Yeah. I think that's important because part of why we created this show is to normalize and show people that are actually using AI in a way that works and helps people.
Kermit: And technology's important, like you said. Understanding the learning journey is important, like you said, but how are you leveraging this institutional knowledge to actually introduce AI either administratively or in the ca- classroom in a way that makes an impact on your organization? Can you talk about some of the- Yeah
Kermit: the use cases that are, are impactful for your organization now? Yeah. Well, let me, um, let me start with context of what the opportunity was that I saw for us to really move the needle with learners a couple of years ago as I joined- Mm-hmm ... and as our team has evolved and thought about how we use AI. And that starting [00:17:00] point was we were almost 100% reactive in terms- Mm
Kermit: of learner support. And we had this view that because we are so affordable- Mm-hmm We can't afford to invest in proactive support and outreach for those learners. And, uh, and when we've tried tests for that in the past, call it 10 years ago, 15 years ago, it was so expensive that it wasn't sustainable by s- while still living up to that promise of affordability.
Kermit: And so if you looked at, in 2023, our conversations with learners, literally 100% of them were because of a reactive response to either a learner reaching out- Mm-hmm ... because they want to enroll and talking with one of our reps, or, uh, because they ran into a problem with an essay or something is stuck in their learning experience, and they're calling into us.
Kermit: And so the vision, one of the primary visions for us with [00:18:00] leveraging, uh, AI, with leveraging ML, uh, models to be able to get much more precise on using our learner data, understand when they're stuck, and they can use support, is start to be very pr- proactive. This point is really important in, in our conversation because I w- I- we certainly, within the organization, there are a lot of people who started from a point of fear- Mm-hmm
Kermit: around how AI was gonna change- Mm-hmm ... our jobs. Uh, we're an organization of round number 700 people. Roughly 450 of those 700 are on the phones every single day talking with learners. And so you start to talk about, oh, we're gonna bring AI agents to be able to have these conversations, and the immediate gut reaction is, "Well, they're gonna replace my job."
Ruben: And then, wait a minute, I'm skeptical that that AI agent can be as good as a human- Mm-hmm ... is. What are you losing in terms of human connection? And so we've had to have a long conversation as a [00:19:00] organization to say, our goal is actually not to reduce the number of people. Mm-hmm. Our goal is the outcome. We need more learners to be successful.
Ruben: And so think about right now, in a given month, roughly 3% of our learners we're in c- we're in touch with, the 3% of learners who actively reach out to us. We have so much room to do- Absolutely ... with the 97% to proactively reach out to them, and that's how we wanna bring AI to bear, is to be able to really leverage the scale of the human connection.
Ruben: And it's, that is, that creates two things. One is it allows us to reach learners in an incredibly efficient way, and I'll come back to some stats on that in a second and some of the partnership we've worked on. But it also allows us to create this combination of the human connection and support when it's really needed with AI as a tool to be able to make that human time much more efficient and effective.
Kermit: [00:20:00] Yeah. No, I, I really love this point about proactive support because so many people when they think about copilots or any of the AI agent customer support things is, is very reactive. And I like that you talked about the staff. Those 400 people almost got promoted, and they have, like, these AI agents that are working for them and figuring out how to do different things.
Kermit: Can you go a little bit deeper into like- Yeah ... some of these use cases that are, that are helping them out? Because it's not just about being proactive, it's how are you thinking about anticipating the needs of people? How are you leveraging the systems internally where there might be a- A retention flag or something that s- Yeah
Kermit: shows a sign where, hey, they might need some more support because when you think about the demographic and serving the student, it's not just about the learning journey. Like self-paced, part of why it is hard is it's a motivation, it's psychology, it's an emotional thing. So how are you blending the AI, the proactive, the human elements to inspire and motivate your students to, to get things [00:21:00] done?
Kermit: Well, I want to be clear to start that we're only in the very, very first inning of the journey. Yeah. Uh, so we're not there yet. Yeah. The goal, what you said, is that those 450 are now promoted and they're managing agents, and we're, like, just scratching the surface- Mm-hmm ... because this takes time. Yeah. This is not about, oh, I'm gonna turn on my AI chatbot and every learner's working because- Yeah
Kermit: it, it's hard. Yeah. I mean, we've been at this for more than a year at this point. It was over a year ago- Yeah ... that we first started our partnership, and we're still just scratching the surface. So we've s- we started very intentionally built try- with a culture of trying to build an experimentation and a learning culture.
Kermit: We talk a lot as an organization about creating ugly pots. Mm-hmm. Uh, have you heard of the parable- No, tell us ... from the ceramics teacher? Yeah. So, um, there, there's a story, uh, it's, I've seen it written up in many different ways, but the story is that there's a [00:22:00] ceramics teacher who splits their classroom in half and tells half the class that they're gonna be graded just by making one perfect pot.
Kermit: Mm. And so they just gotta focus on making one great- And the other half the class said, the, the teacher tells them, "I'm not gonna look at all at the quality of what you make. Just make as much pottery as you can. I'm gonna just weigh the total poundage of pots you make." And by the end of the semester, the, the class that was just experimenting freely was making definitively more beautiful pottery- Yeah
Kermit: because you don't learn by trying to make one perfect thing. You learn by making hundreds of ugly pots, and every time you make an ugly pot, you get a little bit better. Just better. Right? Yeah. I love it. And so we started by trying ha- by talking about this story a lot, and I'll tell you, I kick off every board meeting with telling the board about our ugly pot from the last quarter- Mm-hmm
Kermit: and normalizing that- Yeah ... across the org. That was the first step a year and a half, two years ago, is starting to get the [00:23:00] organization comfortable. And then we said, "You know what? We've found this, these great partners at Rival. Let's just start making some ugly pots." Mm-hmm. Let's start by picking a low risk environment to be able to start to test and learn how to apply the technology and what it can do for us.
Kermit: So we started, as you all know, with taking a pool of leads, not existing learners, because we wanted to make sure we learned what to do before- Mm ... before we started experimenting with learners who we had committed to a contract with. We said, "Okay, here are leads who hadn't decided to enroll, and they're aged leads.
Kermit: We haven't reached out to them in a month. Let's just test. What would it look like if we start using that technology to reach out to them and have those AI agents connect back with our admissions reps and do soft handovers for those leads?" And it allowed us to reduce the cost of re- proactively reaching out and connecting with learners by more than 70%.
Kermit: Wow. And we saw a 30X ROI- [00:24:00] Mm-hmm ... on the investment because of using the technology, the investment in reaching out to those learners with the learners who then said, "You know what? It's, this was six months ago that I reached, but I'm now in a spot I am ready to learn." Mm. And, and getting them set, and we are seeing those learners who we reach back out to continue to persist.
Ruben: Over 80% of the learners who enrolled through that campaign starting a year ago are still enrolled and still progressing towards graduation. Wow. And that's, that is just a fantastic proof point I, I share that example because it's, it, I mean, we started, I've ... You guys will remember better than I will, but I think we literally picked a pool of, like, 1,000 people- Yeah
Ruben: to try to go call. Yeah. And then we tried a couple thousand. And each time- Got better ... we iterated what's the conversation like, how does the handover w- And, and we made hundreds of ugly pots just in that experiment. Yeah. Um, but it started to give us the confidence to say, "Okay, now I can start to see how [00:25:00] this can scale the reach out.
Ruben: Let me now tie that to these points in the learning experience where we're seeing, based on the data, learners tend to get stuck." Mm-hmm. "Uh, Ruben, it looks like you just submitted your essay three times and it hasn't passed yet. Let me proactively reach out to you and set..." Rather than our humans trying to reach out and using a lot of time to reach out, let me pro- let me use AI to connect with you and say, "Hey, can I set up a time or connect you with one of our writing coaches?"
Kermit: And then our writing coach's time is spent as effectively as possible with somebody who's ready and in a spot where they're ready to receive that support. Yeah. Yeah. And it, it's a very wise framework. I would say, uh, when Ruben and I speak to leaders, um, like you said, a lot of the time they wanna build the perfect pod.
Kermit: Um, sometimes what we see is that they wanna experiment, but then they experiment on pilots and things that are not aligned to driving ROI. [00:26:00] Um, and so with your leadership team, um, can you, uh, maybe give a behind-the-scenes look in terms of the voices in the room? 'Cause what we're- Hm ... seeing is that there's usually folks who are very pro-AI, some are hesitant with any new technology.
Kermit: There is always, uh, kind of folks who might have doubts. Um, what advice do you have for our, our audience who might be listening, they might be maybe a year, um, kind of behind where Penfastar is today, but they're, they wanna do stuff with AI. Some leader- some people on their leadership team are pro, some are a little hesitant.
Kermit: What, what do you, kind of, what advice do you have for them? I'll go back to the point I made a little bit ago. Like, we've been in this journey for coming up on two years now. Recognize change is hard- Mm-hmm ... and, uh, you've gotta make a really proactive investment in that. So we have, uh, we've invested in training across every [00:27:00] single manager in the company.
Kermit: So not just at the executive level, but, uh, we're a primarily virtual company. We do have our, our frontline learner support team- Mm-hmm ... is in office in, in Arizona just outside Phoenix, but everybody else is virtual. One of the investments we decided to make last year is we did workshops and training sessions for managers where everybody came together in person, and we invested in, uh, with a partner to run AI training sessions, and g- just getting people- Mm-hmm
Kermit: testing and experimenting, and people who walked in with, uh, some skepticism End up becoming some of the greatest advocates. And I'll, I'll, I'll take one specific example that really sticks out with me. One of our learning designers had an initial frame that she thought, "Wow, this... Like, they're really trying to apply this technology to replace my job, to take AI," because they're- we're trying to build, and we [00:28:00] actually had given her and her team a challenge to say, "Try to tr- create an entire course rather than using the legacy process that we use using overseas subject matter experts and writers, et cetera.
Ruben: Build the whole thing with AI with just this team of three or four." Mm. And her initial frame was, "This is... They're trying to get me to experiment to create the AI agents that are gonna then just replace my job." But then halfway through she realized, "Wait a minute, I have all these things that I have to do manually that I can create- Mm-hmm
Ruben: GPTs and agents to do for..." And she's done an amazing job. She's come up with amazing names for them. She's got one called Check Norris- ... uh, that- who scans, when they have an assignment, scans the assignment to test reading level of that course. Mm-hmm. And makes sure that the reading level for that course, if this was targeted at a 10th grade reading level, is this a 10th grade reading level across.
Ruben: [00:29:00] Well, this was something that she used to have to do manually- Mm-hmm ... re- and would spend hours and hours. And now within five minutes, Check Norris has gone through the entire course and given her the 18 things that she needs to go back and take a look at. So now she's able to s- rather than spending her time on the road, she's spending her time on the true analysis, and it's, it's really let her free.
Kermit: So that, I would say- Mm ... is the starting point. You've gotta invest in the time to bring people along the journey and not assume they're just gonna get there on their own. Yeah. Yeah. I mean, staying on this whole ugly pot analogy, the, um, culture of experimentation. Yeah. When we're at ASU GSV- Yeah ... you said something that stood out to me, and you know what I'm gonna say.
Kermit: You, you s- you said, "I wanna do 50 experiments this year." But since that conversation, I found out you wanna do way more than that. And in an industry like higher ed, where- Mm ... it's seen as slow moving, they're very hesitant to try things. [00:30:00] They can be patient because they can, but we're in a country that's investing heavily in chips, modern infrastructure, data centers, in order to be a leader in AI.
Kermit: Shouldn't we modernize our higher ed institutions to prepare the future leaders of America? And, um, is there a cost to not doing anything? So I know there's multiple questions there, but, like, talk to us about the experiments, how you've been able to move fast, and if there's a cost to higher ed leaders that are doing this.
Kermit: Well, let me start with- What I think some of the real costs and constraints are in the traditional education system. Mm-hmm. And having been a teacher, having... Actually, both my parents were educators. We didn't talk about, my dad was a college professor, my mom was a high school French teacher, and then when I was at Cengage, as you mentioned before, Cengage serves, most of its business- Mm
Kermit: serves traditional higher ed and K-12 institutions. One of the things that became painfully ingrained for me is how the annual academic calendar [00:31:00] constrains innovation. And think about anybody who's listening or watching this podcast who's in a modern software tech company would know you're trying to do new releases continuously.
Kermit: Mm. Multiple times a day running tests. Well, in the traditional education world, I think about Cengage serving schools. We had one shot a year to launch a new product. Maybe if you do it at the semester, maybe twice a year. Mm-hmm. So literally we would launch something for August, and we would be holding our entire years, like, "Did this work?"
Kermit: Like, "Oh, it didn't quite hit- Mm. Mm ... the way we wanted. I guess we'll try again next year." Next year, yeah. "Let's build out the road..." But, and just, like, think about how insane that is in a world where Claude is updating, you know, an- you have Anthropic and OpenAI are updating- Multiple times a day ... their model.
Kermit: Daily, yeah. Daily. Daily. I can't even keep up. Uh, it just, there's just this massive disconnect, and it's, when I came to [00:32:00] Penfoster, one of the reasons why I was so excited about it as a platform because- Again, m- m- we're just lucky, uh, in some ways, but the model from the start was designed for affordability and designed for flexibility.
Kermit: And that flexibility meant we'd have no constrained academic cycle. You could start any single day. Uh, and by the way, our commercial model is set up so that you start for as low as $20 down, and then $60 a month while you're learning. And so our economic incentives are based on effectively a subscription model.
Ruben: If we're not helping you learn and progress, we're- you're gonna stop learning and you're gonna stop paying. And so that combination leads to two really powerful things. One, we have 5,000 new learners enrolling every single week, so we can A/B test in a way that no- that very few, I won't say nobody, but very few in the traditional- Mm-hmm
Kermit: education industry can. There are, um, institutions like Western [00:33:00] Governors and Arizona State and Southern New Hampshire, Purdue Glo- there's a small handful that have tried to tr- drive this kind of... But even they have constraints from their existing academic and faculty model that we're able to separate from.
Kermit: And so building this culture where our, our organization gets comfortable with embracing that as one of our advantages, and if we don't embrace it, because there are disadvantages- Mm ... to our learning experience compared to what you get when you pay for being on campus at an Arizona State- Mm ... or wherever it is you are.
Kermit: So we have to really fully embrace our advantages and drive that experimentation to drive better outcomes. Makes sense. Mm-hmm. L- looking out a couple of years kind of into the future, like where do you see, um, kind of Ben Foster's team, like e- experimenting on and like investing into which areas of the, uh, institution do you- are you most excited to invest in, in terms of unlocking like real impact and real change, not just for the learner, but [00:34:00] also for, for the business?
Kermit: There's a few dimensions I'd highlight. Let me start, because we've been talking about the core learning experience, let me start from the learning experience. And today, what we are delivering is still not nearly differentiated enough for what we should be doing for our learners. And as one very tangible example, if you are A 30-year-old coming back to high school to earn your high school diploma, or you're a 17-year-old that your school wasn't serving you, you were Monet- Mm-hmm
Ruben: and, and needed to find, Monet needed to come to a different... Right now, we fundamentally deliver the same experience for you. There's no way that should be the case. Mm-hmm. And so there's a, um, part of the vision for the learning experience is being able to build a much more adaptable, dynamic learning experience for that individual learner that allows us to tailor [00:35:00] your journey based on the skills you have coming in, where you're coming in personally and emotionally, and AI allows us, and modern technology from a development perspective, allows us to do that in a much more affordable and realistic way than we would've before.
Kermit: And that, that's not just about how we apply AI to deliver the learning experience, right? Having a coach that can talk to you at scale- Mm ... that we don't... And, and hear from you what your fears and concerns are to then build another. But also how our engineering teams have just accelerated their velocity, and our product teams are able to build.
Kermit: We don't need to spend months building out roadmaps and testing design when you can build and create so efficiently. You just build it, put it out there- Mm ... experiment. If it didn't work, throw it away. The cost of code has just gone so far down that it allows us to accelerate this pace of innovation to deliver that kind of experience, and we wouldn't have been [00:36:00] able to consider some of the things that we are around adaptive platforms, around how quickly to innovate content if it weren't for that technology.
Kermit: From your vantage point, right, what are higher ed leaders not doing from your perspective that you feel comfortable sharing that you think that they should be doing given their seat and the importance of their position?
Kermit: Higher ed leaders is a very broad term. Mm-hmm. And my mind goes to the difference between institutions that are going to be fine- Mm ... uh, you know, f- and still gonna exist 50 years from now, and institutions that are struggling because of what is happening and the disruption that's, that's, that's coming in the education world.
Kermit: I would start for all of those institutions getting way more focused on what are the real jobs that my institution is [00:37:00] preparing my learners for, and is there the right ROI for what my learners are investing in to what those jobs are? And, uh, let me give you just a stat to, to reinforce that. So we did a survey across the families of our traditional age, under 19 high school learners, uh, and 80% of those families didn't believe that going to college was gonna be the best path for their students to get jobs in a world of AI.
Kermit: Wow. And this real concern, and, and there's a Johns Hopkins study from a couple years ago, and this was even a couple years ago, that showed that there was no longer a wealth gap between a high school diploma and a college diploma, uh, because... And the challenge is there's just been such a disconnect between the real signal of what that diploma earns [00:38:00] you over time versus the cost of that degree.
Kermit: And I am a, a big believer in the value of higher ed. I, uh, am a real advocate for the impact that it can have. But unfortunately, the way the system has built, there's just been a, a, an incentive to consistently deliver more and just focus on the quality of the pedagogy, the quality of the academics, the quality of the experience, without directly connecting the cost of that quality with what it really is earning people at the end of the day.
Kermit: So that, I think, is the starting point. And then if you find out that your, uh, that the job is gonna only earn X- Mm-hmm ... well, that tells you your program can only cost Y. Let me give a really painful example of that. Uh, in a prior life, you mentioned I was at KKR. While I was at KKR, we unintentionally became, uh, the largest equity holder of a for-profit higher ed business called [00:39:00] EDMC.
Kermit: Mm-hmm. Uh, it ran a school called, uh, several schools were under the EDMC umbrella. Se- Arts Institute, South University, um, Argosy University. But the, uh, I was the lead on the board for KKR, and those institutions had really high quality programs. The Arts Institute had this amazing fashion design and interior design program.
Ruben: They're running runway shows here in New York City. The, the, um, the Uh, culinary program, had fantastic, uh, uh, kitchens that learn-- But they just cost too much. And so the first graduation that I was at, I talked with a student who graduated from Penn Foster's interior design program, and it cost her $1,500.
Ruben: And she said, "You know, I actually h- took interior design from the Arts Institute 20 years ago, and when I finished school, [00:40:00] I had $40,000 of debt. And it was 2008, and the financial crisis hit- Mm-hmm ... and I couldn't find a job, and I ended up- Mm ... working retail, and it took me 15 years to start to pa- And I had given up on my dream of being in interior design because I never thought that there'd be a path to be able to make that work.
Kermit: And then I found your program. I thought, this is less than a 10th of the cost, and actually at $1,500 for that, to redo my certification, that actually gets me to a job that the, the ROI makes sense. Yep. Right? And so if that disconnect between the job you're really preparing for people for and what it pays versus what the cost of your program is, um, then you're gonna be at risk as a leader.
Kermit: Yeah. That makes a lot of sense. Uh, go ahead, Tim. Uh, I, I was gonna change the gears a bit 'cause, um- Go for it ... and I, and I think it's gonna come, come full circle. Um, so you mentioned, um, [00:41:00] several points in your, in your career. So you, you were at KKR, you were a physics teacher, and you come from a family of educators.
Kermit: Um, can you just kinda tell us a little bit about kinda that journey? 'Cause in some ways you help your students navigate their journeys into economic mobility, into acquiring new skills, into kinda jobs for them and kinda their dreams. What... Can you tell us more about kinda your journey? How did you... Like, before 18 years old, like, what influence did your parents have on you, and, like, how did this, how did Kerman's, uh, career unfold?
Kermit: Well, I'll, I, I'll add in, uh, in addition to being a physics teacher, I was a very mediocre basketball coach- Okay ... and a terrible tennis coach. Okay. But that's what happens when- That's awesome ... you wear multiple hats when you're, when you're teaching high school. I'll start with my parents had a tremendous influence on me.
Kermit: Um, I mentioned they were both educators. My mom, uh, [00:42:00] actually, she, she was a high school French teacher for most of the time growing up for my sister and I. We grew up in a very small town in West Virginia. She had been on a path to, to teach in college, to be a professor as well, but a, the French teaching position at a college prep school is about a half an hour down the road away from our, our s- very small town, uh, called Bethany, West Virginia.
Kermit: Uh, that French teaching position opened up, and she went for and got that so that my sister and I could go to that school for free. Uh, and actually, I was on... I'm now on the board of that school. I was on a call- Awesome ... this morning with that school, and still ha- my teachers from there- Mm-hmm ... are still mentors, uh, of mine.
Kermit: And that certainly inspired my connection with education. Even though I, I don't think I quite appreciated it initially, but it's what ultimately brought me back to the, uh, to decide to teach at Teach For America as, as recognizing what an impact that had. Um, [00:43:00] I- Let me throw out a couple of other points just from a career perspective.
Kermit: Yeah. And, uh, I think the general reflection I've had is when there's a, a fork in the road, to take it. And even if it feels, uh, like it might be a direction that doesn't make sense at the time, if it's something that's gonna really stretch and challenge me and throw me into something new, then to, to jump into it, uh, at that time.
Kermit: So you've always taken kind of the left path, the more riskier, or something that could be perceived as, um- It- ... different than the norm. Perceived as risky at the time. Yeah. And I think the... Let me, let me actually bring it back to- Yeah ... a conversation with my mom. Um, flash forward several years. This was after I was teaching.
Kermit: I went to grad school. I was doing an, an MBA in education degree, and I had an opportunity to go back to Teach for America- Mm ... uh, to lead a region with TFA, but I got this opportunity to join [00:44:00] KKR, the private equity firm, because I had also worked in a prior life at, at the consulting firm McKinsey. And I, I don't have to tell you the analysis economically.
Kermit: But also, just conceptually, I knew nothing about the world outside of education- Yeah ... really, at its core. I grew up with educate- I knew education. I was passionate about education. And so I k- I could see that there was this whole world I was gonna be thrown into that was gonna stretch- Mm ... and challenge me in different ways.
Ruben: But it felt like at my core, I was turning my back on my passion. Well, at that time, my mom was, uh... had decided to retire from teaching. She was in her late 50s, and she decided to go to seminary full time for three years and become a minister. And I remember talking with her about it and say, um, "Wow, Mom, this is...
Ruben: Most people would be thinking about retiring for good- Mm-hmm. Yeah ... and you're starting something totally new." And it's, it's always... I can remember where I was standing in this [00:45:00] phone call, and she said, "You know, Kermit, God willing, I've got another 20 years- Mm-hmm ... and that's plenty of time for a whole new career."
Ruben: Yeah. And that has just stuck with me whenever these moments- Mm ... have come up that feel like they're risky- Mm ... and it feels like, oh, wow, if I go, if I go on this private equity path, it means I've turned my back on education. Well, no, there's plenty of time- Mm-hmm ... for two or three... There's plenty of time to make some ugly pots in our careers.
Ruben: And still be able to come back and change that direction in the future. And w- what's interesting, 'cause, uh, like R- Ruben and I, we've taken plenty of perceived risks, but I would say, like, i- in anything you do in life, like, a lot of people don't know their superpowers, but the folks that understand kinda the worlds, like, the, the worlds that they came from that shaped who they are, I think make them better leaders.
Ruben: Like, with your background, as a teacher, I'm sure, like, leading Penn Foster, [00:46:00] it makes you kinda... It wasn't a straightforward path. A lot of listeners feel like you go to college, you get a, a job, uh, in the corporate world, and then you work for 30, 40 years, and then you retire. And maybe that was the case, like, 50 years ago.
Ruben: Yeah. We're, we're living in a very dynamic world where people are kind of navigating their careers at different points. Um, something that you mentioned, uh, when you said speaking to your mom, um, R- Ruben and I, I don't know if you know this story, but Ruben and I, um, after college, um, decided to break into tech.
Kermit: Uh, and we spoke to our moms separately, but, um, I told my mom that, "Mom, I'm gonna, uh, quit my job," uh, I was doing project management at AutoTrader, "and buy a one-way ticket with this guy Ruben and break into tech on the West Coast." And, um, she was surprisingly very supportive of that. But to me at that time, it felt like a big risk.
Kermit: Right. But looking back, it was a perceived risk 'cause [00:47:00] I could always find another job. I could always, uh, at that time in my 20s, I could always go stay with my parents. But I'm so grateful that kinda we took that risk and that chance, uh, to get where we are today. Um, with your story though, uh, this path of, uh, education, um, KKR, uh, Cengage, now Penn Foster, kinda what's, what is the drive behind that?
Kermit: Like, what do you see yourself, uh, kind of... W- what- what's driving you to, like, make this change in terms of kinda w- getting up in the morning to kinda help students, but also are there, is there, like, other things you're, you're inspi- you're inspired by to do? Let me come back. I'm gonna answer a different question that you made me think about for a second, or I, I, I'm gonna talk about something a little bit different that made me think about...
Kermit: 'Cause I started thinking about the learners who we serve- Mm-hmm ... the learners who I served when I was teaching in St. Louis, and I just want to acknowledge that we've got the privilege of being in a [00:48:00] position with families- Mm-hmm ... who are supportive, who have... We've, we've gotten the opportunity to build this confidence- Mm-hmm
Kermit: to be able to go make those ugly pots from a career perspective- Mm-hmm. Yeah ... and know that we're, we're gonna be okay. Yeah. Right? And again, I just come back to- Shout out to Mom. Shout out to Mom. Shout, shout out to Mom. And may everybody have somebody like that in their life. Yeah. And that is one of the things with the learners who we serve when I taught...
Kermit: We do an in-person graduation every year. It's an amazing event. You all should come this year. I, I heard about it. You guys fill up a stadium- Yeah, we f- ... in Georgia, Duluth, Georgia ... we fill a stadium, and d- Yeah ... this year it's in Duluth, Georgia. Next year it's in Tennessee. You should sponsor it, and- Yeah. And should come along, and but you ta- So many of those learners who say the, that confidence and support That is one of the biggest hurdles.[00:49:00]
Kermit: And I wanted to bring up that thread because I wanna come back to how I think about fundamentally how AI can help to really leverage and change the learning experience, but it's not the only answer. You know, the, uh, listeners might be familiar with Khan Academy. Khanmigo launched this amazing ch- and I think has done one of the most amazing job in, in building an AI powered tutor.
Ruben: And, you know, recently Sal Khan said, "Yeah, that basically had no discernible impact." Mm-hmm. And it's because an AI tutor can't be the support, the accountability partner- Mm. The, the person who shows up for a learner who's, who's just learned that when something doesn't go right, like, "You know what? I should've, I shouldn't have even tried.
Ruben: I'm not good enough." Mm-hmm. "This is too hard. I'm not good at math." There's this video we have with a learner, uh, in Brooklyn who when she was taking our algebra course trying to get through high school, and [00:50:00] we, she graduated and we were doing a video with her at graduation, and she said, "I got, I got to that part in the math where it was numbers instead of letter."
Ruben: Mm-hmm. "Or, or letters instead of numbers. I was like, 'No, this is not working.'" Mm-hmm. But she had the support to be able to give her the confidence to try it, and that is, I think, what is critical as we think about how do we take the kind of technology that- Mm-hmm ... that you all are building and combine it with the people on our teams to help learners be successful.
Kermit: It's being able to make sure that our teams aren't spending the time on the things that are tactical and administrative, but they're spending the time helping to show up for Ruben or show up for Timor, show up for Brooklyn to, when they need that human support and confidence. When you, when you said the Khanmigo example, it made me think about that MIT study about, like, the 90 plus palettes that have been tried in the enterprise that haven't worked out.
Kermit: Yeah. You're talking about ugly pots. Um, what is a way to... H- Can you talk about an example of an ugly pot that actually didn't [00:51:00] accomplish what you wanted it to accomplish, and what you did to change, adjust it to make it better? Because I think that in higher ed, which has a culture of, like, perfect As- Mm
Kermit: 4.0s, like, PhDs in power on the administrative side, not being comfortable actually, like, not getting a perfect A when they try to create an ugly pot and adjusting. So how do you, like, shift the mindset? What's the mindset that people should be thinking, and, and what's a practical example about that? I'm trying to think about how I pick just one ugly pot.
Kermit: You know? We've probably made about a thousand just this year. Um- Ah, here's, here's a very good example. Um, we worked with Learnosity, who's one of our partners on assessment to build out a, an AI-driven writing coach and use their technology because actually writing is, i- in particular across our programs, is one of those, uh, courses, whenever there's a writing assignment, we'll find our learners get stuck.
Kermit: We have more than 20,000 learners a [00:52:00] year who get stuck and just stop when they've got a writing assignment. And as one of my high school stud- uh, graduates at, at graduation once said, she's like, "That writing assignment, I hadn't written anything that didn't have an emoji in it, and then you wanted me to write a five-page essay with inline citations."
Kermit: Uh, and so I understand why they get stuck. And so we put all this work into an AI coach to scaffold and support them along the way, and we rolled it out, and the first version had almost no impact because we just launched it out there and we hadn't yet iterated the learner experience and the learner support and coach.
Ruben: And so we had... The, the next step What it, what cracks me up about this, we put all this work into this technology and we're like, well, we just haven't helped them understand how to use it and w- what it looks like- Mm-hmm ... to try it out and just give it a shot. And so we literally recorded a very rough, it was a nine-minute video that we embedded.
Ruben: Think about this. [00:53:00] In this generation, we're like, "Okay, watch this video. It's- it's almost 10 minutes long-" "... just to tell you how to use this." And when we rolled out the nine-minute video with the write-in coach, then the completion rates on that course went up by 15%. I believe it. And, and so we've gotten better.
Kermit: The video's got a little sharper since then- Yeah ... but it's, it was just the, such a great example for me of, you put all this work into this really high-tech thing, and then you realize, w- let me just record a video so I can tell- Mm-hmm ... learners how to use it- Yeah ... and give them the confidence on how to get started.
Kermit: You've got, you have to keep experimenting, because the things you think will have an impact, like Khanmigo- Yeah ... uh, don't if you don't really put yourself in that learner's shoes. Yeah. Yeah. Should we s- sh- ra- rapid fire? Yeah. Let's, uh, so we have this, a- as part of the episode, we have, uh, a section called rapid fire, uh, where we ask you questions.
Kermit: Um, you can give one word, one sentence responses, but this will [00:54:00] help our, uh, listeners get maybe some kind of practical, tactical advice on, uh, how to kind of borrow or, uh, kind of get wisdom from you. Um, my first question is around kinda your, your daily routine and habits. Uh, being a CEO, kind of navigating, uh, your career to where you got here, what would you say are some of those, uh, daily routines, habits, and practices that you do every day?
Ruben: Morning exercise, and then morning journaling. Uh, the exercise, probably familiar with, uh, for everybody. I will say, for those who are getting beyond their 40s, needing to mix it up with a little bit of yoga- Yeah ... a little bit of Pilates. Pilates, yeah. A little b- You can't just do one thing. But then the reflection, I started this several years ago.
Kermit: I journal. I target 20 minutes every morning. Before I turn on anything else, I just sit down and I let myself just free-form whatever top is my top-of-mind journaling, and I find that reflection really- Mm-hmm ... uh, incredibly valuable. Yeah. Related to reflection, routine, [00:55:00] exercise, we're rhythmic beings. Like, we have a heartbeat.
Kermit: Yes. I'm a musician. Um, are you a music guy? Like, do you listen to any music that, that gets you into the right mindset to start your day? Tell us about that. I, I always listen to classical music while I'm writing- I love it ... to start the day. Awesome. Yeah. I wish I were more musical. My wife's a piano player, she- She is?
Kermit: She's, uh- Maybe you'll perform together one day ... she's m- I wish I had stuck with it when I was younger. Yeah. Um, this one is about kinda counter beliefs. Like, is there a belief or a principle that, um, you follow that you believe other CEOs, uh, uh, kinda either don't believe or have a different perspective on?
Kermit: The thing that's coming top of mind for me, is particular front of mind right now, is that we have a real responsibility on where the employees whose jobs are changing and being disrupted, where they land- Mm-hmm ... as we apply technology. Uh, [00:56:00] and that's one we should take just as seriously as how we apply the technology for financial benefit.
Ruben: And I'll give a shout-out to Amazon, who we're taking as an inspiration right now, and their career choice program. Mm-hmm. Where they spend... You know, they're using the education benefit, which all of us can tap into as CEOs in the US. Uh, and so they're spending over $5,000, is available for every one of their hourly workers.
Kermit: 5250, right? 5250. Yeah. It's actually gone up this year, but 5250 per hourly worker for them to go through education and training programs. Their only measure of success of that program that they hold their learning partners to is that that employee gets hired into a job that pays more. Mm-hmm. And that job doesn't have to be at Amazon.
Kermit: Mm-hmm. Uh, now you can look at that and say, "Well, it's good to be Amazon." But I think taking seriously, uh, we talk a lot about this as a team, we're, we're an organization that [00:57:00] invests in a mission focused on helping people having the skills for a path to better jobs. We gotta take that seriously with our own team as their existing jobs, as we've talked about, are gonna evolve radically over the next few years.
Kermit: Yep. Something that we talk about are, is the importance of relationships and moving at the speed of relationships, and now you're talking about jobs. You've been at Cengage, KKR, McKinsey, now Penn Foster. You're in New York City. You probably had a lot of amazing dinners, and breaking bread with people is important.
Kermit: What's your favorite restaurant in New York City? Oh, favorite restaurant in New York. Or the best restaurant experience you've ever had. Uh, the, um, the best restaurant I've experience I've ever had was an omakase sushi restaurant in Tokyo with my wife and I. And the best thing about it is we couldn't read anything, and so we just put ourselves in the hands [00:58:00] of the, of the chef.
Ruben: And, uh, we cl- and also because it was in yen, we had no idea what- Yeah. ... what anything cost. I was just lost. I won't tell you what it ended up being at the end of the day. It was a vibe. But we just immersed ourself in the experience. Yeah. We were singing. We were opening the premium sake. We were getting extra tuna belly.
Kermit: Yeah. Had, uh- And just to- felt totally embraced by the people at that restaurant. And I, I like that analogy because you talked about being proactive and anticipating and feeling service and servicing organizations. Was there anything particular that they did that stood out to you from a customer service perspective or a experience perspective while you were there that stood out?
Kermit: The, the first thing that... Well, it was called Sushi Kohanten, by the way. Mm-hmm. This was probably 20 years ago, and I still remember it from the experience. I just still remember the chef trying to teach [00:59:00] Libby and I Japanese. And we just had this ongoing conversation. Arigato gozaimasu. Arigato gozaimasu. I still remember it, yeah.
Ruben: I love Japan. Yes, man. Let's... Love it. Uh, this one, um, it's a little selfish. Uh, uh, it's the selfish que- question 'cause R- Ruben and I, we meet a lot of, uh, higher ed leaders. Um, and the question we get is, does the Generation Z or, like, does, does the current generation pick up the phone? Um, you guys have- Mm
Ruben: 400 people, uh, in the call center, so can you kinda demystify for the audience, like- That's a great question ... do, uh, kind of, does this generation actually pick up the phone when you call them? So I call, uh, roughly 10 learner, 10 graduates every single month. The team just gives me a list of here's 10 learners who graduated this last month and the programs they graduated from, and I just pick up the phone and cold call them from my cell phone.
Kermit: Yeah. And, uh, my hit rate is 60%. Love it. Just out of the [01:00:00] blue, pick up the phone- Yeah ... and call. Usually six out of 10 will actually answer the phone. Yeah. So just using that qualitative data point, people will answer the phone. Will they look at email? Probably not. Yeah. If you're relying on email as your communication tool- Yeah
Kermit: your hit rate's gonna be pretty low. Uh, but I've been em- I've been pleasantly surprised by how often they will. And they will especially pick up the phone. If they don't answer, I'll usually text, and then they'll often call me back. Yeah. Well, you just touched on the omni-channel approach. So if you call someone and they don't answer, you text.
Ruben: Like, do pe- Leave a voicemail ... will, will pe- leave a voicemail, like email. Will people pick up the phone from a digital worker, and, like, how do you think about how... I know you said there's places where you want Penfoister to be that we're not at yet, and we're just at the very beginning. But do you think that people are going to respond to digital workers over the phone or text or email, and where do you think this is all going in the future?
Ruben: I don't think we can generalize. [01:01:00] I think like any good, uh, consumer focused or personal focused, there's gonna be everything under the sun. Uh, but what I will say we have found, this goes back to the ugly pots- Mm-hmm ... are not just about, hey, I built the agent, and let's put the agent into the wa- It's about experimenting on those models.
Kermit: It's something that we've experimented with without Rival, is being able to do that on the channel approach and figuring out it might be totally different for you, Ruben, than it is for you, Timur, than it is for me on what resonates the most for you, uh, in terms of that communication mode. And so the onus is on us as institutions to experiment, to test, to even just ask you on the way in, uh, what that experience is like.
Kermit: Yeah. What's your preferred, uh, channel, right? True. And I, and I think that goes, uh, to the DNA, like the same way, um, back in, uh, 1890 when, um, the school came to you 'cause you couldn't just go to school. I think that's the future [01:02:00] where AI agents will learn to adapt to SMS calls. Um, they'll start building that- those relationships, you know, so people are expecting, and I, I really appreciate kind of the example you shared about kinda you being on the phone and actually- That's awesome
Kermit: speaking to students 'cause, um, then you actually realize, like, they might not have picked up the phone to call in, but they will answer. They will, uh, actually be pleasantly surprised that someone cares about them, and then you can actually build a real kind of bond and a relationship, um, with that person just by, through voice, right?
Ruben: Not just an email. Let me come back to why some of the examples we used around why AI tools or AI tutors may not work to transform the learning experience and, uh, the way people think. Having a- an AI tutor sitting there, I compare that to Think about a lecture hall in a traditional higher ed classroom, and you've got a couple hundred students in the [01:03:00] lecture hall.
Kermit: That student who's sitting at the front of the lecture hall and raising their hand and then coming and seeing the TA afterwards, they'll use the AI tutor and they'll be, and they'll benefit from it. They were gonna be fine anyway. Mm-hmm. Mm-hmm. The student who's falling asleep in the back of the lecture hall, uh, who was up too late last night doing whatever-
Kermit: uh, and, um, and then just kind of wandered in a few minutes late and then wandered back out, they're never going to proactively tap onto that tutor. And that's, at least from our experience in our first drafts, that's what we found. The, the learners who were using- Mm-hmm ... the tools that we were putting out, when we weren't finding ways to proactively engage the right learners, the learners who needed the support, the learners who were using it were the ones who were already prog- they were going to be fine.
Kermit: And so we saw no noticeable impact on outcomes because we weren't getting it to the right people. All right, so to close this out, you know, my favorite movie's Gladiator. You're in the arena. You're a leader. What do you, what advice [01:04:00] do you have? How do you wanna close us out to people that are listening to this podcast?
Kermit: What's, what should they take away? What should they do? Keep a learning mindset for yourself personally, for your teams. We're in a world where change is just the given, and that can create an incredible amount of fatigue and stress across your teams. But the more that we can face that as organizations, as individuals, as learners, and recognize that things aren't gonna be perfect, it's gonna keep evolving, but if I can just embrace the learning that comes along the journey, uh, then it will, uh, then you and your teams will be all right.
Kermit: I gotta come back to your one other question. The reason why I paused and struggled with my favorite New York restaurant- There it is ... is there's not just one. My favorite thing about food in New York is the hole in the walls. Yes. It's the bagel joint. Mm-hmm. It's the slice of [01:05:00] pizza. Mm-hmm. It's the taco.
Kermit: Like, that is, that is where I wanna go- Yeah ... in New York. My board hates it because I never wanna go to a nice restaurant. I'm like, "Let's just go down to the joint down the street." The joint down the street. Exactly. Yeah. That's the best, that's the best thing about cities like New York or Miami. Yeah. It's, it's the amazing food that you get right off the street.
Kermit: Shout out to New York. Yeah. Shout out to the food. Shout out to the people here. Shout out to the team here that put us all together. We appreciate you coming, for joining us. Thanks for having me. I so, what a wonderful conversation and, uh, thank you for your partnership. Yeah. Let's keep building.