Introit

Supply Chain in Independent Schools

The Financial Times dedicated a section of the paper this past week (Jan 26, 2011) to the study of supply chain, in a special report called "The Connected Business."

"Supply chain" is certainly not a term that we use in the independent school world, yet we do have such a thing: it's called Admission. As I read through the lead article, "Supply chain is a strategic discipline," I couldn't help but consider how our admission offices serve as our supply chain managers, and how they are at the forefront of the "push to build sustainable and profitable businesses." In other words, they bring us students, whose families pay tuition. Without tuition revenue, our business model simply doesn't work. Strong schools have outstanding leadership in the Admission Office, and their professional development is as important as that for any faculty member.

With increasing competition from "free" (i.e., taxpayer-funded) public and charter schools, the Admission Office has never been more important. The admission cycle is really a year-round endeavor. Consider the importance of communication--the office is trying to reach more people than ever, and that includes the current parent body, which serves as a pipeline for new applicants. We all know how important word-of-mouth is. Just as it is important for supply chain managers to have relationships with people on the ground in all of the areas where a business sources product pieces, so too do we need to have relationships with multiple constituent groups. Social networking and electronic communications are nice, but we are in a people-centric business, and it's important to have face time with people. We need to show them that we know them and love them.

One of the things the Admission Office challenges us to do with regularity, as a supply chain manager should do, is to revisit our product offerings; in other words, our curriculum, from top to bottom. Those offerings are the "inventory" of independent schools: what do we have within our walls? What offerings make us so special? And it's not just about curriculum; it's about character development, extracurriculars...the value-added "stuff."

In this economy, consumer demand for quality is high, and our supply chain (the Admissions Office) needs to continue to build its network inorder to suit such high-demand customers. What are we all doing to assist in the building of our supply chain?

There is much at stake with our "supply chain," as article author Paul Taylor points out: "Today, supply chain competence has become a competitive weapon essential to success in launching products, entering markets, and responding to competitive threats."

Logging the Miles

In a recent interview with retired CEO of Xerox, Anne Mulcahy, Korn Ferry Institute's Gary Burnison centered on the topic of leadership. It should be remembered that Xerox was on the brink of bankruptcy during Mulcahy's earliest days at the helm, but she saved the company by focusing on two constituent groups: customers and employees.

Like Mulcahy, school leaders must "not only look over the horizon, but relentlessly execute today, for that determines the starting point for tomorrow" (6). That means that the leader must be connected to what matters the most, and it's what Mulcahy called "logging the miles." For her, that meant lots of travel, meeting with Xerox employees and customers...in person. It is a high-touch approach, but it does foster intimate communication and dialog with those groups closest to the marketplace.

Would school leaders looking to be "high-touch" focus on those same two groups (i.e., families and the faculty/staff), or would you envision different groups?

Lonely Leaders

The Financial Times ran an interesting story today (Jan 24, 2011) on CEOs: "Lonely CEOs flee hostile world for self-help group." Gillian Tett's usual insightful prose guides the reader through "what the point of Davos" really is. (Davos, Switzerland, is home to the annual World Economic Forum, a gathering of some 1,400 CEOs and other senior business executives.)

The remarks given by those interviewed remind me of what many school leaders say when asked what it's like to be at the helm of a school. It can be lonely.

John Studzinski, an investment banking leader, offers the following. "Being a CEO can be a lonely existence in terms of trusting ears and advice, so they [CEOs] come to Davos to meet and talk one on one. [...] It's a bit like Weight Watchers. A place where CEOs can get support." It is important for heads of school, also, to have a forum where they can share and listen, a place that is physically (and perhaps spiritually) removed from their normal locus of operations.

I wonder how many heads are able to avail themselves of such an opportunity on a regular basis?

Any feedback from those readers who are heads? Please reply via the "comments" feature.

 

Disrupting Flow

Steven Johnson, in his book, Where Good Ideas Come From, points out something rather obvious to those of us accustomed to how most independent school buildings are designed. Just substitute the word "classroom" for "office," and you want to say, "Yep. That's us."

"Because they are fixed physical structures, most offices [classrooms] have a natural tendency to disrupt liquid networks of information. They themselves are, quite literally, made out of solids, and they often map out the conceptual solid of a formal org chart, with its neatly defined departments and hierarchies" (63). In other words, the design of our more traditional classrooms (and offices, I would argue) ends up disrupting the potential flow, the concept proposed by psychologist Mihaly Csikszentmihalyi. "Flow" describes "the internal state of energized focus that characterizes the mind at its most productive" (64). We want our kids to engage in regular "flow," and we ourselves want to be a part of it, as well. We don't call it "flow," however; we tend to call it something like "academic engagement."

 Question: Do our classrooms/offices promote "flow", a sort of liquid network; or, rather, do they disrupt "flow"?

The Brain and Leadership

Briefings on Talent & Leadership carried an article on the biology of leadership, with a specific focus on the brain, in the Q4 issue last year. Given the discussions on brain-based education and research in independent schools, this article is valuable for its insights into organizational leadership and how we might be better aware of the role the brain plays, in a leader as well as in employees, managers, etc.

Author David Berreby proposes some "guideposts for leadership" that are helpful:

(1) "It's top-down and bottom-up." Bottom-up processes (i.e., sights, sounds, strong feelings) are important in how people within an organization behave, but so too are top-down processes (rational decision-making and conscious thoughts). "To reach people and motivate them, engage both their top-down thinking and their bottom-up intuitions.

(2) "Big challenges don't always need big solutions." One of the brain's biases is that big problems need big reponses. Not true, as Berreby says, "remember that everything you experience has multiple meanings, because the same object is treated differently in different parts of the brain." Instead of making that big change, you might consider "slight adjustments to detail that matter at other levels of meaning. These are easier and quicker. Often, they're all it takes." Berrby cites the example of "opt-in" versus "opt-out" programs. If you institute an opt-out regime, where people have to consciously choose to refuse something, they will do the action in question (most of the time). Why? Simple: people are averse to change, and paperwork (opting out) is yet another task that seems burdensome.

(3) "Awareness of the biology helps control the biology." The weather is cited as an example of an influence over an interview, etc; folks who interview on cloudy and rainy days tend to have poor interview experiences, as opposed to those who interview on sunny days. We need to plan for the possibility that our judgment may be clouded (no pun intended) on such days; we need to identify a way to correct the rain effect (or similar).

(4) "Make the story coherent on many levels." We know that all brain functions are inter-connected; they depend on one another; they do not work in isolation. Knowing that, "the best way to engage the multi-leveled brain is to tell a story [to others: employees, mid-level managers, etc.] that works at many levels. The more parts [...] you can speak to, the more effective the message."

Check out David Berreby's blog, Mind Matters.

Why Top Students Don't Want to Teach

An article from the December 2010 issue of the McKinsey Quarterly. It's worth reading, not because it proposes something new that we don't know about, but rather because it underscores something we do know...and which continues to be relevant to our hiring efforts: affordability of being a teacher. In other words, top college graduates are eschewing teaching because they don't see it as a viable option for supporting a family. I might argue, though, that they haven't considered the merits of working for a boarding school (most notably the housing benefit); some day schools still offer housing as well. That (housing) tends to be a significant factor, when it comes to disposable income. Of course, when college grads see friends or acquaintances entering other fields and pulling down six figures, that makes it difficult to consider teaching as well. That's always been the case, but one wonders whether a potentially inflationary environment over the next few years will exacerbate that issue.

Chart Focus Newsletter  December 2010 Share Why top students don’t want to teach Efforts to help US schools become more effective generally focus on improving the skills of current teachers or keeping the best and ejecting the least effective ones. The issue of who should actually become teachers has received comparatively little attention. Yet the world’s top-performing systems—in Finland, Singapore, and South Korea—recruit 100 percent of their teaching corps from students in the top third of their classes. A McKinsey survey of nearly 1,500 top-third US college students confirms that a major effort would be needed to attract them to teaching. Among top-third students not planning to enter the profession, for example, only 33 percent believe that they would be able to support a family if they did. The stakes are high: recent McKinsey research found that an ongoing achievement gap between US students and those in academically top-performing countries imposes the economic equivalent of a permanent national recession. To learn more, read “Attracting and retaining top talent in US teaching” (September 2010).

 

The Head's Last 100 Days

Admittedly, the title was meant to grab your attention. It finds its genesis in a recent article, "Making the Most of the CEO's Last 100 Days", which was featured in the McKinsey Quarterly, the business journal of McKinsey & Company.

Although I would re-arrange the title to read something more like, "The Head's Last Year", the premise shared between the two (i.e. an outgoing CEO and an outgoing Head of School) is the same: what makes for a successful transition to a new CEO or a new Head of School?

Following are some key questions for that individual, all of which are great questions for heads, who may be operating on a three-year contract model - or similar:

1. Would I undertake any major strategic or organizational shifts if I had three more years ahead of me?

2. Which people decisions would I make now, if I had to stay for three more years?

3. Does the school have sufficient operational momentum to deliver strong results this year and next?

4. What do I wish I had understood better when I started in the job?

5. What's my plan for the last year?

Gaudeamus igitur?

Gaudeamus igitur. Latin for "let us rejoice, therefore."

The gut-wrenching economic scenarios we've seen played out on the world stage since 2008 have brought about any number of editorials, television appearances, blog posts, books, (insert other media here) that underscored the need for fiscal responsibility and concrete plans for the financial sustainability of all institutions.

For schools, financial sustainability means a plan that allows for all expenses to be paid by means of revenue from tuition, fees, investment income, and philanthropy. If those four factors do not provide consistent, forecastable, adequate revenue for a school, then that school is not financially sustainable. In other words, admission and enrollment cannot be forecast with any reliable accuracy, which means that tuition and fees cannot be forecast with any reliable accuracy, which means that annual budget construction is nauseating and painful, with reductions in personnel and/or programs occurring every year.

In the face of such uncertainities, then, it seems remarkable that schools that are struggling to remain financially viable/sustainable--which, by the way, tend to be schools with heavy debt loads--are finding success in renegotiating the terms of their debt with banks.

The argument of the pragmatist might be that the continued operation of the school is in the bank's best interest because the bank doesn't want to own a school building. That can be a piece of real estate that is difficult to sell. So, the bank agrees to refinance the school's debt. The refinancing scheme is the thing that is actually in the bank's best "interest," since it will earn more interest on a longer amortization period. A school that owed $10 million at 7% over 20 years (total repayment = $18.6 million) now refinances that same amount at 4% over 40 years, making for a total repayment of $20.1 million.

Top Advantage: significant decrease in cash flow needed to meet debt repayment

Top Disadvantage: the school is locked into debt repayment for almost half a century.

Is that responsible? Is that sustainable?

There are other disadvantages, to be sure, and some superficial advantages, but there remains the underlying issue of a school's ability to enroll and retain students, ensuring tuition payments. If a school has been unable to forecast admission and enrollment reliably, why should a bank engage in the arduous process of refinancing a school's debt, when the refinance mechanism itself is predicated on a school's ability to repay the debt via its operational budget...yet the school cannot forecast reliably, for whatever reasons?

Yet the stories are out there of schools that have successfully obtained longer amortization periods, when it is clear from their plummeting enrollments that the market is sending a message regarding the viability of those schools. Not only longer amortization periods, but sometimes lines of credit are added onto existing debt loads, with the line of credit being used to pay for the ongoing, usual expenses of the school such as payroll, vendor payments, and the like. In other words, some schools are given lines of credit in order to meet their normal monthly bills because their annual budget has failed.

Failure, then, is being rewarded with positive reinforcement. It is being promulgated and encouraged. All in the name of meeting "financial sustainability" through the ruse of cash flow.

Such an approach to "financial sustainability" is dangerous. It will culminate in further economic malaise in the credit markets, when it becomes apparent that such schools, even with renegotiated debt terms, will be unable to meet the new terms, as their enrollment of full-paying students continues to decline.

Philosophically, should we (independent school folks) be happy about all of this, as (apparently) are the boards of these schools that have "increased" their cash flow?

Gaudeamus igitur? For real?

International Baccaulaueate Launches IBtv

The International Baccalaureate Organization has added a fun new video section to their blog called IBtv.

via www.admissionsquest.com

From the Boarding School Blog at Admissions Quest, here is a very interesting development in the world of IB. I have taught IB diploma program courses in French, and I absolutely loved it.

Paradigm for Professional Development

In thinking about professional development lately, and dovetailing with Mark Crotty's thoughtful post yesterday, I'd like to offer the following visual paradigm for professional development. Its construction is meant to facilitate application in most independent schools.

I would very much welcome feedback from readers, including suggestions for emendations, about its potential as a useful paradigm.

  Download Professional Development Paradigm