An Interview with Rick Hess

KPR: Almost 30 years ago, with the release of A Nation At Risk, Ronald Reagan called for the business community to get involved in education, and the engagement that we've seen since that time has involved a lot of volunteers, a lot of financial support, but not a lot of real change that's resulted in improved outcomes. Can you offer your thoughts on how we could do this differently?

Hess: Generally, business gets involved in education out of a desire to do the right thing. When it comes to CTE, companies can be narrowly self-interested in the sense that part of their support can serve to identify and train future employees who are going to be in the workforce in six months or twelve months. But when we're talking about K-12 reform more generally, that's not the case. We're talking about improving life in the communities, and creating more livable environments. So to do that, businesses have turned to people who claim to be experts in education. And what they hear is that school systems need more resources or expertise or support. So they provide scholarship funds, they provide dollars, they provide software and hardware, and they allow their employees to go tutor two hours a month.

What all of this assumes is that these are relatively effective systems, which are getting the most they can out of their existing resources. And I think that assumption is fundamentally misguided.

School systems are not some unique kind of creature. They are systems engaged in teaching and learning, but they are systems that use business principles. It's just that the business principles they use are those that come out of scientific management in the first quarter of the twentieth century. Not surprisingly, any system that is built on a massive but relatively low-quality talent pool, which doesn't use technology to identify cost savings, which has an administrative structure that stifles creative thinking and creative problem-solving–not surprisingly, in those circumstances, simply putting in more resources or support, or more mentors, isn't going to amount to much.

What school systems need, what any anachronistic system needs, is to be reengineered in a way that takes advantage of available talent, that makes smart use of advances in tools and technology, and that builds a culture of excellence. But doing that in education, like in healthcare, requires conflict. Schools aren't organizations that can simply be shut down or replaced; they are public agencies, funded with public dollars, overseen by public officials, and only readily changed through the tools of public policy and advocacy.

So if business really wants to make a difference in school quality, it needs to be engaged in advocacy and in public policy, and in helping to reengineer these systems. And that means ignoring what the leaders of these systems say they need, and instead, working in ways to change these systems that are consistent with smart and well-run organizations in any sector.

How can I possibly be advising disregarding what they say they need? For the same reason I would say that listening to what Fannie Mae and Freddie Mac said they needed in 2006, or what AIG's management said they needed in 2007, is probably not the smart way to think about policy. What they think they need means what serves the interests of people who are used to the way things are and who have overseen the system the way it is. If we're trying to reengineer schools to be fundamentally more effective, we don't need them to change in ways that are comfortable for the people who currently lead them and staff them today; we need to reengineer them in ways that serve the interests of kids going forward, and that will necessarily be uncomfortable for the folks who lead and staff them today.

The leaders of education have not typically worked outside the field, they're not schooled in the habits of mind from outside the field, and what they see as feasible, and politically manageable, is shaped by their experiences within education.

KPR: Businesses operate by finding the right people and outsourcing responsibility to just handle something, and they tend to bring that mindset to their work in education. If you look at an organization like the Gates Foundation, for example, they keep hiring former superintendents to run their education reform efforts. What should businesses be doing to get reliable information on education, and an independent, and not a self-interested, perspective?

Hess: Businesses can start by just recognizing where the land mines are. There's a huge premium in education for the experts to go native. The way consultants get business is by having relationships with district and state officials. You don't generally cultivate relationships by being the skunk at the garden party. So there's a real premium for professors, consultants, and vendors to be in the business of talking up favored programs, of softshoeing any tough-minded changes, and of bringing that exact mindset to the table when brought in by business to advise or consult.

What you don't find in education are consultants or researchers who talk about how you get more effective schools with fewer employees. We've increased the number of teachers relative to the number of students by 50% since the early 70s. In the last decade we've been adding faculty at about twice the rate we've been adding students. So we hear today about the fiscal crises that these districts are in. Well, they're in those crises partly because while other organizations, like newspapers or the military for example, have been trying to drive productivity by using technology to displace workers doing routine tasks, and to get more value out of their best and most highly trained employees, what we've been doing in education is just adding more of everybody. The Title I dictum is "supplement, not supplant," but that's been more than federal policy: it's been a mindset. In schooling, we don't use technology so that we can remove teachers who are no longer necessary, or remove professional staff because we no longer need them. In schooling, what we do is buy a lot of technology, stick it in the backs of classrooms, use it sometimes, even while we keep trying to hire more people to staff our schools and our school districts.

So if business wants to come to the table and be transformative, they're going to have a really hard time finding people in K-12 who are comfortable thinking or talking in that way. What this might mean is that they might need to bring to the table a diff erent set of talent. They don't need to bring in the consulting firms that are already in the sector and that have already gone native; they need to bring in members of their teams, and folks who already know how to think about productivity and cost-effectiveness across multiple sectors, and bring those habits of mind to bear on the challenges of K-12.

KPR: You mentioned that one of business' primary motivations for getting involved in K-12 education is goodwill; there's that, and then there's workforce preparedness. Do you think one of the reasons businesses have not gotten more involved in K-12 education is that they're getting bad advice from the consultants that have gone native, or is it a fear of conflict resulting from the controversy that occurs when people try to shake up the system?

Hess: I think they're actually two faces of the same coin. I think absolutely that business is afraid of conflict--of unnecessary conflict at least. We know that when it comes to card check protection for instance, or when it comes to the tax code, or when it comes to free trade, we know that various business groups are very comfortable with conflict, and with throwing their weight around. But when it comes to education, reasonably enough, business just says, we just want to make the schools better. We don't want to alienate influential constituencies.
And sometimes business says, humbly--too humbly sometimes--just says that we're not the experts here. We want to be helpful; you guys just tell us what would be helpful.

And what business leaders aren't fully taking into account is that the way education leaders, including consultants and professors, think about what is good for schools, is through a "more/better" lens. Because they're not worried about profitability, because they're not worried about return on equity, because they live in an environment of public budgets, in which good decisions are partly those that minimize complaints from infl uential constituencies, including unions and neighborhoods. Decision-makers in education, and those they turn to for advice, don't think in terms of removing unnecessary personnel. They don't think in terms of zeroing out ineff ective programs. What they think about is in order to change things, we need more resources to do good work on top of the systems that are already in place.

Even break-the-mold superintendents, like Arne Duncan in Chicago, now Secretary of Education, was hailed as a shake-em-up kind of guy. He was actually lauded for his strong relationship with the Chicago Teachers Union. And he maintained that relationship because his kind of shake-em-up basically involved sprinkling new money on top of what was already in place. He introduced merit pay in Chicago not by overhauling the contract, but by launching pilot merit pay programs that stacked new dollars in two dozen schools on top of what was already in place. And that was two dozen schools out of about 500. He was hailed for his Renaissance 2010 school launching initiative; what that amounted to was an eff ort to launch around 100 charter and smaller schools between 2000 and 2010. One hundred schools over ten years amounted to maybe 20% of the schools in Chicago.

Even in Washington DC, Michelle Rhee, who really is a shake-em-up kind of leader, has been championing a radical new pay scale, but what folks don't always recognize is that her new pay scale not only holds everybody harmless, but it encompasses substantial pay raises even for those teachers who reject the opportunity to move to a performance-based scale. So the cutting edge of reform in education tends to start from the premise that we need to do everything that we're doing already, and spending all the money we're already spending, and then we need more money to implement pilot reforms on top of all that. This is a recipe for inertia.

KPR: Going back to the fundamentals of education, it seems that businesses tend to think more in terms of outcomes, and K-12 thinks more in terms of inputs and processes. Do we, as major constituencies all looking at education, all have the same goals for the system? Are we trying to achieve the same thing?

Hess: Not always, but more so today than 15 years ago. Fifteen years ago it was perfectly normal to see people debating publicly what the purpose of public schooling is. Is it primarily academic achievement, or is it a broader set of objectives? Today, that is a less common debate, for reasons good and bad. There's much more conviction that the first job of education is to help kids master course skills, particularly in reading and math. And because of No Child Left Behind, which has made these kind of data readily available, there's a default tendency to talk about school quality in terms of reading and math proficiency on grade 3-8 state assessments. Some people think that's all to the good; I think that's actually not all to the good. I think that schools serve important missions beyond just those two subjects, and in fact the American public thinks so. Gallup did a survey for Phi Delta Kappa a couple of years ago, and they asked parents whether they would rather have their child be an A student who is intensely focused on schooling, or a B, or even a C student, with a well-rounded set of interests. About three out of four respondents said that they would rather have the B or C student. So there are always these tensions about how should school quality be understood.

More broadly though, there is a fair amount of agreement today on the question of how school quality should be measured. From a business perspective though, an important thing to keep in mind is that business leaders typically don't focus on their stock price when they sit down and ask if this is a well-run firm. The stock price is a terrifically important piece of information for shareholders, for institutional investors, maybe for the board of directors. But if you're a CEO, and you want to sit down and ask whether this is a well-run company, is it one I'd want to take over, or is our organization wellrun, you don't look at the stock price, which is equivalent to end-of-the-year achievement scores. What you look at are all your operational metrics: What are your defect rates? Which of your units are highly productive? Is HR doing a good job of providing talented people? Are they responding rapidly to needs throughout the organization? What you want to look at are the metrics that tell you whether the people in your organization are doing a good job.

These kinds of metrics are achingly rare in education, and are frequently overlooked by people in a hurry to look at test scores. But the need to build this kind of respect for data, and the need to build these kinds of smart data dashboards, these balanced scorecard types of systems, and then to use them to manage schooling, is something that's been largely absent, but something where business has built enormous expertise in the last 30 or 40 years, and an area in which their guidance and support could be enormously powerful in the K-12 space.

KPR: In looking at business/education partnerships over the past few years, I have found very few cases in which businesses are working with districts collaboratively to look at real outcomes. The vast majority of these partnerships have been focused on providing resources, as we've talked about, or they've been working outside the walls of the K-12 system, either by hosting competitions, like Intel or Siemens, or bypassing the schools and working with legislators directly. If you go to some of the larger business functions on education, there aren't any education people in the room, so there's very little conversation taking place. Going forward, should we be talking to the legislators, or is there some level of receptiveness on the part of district leaders to talk directly? Do we have to do this to education, or with education?

Hess: I think part of it is something we have to do to education, as ugly as that sounds, and as unpopular as it is, for some of the reasons we've already talked about. The leaders of education have not typically worked outside the field, they're not schooled in the habits of mind from outside the field, and what they see as feasible, and politically manageable, is shaped by their experiences within education. If we want education to be fundamentally transformed, then support for some of the steps that need to be taken will have to come from outside education, and that calls for business leaders to be involved with policymakers.

That said, at a second level, a lot of the barriers to reinventing school systems and transforming school quality are cultural and knowledge-based. Eighty percent of superintendents start as classroom teachers, did their Ed.D. in education administration, became principals and wound up in the superintendent's office. And nowhere along that path did anybody teach them about balanced scorecards. Most have not had substantial exposure to management thinking that's not typically applied in the education sector. So the opportunity to sit down with open-minded school board members, state board members, or superintendents, and not try to help with curricula or pedagogy, and not ask what do you guys need, but to engage in collaborative efforts to improve district systems, in terms of management information systems, or IT, or procurement, or human resources, provides an enormously powerful opportunity for businesses to help transform the way school systems operate and the way schools do business.

KPR: One of the reasons that schools haven't gotten involved in substantive reform efforts over the past several years is that they haven't had to. The money kept going up every year. But now, with the economic situation what it is, is this an opening--an opportunity for businesses to get more of a complete hearing from the education folks?

Hess: Absolutely. One of the few silver linings of difficult economic times is that it provides both the opportunity and the impetus to make hard choices. Any organization, public or private--nobody likes to let people go. This is something that schools frequently misunderstand about the private sector. I've never met anybody at a public or private organization that likes to fire people. Nobody likes to have to take another look at existing pay scales. Nobody likes to look at operations and start zeroing out programs. However, one of the things that companies benefit from, whether they're publicly or privately held, is that someone is looking very hard at rate of return. And that creates some degree of ongoing pressure to make difficult choices. GE under Jack Welch--letting your bottom 10% go created a lot of pressure. Most companies aren't that aggressive. But there's always some attention to these issues.

In the public sector, it's really easy to just mosey along. What we've got is an opportunity that provides political cover for states and districts and schools to make hard choices. And it creates the impetus because in some cases you actually do have shortfalls. Now unfortunately, the way the stimulus package was designed, and the way it's been promoted, has played out as an excuse to minimize these kinds of tough decisions. But this crisis isn't going to be over in a year or two in terms of schools, because about a third of school revenues come from property taxes, and since property taxes are assessed on a rolling basis, K-12 schooling is going to be looking at an uncomfortable budget picture likely into 2013 and potentially beyond. So there's going to be plenty of opportunity in the next four or five years to justify difficult choices and what business can do is help educate the public as to why these are appropriate, help districts make sure they have the tools to make smart decisions, and provide the resources and expertise that can help states and districts to execute those decisions in smart ways.

KPR: One last question: if you're sitting down with a business leader, whether it's the head of a national company or somebody operating at a state or local level, what is your advice for their approach to making a real difference in public education?

Hess: There are two dominant schools of thought out there. One operates under the umbrella of capacity building, or best practices, and the idea is that we need to do a better job of researching what works, and putting resources behind it. If we can identify the right instructional programs, or build the right academic standards, or do better professional development, then we will have better schools. And I think what that mindset simply misses is that it's incredibly difficult to simply swap out the battery in a rusty jalopy and get the same results you would get if you put that same new battery into a well-designed new car. Districts have contracts, and protocols, and IT systems, and a whole slew or rules and routines that make it really difficult to transform the way they do business.

Folks who get that tend to make the opposite mistake: they say these districts are a mess, we need school choice. The problem is, school choice doesn't really do anything. We don't talk about telecom choice, or trucking choice, or airline choice or financial choice: we usually talk about deregulation. And as we've seen with financial deregulation, you can deregulate in ways that are smart or ways that are stupid. What matters is what kinds of incentives are in place, and what kinds of quality control, and how do you create conditions that spur excellence. Our school choice debate tends to ignore all these questions. So it's no surprise that while there are some terrific charter schools, it's hard to make an argument that the average charter school is much better than the average district school.

What business can do, since business lives in this world every day, is recognize that both of these are kinds of dead-end strategies. We don't need to just put more expertise and money into dysfunctional systems, and we don't just need to let people choose among some new schools. What we need is to build new systems of schools and to replace dysfunctional components of old systems, and to develop tool-builders, and to recruit and cultivate talent in a way that we create a dynamic environment in schooling that approaches the kind of environment we see in other high-performing knowledge-based sectors like biotech or software development. And that is really where business needs to say hey guys, we know some things about how we create these kinds of environments, but we don't know very much about education. So we need a leadership that marries business acumen with policy smarts with educational expertise to start creating that kind of green field where we can really start to build some scalable substantial ventures that are going to address these various challenges.

Frederick M. Hess is a resident scholar and the director of education policy at AEI.

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