On June 20, 2018 Degreed acquired Pathgather. The terms of the acquisition were not disclosed. All Pathgather employees are joining Degreed, creating a team of nearly 250 employees. This represents the merger of two companies present at the birth of the now-booming Learning Experience Platform (LEP) industry. Degreed and Pathgather have been direct competitors since the start. As a single entity, they are formidable with a client base of more than 200 organizations, with over 4 million licensed users and nearly $100 million in funding. From a learning science perspective, the marriage of psychology and brain science—Degreed is now stronger as well.
Degreed’s LEP platform uses a broad set of user data along with AI and machine learning to build individualized learning paths for each employee. The platform then recommends and pushes relevant content to the employees based on their wants and needs. Pathgather takes a similar approach, but has a more engaging, social, and collaborative user interface that is a hit with clients and engages a broader set of learning systems in the brain. Pathgather also incorporates behavioral “nudges” that provide input and feedback on the effectiveness of one’s learning. This enhances engagement and also leave the learner poised for behavior change. Finally, Pathgather brings a wealth of additional user data into the mix that allows the analytics and reporting team to drill deeper and provide more effective insights at the general, but also the specific level.
Degreed plans to take the best of both solutions as it moves forward as one entity. This includes plans to expand the quantity and increase the overall quality of learning content, to incorporate a more social and collaborative user interface, to continue to improve and fine-tune the AI and machine learning algorithms with the influx of new data, to enhance reporting capabilities, and to continue developing skill rating and certification technologies.
The LEP Market is Exploding and Degreed Solidifies Its Role
Simply put, LEPs are the wave of the future, and that future is now. Although Learning Management Systems (LMS) still dominate, their market is growing at less than 5% whereas the LEP market share is growing at almost 200%. There are a number of reasons for the growth of LEPs and the decline of LMSs.
First, employees, but especially younger employees believe that they will hold multiple distinct jobs in their lives and want to continually expand their knowledge and skills base through access to high-quality learning tools. However, they want this learning to be seamless with their day-to-day workflow and lives and readily available on any device at any time. Employees want visually engaging, mobile-friendly interfaces, that are intelligent, social and collaborative. They want to easily search for answers and to have learning content pushed to them based on their preferences, job description, tasks to be completed, etc. They want the “Netflix for Learning”. Although employees are not experts on learning science and often their wants do not align with their needs, in this case, their demands align with some important aspects of enhanced learning. For example, engaging content and user interfaces lead to an approach motivational state. When the learning goal is to gain knowledge and to learn new facts, an approach motivation will often (but not always) focus attention, which improves processing in the cognitive skills learning system in the brain. In addition, easy search and 24/7 availability mean that learning can occur in context when the learner already has important information activated but needs to add a piece or two of critical information. Finally, having content pushed to the learner based on their preferences and job description leads to a feeling of empowerment and increased engagement, as well as more well-rounded and educated employees.
Second, organizations are realizing that learning is a profit, and not a cost, center. It leads to better more effective employees, but also employees who are more engaged, more satisfied and more likely to stay on the job. LEPs generate profits by molding high-quality, engaged, and satisfied employees.
Third, from a learning science perspective, LEPs optimally engage the cognitive skills learning system in the brain. This system is about knowing. It evolved to learning facts and to gather knowledge. The cognitive skills system recruits the prefrontal cortex, hippocampus and other medial temporal lobe structures and relies heavily on working memory and attention. LEPs focus on brief bursts of engaging content (often called microlearning) that are processed effectively within the typical working memory capacity and attention span of learners. Cognitive skills are learned more quickly and efficiently with LEPs than with an LMS.
Learning Science Advantages of Degreed’s Acquisition of Pathgather
I have written extensively about the psychology and brain science of corporate learning. I have outlined the psychological and neural basis of three distinct systems in the brain and how well corporate L&D platforms engage these systems. One system is the cognitive skills learning system in the brain (described above) that mediates the learning of knowledge and facts and recruits the prefrontal cortex, hippocampus, and medial temporal lobes. This system relies on working memory and attention. I call this the “what” system and it mediates hard skills learning. The second is the behavioral skills learning system in the brain that mediates the learning of behavior and recruits the basal ganglia. This system does not rely on working memory and attention and instead relies on interactivity in which behaviors are rewarded or punished in real time. Rewarded behaviors lead to dopamine release in the basal ganglia and an increased likelihood that behavior will be elicited again in the same context. Punished behaviors do not lead to dopamine release in the basal ganglia and lead to a decreased likelihood that behavior will be elicited again in the same context. I call this the “how” system and it mediates people (aka soft) skills learning. The third system is the emotional learning system in the brain. This system affects processing in both the cognitive and behavioral skills learning system and recruits the amygdala and other limbic structures. I call this the “feel” system. It can enhance cognitive skills learning by providing rich and social context and can leave the behavioral skills system poised for behavior change.
Integrating the Pathgather platform and team into the Degreed family leads to some immediate benefits for cognitive skills learning. The quantity and overall quality of learning content will increase providing more engaging content to learn from. The improved analytics and AI/ML solutions provided by the influx of Pathgather data will improve the accuracy and effectiveness of individualized learning paths.
The acquisition of Pathgather will also have powerful effects on emotional learning. This is a major strength of the social and collaborative aspects of the Pathgather platform that will add immediate value for Degreed. By introducing peer-to-peer engagement, game mechanics, and collaborative goal setting, emotional engagement will be high which will enhance processing in the cognitive skills learning system, and lead to more effective learning.
Behavioral skills learning will also be enhanced with this acquisition, although to a lesser degree. Enhanced engagement of the emotional learning systems in the brain will leave the learner poised for behavior change. The behavioral “nudges” will also be effective in providing the learner with some feedback on the effectiveness of their learning, although not using real-time interactivity.
In addition to the immediate learning science improvements to the offering, the promise for the future is high. Although Degreed and Pathgather were founded with a similar mission, they took distinct paths, and the combination of the two has the potential to change the narrative in the LEP market. It will be interesting, and fun to watch the evolution of Degreed over the coming years.
Where the LEP Market Continues to Struggle
Although LEPs are ideal for cognitive skills learning of information and facts, and platforms like Degreed are making inroads on the emotional learning side, all LEPs fall short at effectively training people (aka soft) skills. People skills are about behavior and are mediated by the behavioral skills learning system in the brain. They are about what we do, how we do it, and our intent. People skills learning is about linking environmental situations with appropriate behaviors. This system learns effective communication skills, both verbal and non-verbal, leadership skills in the form of showing guidance and respect in all interactions, and effective sales pitching.
LEPs are optimized for conveying knowledge and information, and sometimes for engaging emotional learning, but they do not incorporate true interactivity and real-time feedback that is required for people skills training. In addition, some of the methodologies that are engineered in LEPs, such as the emphasis on short bursts of targeted training of a single idea or concept, are ineffective at training behavior. Behavioral skills are best learned with longer training sessions and broad variability in scenarios.
To be clear this is a broad-based LEP market problem and not something specific to Degreed. However, to build an LEP that effectively trains hard skills, emotional skills and people skill, one must incorporate tools and technologies that maximally recruit each of these systems. As of today, LEPs focus on tools that recruit the cognitive skills learning system in the brain, some are beginning to incorporate tools that recruit emotional learning systems, but none utilize tools and technologies that maximally recruit the behavioral skills learning system in the brain.
The fact that some of the most egregious and headline grabbing problems in the corporate sector revolve around issues of behavior (#metoo, unconscious bias, discrimination), suggests that organizations looking for L&D vendors, and LEPs in particular, should demand a great emphasis on true behavior change. The work of thought leaders such as Jim Collins who identify world-class leaders with strong people skills who are humble, clear, and fair show the business value of people skills.
Fortunately, learning science provides clear guidance and best practices for solving this problem. This requires developing and building training tools that effectively engage the behavioral skills learning system instead of trying to train behavior using tools optimized for the cognitive skills learning system. This is suboptimal and generally ineffective.
With the acquisition of Pathgather, Degreed solidifies its place in the LEP market. From a learning science perspective, the acquisition leads to enhanced processing in all three learning systems in the brain. Perhaps the biggest improvement is in engagement of the emotional learning system. Peer-to-peer engagement, collaboration and game mechanics will have positive effects on learning. Cognitive skills learning will also be enhanced. The quality and quantity of content will be increased. This along with improved learning paths derived from the immediate influx of useful data will have positive effects on learning. Engagement of emotional learning systems in the brain, along with behavioral nudges will leave the learner poised for behavior change.
As a learning scientist, my best advice for Degreed is to tackle the behavioral skills training problem head on. No one in the LEP space has done this effectively, despite the fact that many headline-grabbing problems in the corporate sector revolve around issues of behavior (#metoo, unconscious bias, discrimination). The LEP platform that effectively addresses this issue, while simultaneously engaging the cognitive skills and emotional learning systems in the brain, will change the game and truly disrupt this growing sector.