Leading Thoughts

Implementing Policies

I recently went to my bank's drive-thru teller to make a deposit.  He sent back my deposit because I had not listed all the checks on the deposit slip - I just totaled them.   I had an interchange about this where I wondered if this were a new policy, he assured me it was not and I commented that in many years of using the drive-thru I had never been asked to do this before.

This made me think about all the policies in schools that are on the books - so-to-speak - but are either not enforced or are enforced periodically.  There comes a time when the head, or the trustees or a dean of students might decide that things have gotten sloppy and that the policy needs to be enforced across the board.  This often happens at the start of a school year or new semester, when there is a change in leadership or when there has been an egregious violation.  What leaders need to remember is that stakeholders may have a variety of responses to this "new" policy.  As with anything that is perceived as a change, you will have push-back, complaints and joy. It is not enough to just say that this is our policy and always has been. People are not reacting to whether it is a policy so much as to whether it has been a serious policy and carefully and consistently implemented or whether it has been perceived as one of those things that can be circumvented or unevenly administered depending on who you are. Implementation may not be smooth just because of the variety of reactions.  Be ready for them.  If you really mean to implement this policy and keep at it, expect the reactions and factor them into your plans.

 

What is the right size for the independent education sector?

Seth Godin's blog today is an interesting comparison of two different ways of producing fried chicken eggs.  One is the industrialized way we all have come to know and the other is the more costly free range egg, cooked in olive oil and seasoned with a specialty salt.  The per unit cost difference is trivial in absolute terms (14 cents versus 39 cents), but huge in percent terms (more than double).

What a great analogy for independent education!  We use our low faculty/student ratios, massive array of programs, individualized instruction, and lots of extras to produce a qualitatively different experience at a much higher cost point than, say, our public or parochial rivals.  We are clearly the higher-priced egg.  But, just as there will always exist a larger market for the 14-cent egg, independent education will likely always be a minority player in the education marketplace.

Maybe the real question we should be talking about is how big a share independent education will attract averaged over a 25-year time horizon. When times are good, selling 39-cent eggs is no problem even though they are more than 2X the cost of the regular variety, a difference that in educating students translates into thousands of dollars.  If prolonged, good times can lead to excess production capacity for high-end eggs by giving the appearance of a perpetally larger demand than actually exists over time.  

So, is the problem how to serve more students with less cost, or how to serve fewer students but at a premium price point, or (more likely) which of these approaches best suits a given school in its context?

Changing How We Think about Business Models

If we were designing a commercial aircraft, we would hand the engineers a set of desired specifications, say, 10,500 miles range (London to Sydney, about half-way around the world), fuel use, passenger load, and ETOPS parameters (the maximum length of time en route for the aircraft to reach an alternate airport). After cooking the numbers, exploring materials for weight, durability and so forth, the engineers would tell us what is possible (or not) and at what price.  Then the finance people would construct spreadsheets to forecast at what load factor and at what fare the plane would need to fly in order to make money for an airline. 

No amount of "wouldn't it be nice" or "I wish we could" is a substitute for trying every possible combination of designs, materials, loads or whatever in order to figure out whether, given what we know and have available, the specifications are even remotely possible.  

Independent school boards of trustees face a similar challenge with setting tuition.  Almost everywhere we go we hear lots of "wouldn't it be nice if we could actually reduce tuition," or "I wish we could be more affordable for more people."  How about treating this as a design problem?  Let's set the specifications (say, US$10,000 tuition, faculty/student ratio of 11:1, and anything else that seems meaningful) and then put people to the task of figuring out if it can be done, given what we know and have available.

Of course, every aircraft, whether a Boeing or Airbus design, is a compromise.  The world's longest range commercial airplane only flies a bit under 9,000 miles.  Fuel comsumption is almost always higher than would be preferred.  And, as we all know, passenger comfort ends up being less than those of us who fly would like.  The school we would create using the above approach would be a compromise, too.  Tuition might be higher, enrollment larger (or smaller), ratios different, but at least the board would understand why decisions were made as they were and at what trade-off.  And, just possibly, we all might benefit by some breakthrough thinking about how to deliver mission in as resource-efficient a manner as possible.

The Risk of Lack of Clarity

Over the weekend Sarah Palin confused the world of politics by resigning as governor of Alaska.  While taking that action might have left confusion in its wake, what has made it more interesting but possibly worse for her is that her intent is so unclear.  Much has been made of her speech and pundits have parsed it to try to figure out what she really meant.  While fun for them, this is clearly something to be avoided in your communications.

The challenge with communicating to your stakeholders and to the wider community is that you know what you mean and you know the back-story that brought you here to this point. Your words have a specific intent.  What you cannot know is how those words are heard and interpreted by anyone else. Large schools with communications professionals carefully craft those messages and still sometimes wonder at how what seems so clear can become so muddy.  Small schools without the luxury of communications specialists are often at greater risk if they do not at least try out the message with someone who has not known the story before.  

In spite of all precautions, however, messages go awry. Especially those messages that have difficult news.  So, learning a lesson again - this time from Governor Palin - say exactly what you mean and no more.  Be clear about your intent.  What you don't know can be communicated as clearly as what you do.  Your words will be parsed, especially if they have to do with topics around change.  Keep communicating honestly and clearly and stay on message.  You may not get heard, you may be misunderstood by some, you may be misquoted by others.  However, if you are consistent and repetitive, most of your constituents will hear and grasp the essence of what you say and your honesty in saying it. 

Talking about money?

In industry, there is an inexorable path products follow from labor intensive R & D, to high cost initial production, to ever lower costs of production as the product becomes commoditized.  Lower production costs are usually associated with lower labor costs realized through either technological advances (increased mechanization leading to lower headcount) or moving to lower wage areas (off-shore outsourcing).  The model has been stunningly successful with clothing and consumer electronics, somewhat less so with automobiles, and as yet not workable in health care and education. [There have been a few experiments in “medical tourism” where U.S., E.U. or Japanese corporations send their employees to Thailand or India for non-emergency surgeries at fractions of cost.]

Health care has maintained itself as a locally-sourced, high-cost product largely because it is one of the few (maybe the only) area where new technology actually increases the cost of production.  Education has been relatively static—the technology we use doesn’t really change much about teaching and learning, and we still do school much as it was done in the 19th Century (a bit of hyperbole, but not that much).  

We in independent schools seem to be somewhat stuck with reaffirming what we have unless we can make a breakthrough on changing how we operate school. Everything else, increasing revenue and cost-control, falls into what Chris Argyris at Harvard calls “single loop” change.  “Double loop” change (deeper) would require doing business differently.  This would seem to be a topic for boards this fall: are there ways of doing school differently that if taken to scale, might dramatically alter the cost basis of our product?  From a generative perspective, the outcome might be to point toward an experiment or two that a school can run (one classroom or division) as pilots to gauge how things might work.

What is your board going to talk about in September?

Are You Being Served? Good Customer Service in the New Economy

Sounds like this has no relevance to working in schools or leading educational communities?  In reality, it has more to do with you and all of us in a "people" business than we might first think.  

Doing more with less is the new mantra, even for those schools who have enough and then some.  For those institutions who have had to cut programs or faculty or services that families had come to expect, your customers are going to be watching. As soon as they experience a drop in service they will begin to look around for another school.  This means that every person in your employ has to be focused on excellence and connection to the families you serve. 

A parent cannot come into the school without being greeted immediately - no matter how short-staffed the front office might be. You cannot have a parent waiting with no recognition while someone is on the phone; they will feel unwelcome and unimportant. Think about the all-too-frequent experiences we have had of approaching someone to provide service in a department store or a Home Depot or a local bookstore and they are on their cell phone or talking to a colleague or just lost in space.  Do you feel like you matter?  What about the times you have had to wander through a store looking for someone to take your money?  Do you feel valued?

Everyone in your institution is part of your ad campaign.  They ARE your service delivery team. They deserve support to be the best ambassadors they can be and recognition that it becomes more difficult when all of you are doing more with less.  It is not just what happens in the classroom that will keep your school full and your families happy.  It is every little detail that either says "We don't care if you shop here"  or "You are just the person we have been waiting for."

How are you doing?

The Huge Disconnect about Money in Education

To continue with the theme of using experience in higher education as instructive for independent schools, a June 29, 2009, blog entry in the Chronicle of Higher Education by Beckie Supiano stands out, not for its content so much as for the comments it engendered.  Supiano merely reports that the National Association of Independent Colleges and Universities finds the average private institution tuition increase for 2009-20 to be 4.3%, well below the 6%+ 10-year average (and also right in line with the 2.5-4.5% increases we have been seeing many of in independent schools). The comments, presumably left by college and university administrators, faculty and graduate students (not that many others read the Chronicle), expressed varying degrees of outrage at even the 4.3% number.

That those on the education inside seem so unaware of the drivers behind academic finance is one surprise.  Another is that despite horror over tuition increases, the faculty, one would assume, continue to want salary increases, as well as the full package of benefits that most schools provide--increases that must be paid for through some mechanism. What this seems to illustrate anew is the huge disconnect in our larger society between infrastructure and services and money. And it is this disconnect--the widely-held belief that airports, bridges and roads, along with universities, are good things that should be paid for by somebody else--that leads our customers (and sometimes our faculty) to assume that even historically modest tuition increases are excessive. We--along with our civil society--is behind the proverbial 8-ball until we find a way to fix this disconnect.

Does bubble economics extend to private education?

Independent school leaders would do well to pay attention to the chatter emerging in the higher education world about the future of universities and their business model.  One recent story in the Chronicle of Higher Education asks a provocative, "Will higher education be the next bubble to burst?", in its title.  The authors, Joseph Marr Cronin and Howard Horton, see parallels between the run-up in tuition prices across the past few decades, over-extended missions and budgets, and the large-scale hyper-expansion we witnessed in finance and real estate markets.

A second Chronicle piece, "U.S. May Need to Prune Number of Research Universities, Lobby Group Says," raises a specter not previously considered even remotely possible: that there are too many full-service research universities, and that a more sustainable level would require fewer, thereby forcing some to shift missions and priorities.  This chilling idea comes not from legislative or regulatory bodies, but from the president of the Association of American Universities (AAU), a group comprised largely of research university to advocate for higher education.

Is private education, elementary, secondary and higher, in a bubble?  If so, what are the implications for schools going forward?  Good questions for your fall board retreat.

How the New Normal Might Look

Fareed Zakaria, with his usual insight and erudition, assesses the state of Western capitalism in a Newsweek cover piece.  Zakaria's reasoned perspective stands as a counterpoint to catastrophizers on the left and right who, with considerable hyperbole, shed little light on either way has happened or what may lie ahead.  Too bad it is summer; the Zakaria piece should be required reading for every high school and university student, along with their teachers and school administrators.

Transparency

I have been thinking this morning about transparency.  Yesterday in the New York Times there was an article about Apple and its significant lack of transparency in an age when most tech companies blare about their products and when the demands of our business culture are for more transparency - at least of a sort.

Today as I was walking what used to be the new Main Street - one of our big and usually very crowded shopping malls - I noticed an interesting aspect of transparency.  The owner of this mall is in bankruptcy right now. While this certainly seems like a most successful and prosperous mall, even in the economic downturn, this is one of many owned by this company.  Like most other malls, I suspect, this one has had a number of stores close. Instead of putting up the ubiquitous temporary walls to cover the stores that are empty, the stores just sit there with their blank windows and storefronts.  I have a suspicion that this is a clear business decision - it costs money to put up those wall.  However, what is interesting to me is that it is a very transparent comment on the economy and its effects on this mall. Instead of disguising the loss, it is very clear. 

We have been saying for years that schools needed to be ahead of the curve on transparency - both financial and otherwise. Many schools now are making very hard decisions about how transparent they are going to be about the state of their finances or the difficult decisions they have had to make about next year - eliminating programs or extras or faculty or the language program in the early grades. What do you tell and to whom?  Why do you tell what you do?  Do you leave the store windows uncovered so that your stakeholders know the truth, or do you quickly put up the walls and post them with signs that say "Coming Soon!"?  Regardless of your decisions, they should be deliberate and consistent and respect your culture. How you deal with this is part of laying the groundwork for the near future.