Houghton Mifflin Announces Innovation Fund

In a press release today Houghton Mifflin Harcourt annouced the creation of a $100mm innovation fund which the company will use to "promote and enhance student achievement, individualized learning and effective technology integration in the classroom." Some other large publishing companies have well known innovation or investment funds so this is nothing revolutionary or new in the publishing business but represents an important strategic move for HMH.

The HMH Innovation Fund will promote and support solutions aimed at engaging all education stakeholder groups — including teachers, administrators, parents and students — by creating a process for soliciting, evaluating, developing and executing innovative ideas that solve teaching and learning challenges. The process will be uniquely collaborative, encouraging input and participation from across the education and technology industries. The Fund will also look to support new consumer applications including gaming platforms and other interactive solutions to engage students outside the classroom.

“The HMH Innovation Fund is a first for our industry, providing the capital to identify and incubate the next generation of innovation in education. We are excited about the opportunity to share in developing new solutions for teachers, students, administrators and parents,” said Barry O’Callaghan, CEO of Houghton Mifflin Harcourt. “HMH will work with, partner and fund the innovators of today and support great ideas that will have an immediate impact in promoting greater student achievement with tools that can be used both inside and outside the classroom.”

HMH has seen its fair share of problems over the past three years with a major restructuring of the company's balance sheet at the end of last year. The core operations of each business have reputedly been doing well even in the tough economic climate. This news, coupled with the news that the company is also investing $300million to develop innovation centers in the US and Ireland, will come as welcome news to those left bewildered by the company's recent financial problems.

The Innovation teams at HMH work closely with third parties including Original Equipment Manufacturers (OEMs), foundations and academia, and have already started rolling out an array of new solutions including:

• A one-year pilot program in four California school districts of the first ever full-curriculum Algebra application on the Apple iPad. More than 400 California eighth-grade students will receive instruction strictly via an iPad loaded with Holt Algebra 1 course materials including highly developed comprehension tracking tools, which provide students with customized online remediation based on quiz and test scores, and simultaneously provide teachers with student-specific performance feedback. Assessment data will be immediately available to the teacher for constant tracking and in-class remediation.
• A new all-digital language arts program in Texas for grades 2–12 called Texas Write Source, which helps students of every learning style master key writing forms and processes and grammar usage through whole-class interactive whiteboards, an online worktext and space that enables students to share personalized essays, and the ability to download video podcasts, audio-enabled interactive mini-lessons, games and trackable quizzes.

“We have a well-established and open incubation strategy for new ideas, partners and start ups that is different than anything that exists within the traditional publishing business,” said Fiona O’Carroll, Executive Vice President of New Ventures. “We have created an environment and a structure to foster and support incubation of new ideas and we feel we can be the partner of choice for big ideas due to our overall scale, market reach, positional advantage and speed in bringing things to market. This is a true incubation model.”