Heads, Boards and the New (Old) Work of Leading Independent Schools
Note: This is an extended post--much longer than usual. It contains elements of an article I am working on and is posted here to gather feedback from readers. Please comment or send me e-mail. Thanks!
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Independent schools have long been encouraged to adhere to an institutional model of governance, where the board's primary role is to sustain the school via fundraising, ambassadorship and unqualified public support for the head. ISM captures this role nicely when it says that, "The Board’s job is to serve multiple and successive generations of students (not the current generation) by providing resources (approving appropriate budgets; support capital campaigns, and the like) that ensure a strong future for the school." A multitude of consultants and heads coach boards to govern "for their children's children," rather than the students who currently occupy the school.
This "long view" philosophy of governance is congruent with schools as mission-driven institutions; that is, as entities with missions and reasons for being that are transcendent of the employees and families who are current constituents. The dominant--perhaps only--voice that belongs in an institutional boardroom is that of the future, not the present. What is happening in school now is of little import for board discourse. Indeed, the here-and-now is at best a periodically necessary distraction (graduation and board visiting days might be exceptions) from the real work of strategy and financial sustainability.
The polar opposite of the institution governance philosophy above is perhaps best represented by the old-style parent cooperative, where everything, including governance, is for and about the parents of current students. Governors in a co-op model are representatives of parents tasked with acting explicitly on their behalf. The here-and-now is not only important, it really is the only thing that matters, because there is no school absent the willful consent of today's parents. In this model, schools are not so much institutions with lives unto themselves, but co-ops conjured into being only because of the participation of parents . [In the classic co-op, parent participation might include actual teaching and work in the school; in how I am using the term here, co-op merely means willingly enrolling a child and paying tuition.]
The co-operative philosophy of governance is consistent with schools as, in essence, market-driven businesses that must constantly take into account the preferences and needs of today's customer. What is happening in the school now is of paramount importance, because it affects not only the satisfaction of the parents but also the stability of the school's revenue stream. Unhappy parents create a proximate threat to survival, just like unhappy restaurant customers threaten its survival when they go someplace else for dinner. Board discourse under this model consists of much reprocessing of managerial decisions, especially when these decisions are the putative cause of customer (parent) agita.Of course, a great many schools fall somewhere in between the institutional-cooperative poles.
Given the choice, I suspect that most independent school heads would prefer to manage under the institutional governance frame than in a parent co-op. I also suspect that most independent school parents would prefer that their schools use more of the co-op governance model. The tension this creates is one reason why NAIS recommends that no more than 50% of independent school board members be the parents of current students. Current parents struggle to shift their focus to anything other than what just happened in school, precisely because they hear about it daily from their children and friend, and have intense emotional connections to many of the actors in whatever drama unfolds. And, since their willingness to continue paying the school keeps it in business, many parents believe it reasonable to want governance to respond to them, a belief parent trustees often find difficult to challenge.
My preference in the purity of scholarly abstraction is solidly and completely for schools to use the institutional model of governance, not one that in any way resembles a co-operative. We should leave that model to the public schools and the real co-ops, where it has proven to be unsuccessful both at fostering strong schools and at creating long-term sustainability. However, there is a trifecta of flies in this proverbial ointment and taken together they form a set of brutal facts that complicate things considerably.
First, many--perhaps most--independent schools are tuition-driven more than they are mission-driven; that is, for these schools, the mission is all well and good, but in the end what matters most is the willingness of a certain number of parents to enroll their children and pay tuition. No margin equals no mission, because school finances are essentially money in and money out with little in the way of cushion. Especially for small schools, enrollment shortfalls of only a handful of students can spell disaster in very short order. By contrast, institution-ness, say at an elite private university or a minority of independent schools, goes hand in hand with having resources to sustain the school in spite of what happens with tuition.
Second, a close analysis of data available from NAIS Stats Online reveals that most schools are seriously undercapitalized as businesses. The median NAIS-member K-12 co-educational day school carries $7.2 million in debt against a total endowment of $5.7 million (median). At today's depressed rates of return on conservative investments, such an endowment throws off not much more than the equivalent of 7 tuitions; nice, but not sufficient to carry a school through even a short downturn. Lacking much room to roll debt service into already high tuitions, schools are essentially dependent on philanthropy to fund capital replacement and new plant. Taken together, this means undercapitalization, notoriously the most common cause of small business failure in the US.
Third, the stark reality for many day schools is that there would be no board if its members weren't mostly (or all) current parents. We consultants can advise putting non-parents on the board all we want, but we see scores of committees of trustees struggle to find even one alumni parent, let alone someone from outside the immediate school community, to nominate for board service. Boarding schools and some larger day schools have been more successful at enticing non-parents (mostly alumni) onto boards, but smaller elementary schools seem especially prone to struggle.
It would be easy to counsel schools to go one way or another with governance--institutional or co-operative. But doing so would ignore brutal facts that are not likely to change much in the foreseeable future. In the same way that the existential threat of battle concentrates one's attention, so too does anything affecting the school's supply of money concentrate a board's focus on the here and now. Maybe a better, if inelegant, resolution is for both boards and heads to recognize that independent schools aspire to be mission-driven, but in many cases must in equal parts factor the market into decision-making. The both-and dialectic highlights, rather than dispels, the tension between mission and market, part of the new normal for independent schools.
Heads should recognize that sensitivity and responsiveness to customers is necessarily a priority; in fact, depending on the school's financial position, it may be Job One of their headship. My experience is that very few heads convey to their boards a sense that they take customer satisfaction, and the many factors that affect satisfaction, seriously. When board members believe that the head is relatively insensitive to the care and feeding of customers, it opens what they see as a gaping hole that they themselves must fill. Try persuading a board chair to get off the head's back about unhappy parents when enrollment has little margin for error and the chair sees customer satisfaction as crucial to day school sustainability. One inevitably resorts to cliched arguments about boundaries that seem totally out of touch with reality as lived by the board.
We think a propellant to board angst about parent satisfaction can be found lurking in the school's budget model. In the end, tuition-driven schools are all about putting the right number of students into the right number of seats. Boards that habitually budget at the high end of expected enrollment feel much more anxiety about keeping people happy than boards that allow a margin for enrollment variability. A 195-student, pre-K to Grade 6 elementary, for example, would better be served by a budget model set at 180 students than 195, even though 195 might be this year's level of enrollment. Heads should take the lead in building budgets at the low end of the typical year-to-year range in numbers.
No margin indeed means no mission, and heads at tuition-dependent schools should understand that no one, least of all them, has any fun when enrollment is less than expected. Urban and suburban independent schools operate in intensely competitive markets, and admission and its related departments, communication and marketing, are the stem cells from which schools manufacture new blood. Savvy heads work relentlessly to create "buzz" about their schools, leveraging every available tool at their disposal. Filling the pipeline with prospective students--across the grade levels, not just at traditional entry points--is a head's Job Two.
Boards should also abandon what I think of as an archaic and outmoded belief that students should ideally enter at the first available year (say, kindergarten) and exit at high school graduation. This belief, still unshakable for many board members, made sense in a day when parents took less of a consumeristic approach to buying education. Today's parents in competitive urban markets shop for their children's education constantly, scanning competitor web sites, attending open houses, and more or less continuously comparing notes with their friends and colleagues. The real test of economic viability today is not the number of "lifer's" in a school, but the total number of students in seats in each grade, accepting that many students will swap in and out of various schools over the years. Seen in this light, attrition, a frequent source of board concern, is less of a problem than the overall enrollment number.
Boards must accept that hyper-sensitivity to the market is paradoxically problematic in independent schools. Nordstrom, the department store chain, famously encourages employees to do whatever it takes to please the customer. Numerous business books on customer service contain stories of Nordstrom employees doing nearly impossible feats on their customer's behalf. Applying the Nordstrom approach to an independent school, however, yields diminishing returns when taken to an extreme. Some parents are impossible and a school would be better off without them (one smart board chair I know calls this "addition through subtraction").
At the same time, heads should accept that unhappy parents who depart may on net be addition through subtraction, but only if overall demand and the school's budget model can accommodate these events. Expecting a parent-populated board at a tuition driven school to happily accept the departure of very many of their peers is to go against human nature. Moreover, it becomes even harder for the board to tolerate unhappy customers when the source of the unhappiness is something everyone already knows. Heads correctly insist that parents not be allowed to pick their child's middle school math teacher from among the available options, but it severely strains the board's tolerance and rationality when everyone already knows that one of the teachers is notoriously weak and disorganized.
All of this means that heads have to have their eye on the ball; in other words, execution on all fronts is Job Three. The school must work. Voters rightly punish mayors of cities with pot-holed streets, spotty trash collection and rampant crime. Fix the fundamentals, build a budget with breathing room, do everything possible to create buzz and telegraph to your board how seriously you take customer satisfaction. Then, and only then, you can get around to lofty ideals like mission and vision.