Good to Great: Eight Steps for Strategic School Design

1. Good to Great: The New Strategic Process - Eight Steps of Strategy and Design for Schools Patrick F. Bassett, President NAIS (www.nais.org)

2. De-motivating Concepts: www.despair.com • Intelligence: Artificial Intelligence Is No Match For Natural Stupidity • Apathy: If we don’t take care of the customers — maybe they’ll stop bugging us.. • Mediocrity: It takes a lot less time— and most people won’t notice the difference until it’s too late

3. De-motivating Concepts Paths to ruin for school leaders: • alcohol the most painful; • sexual indiscretion the most dangerous; • strategic planning the most certain. (Dick Chait at NAIS’ LtP conference, quoting a university president, 2004)

4. The Purposes of Strategic Thinking:The Big Three Motivators 1. To know, really, how well we’re doing now…. • “The plural of anecdote is…. data.” ~George Stigler • “In God We Trust…. All others: Bring data.” ~Secretary of Ed Spellings 2. To contribute to an ongoing & flexible strategic “vision” & “road map" (rather than a fixed and rigid “plan”) • “If you want to give God a laugh, tell Him your future plans” (German Proverb) 3. To move the organization from Good to Great(Jim Collins “prequel” to Built To Last) • “Good is the enemy of great.” • PFB: More than “making a difference”: “leaving a legacy”

5. Eight Steps of Strategy and Design • Setting a Framework:Strategic Plan (Essentialist) vs. Strategic Vision & Roadmap (Existential)? Scope and scale. 12-month time-frame. • Planning to Plan: Populating the Team; Undertaking the Research & Reporting Out; Organizing the Retreat; Testing the Scenario(s). Assessing the Internal Leadership Capacity & Inspiring the Board: Good to Great. The World Is Flat. A Whole New Mind. Wikinomics. • Assessing the External Factors: Environmental Scanning. (NAIS Demographics Center; NAIS Opinion Leaders Survey: Forecasting Independent School Education to 2025). What are the “inevitable surprises” to address?

6. Eight Steps of Strategy and Design • Evaluating your School's Current Position: Experiment with various tools: “SWOT” (strengths, weaknesses, opportunities, threats); “Portfolio Analysis” (via "value proposition surveying"); “Game Theory” (a la economist Joseph Schumpeter); “Customers' Customers Analysis”; Balanced Scorecard (HBR, Kaplan & Norton); NAIS's Six Steps to a Financially Sustainable School. • Identifying the Key Issues: Issue identification ("What are our issues?"); sorting ("How important?"); evaluation ("What if we ignore it?"), relationship to mission "Why do we care about this?"). What are our three most insoluble problems? Brutal facts? • Reviewing your Values & Mission: The Essentialist vs. The Existential approach to mission and values. Mission (the present, the why we exist); and Values (the past and always, the what we believe; the anchoring, resonating "essential & enduring tenets" for organizations "built to last": e.g., NAIS's 4 I's.) What are our unshakeable beliefs?

7. Eight Steps of Strategy and Design • Creating Your Vision for the Future: Vision (the future; the what we shall become). "Vision-casting" to visualize the desired and preferred future: "Whom will we serve?" "What skills and values will they need?" "What do our customers want? Need?" "What should we be known for in the future that we're not known for now?" Scenario-writing and testing. NAIS’s vision. • Determining Goals, Strategies, and Initiatives: From goals (the outcomes that are “SMART” - i.e., specific; measurable; achievable; relevant; timely), form strategies (action-oriented approaches, the how) and initiatives (tactical undertakings at the departmental levels, the what and when). Backward design the grid of tasks, timetables, point people. Communicate the vision, “road-map,” and strategic priorities.

8. How To Frame School Planning Annual Summer Strategic Assessment Retreat • Each summer the Strategy & Design Team (board, admin, and opinion-leaders from faculty and parents) does a gut-check on vision and mission, assesses success of last 12-months’ goals and relevancy of next 24- and 36-month strategies and priorities) and deposits longer-term ideas into the parking lot). • Strategy Team exercises their right-brain creativity via “big questions” as it rolls forward the five-year vision.

9. The End(See Related Slides in Appendix)

10. Assess Operational Strength via Collins’ Six Criteria Organizational Culture: Good to Great • Level 5 Leadership • Investing in leaders? • First Who, then What • Who’s on the bus? • The Brutal Facts vs. Unshakeable Beliefs • Unsustainable financial model? Changing school-age demographics? Talent pool for faculty diminishing?

11. Organizational Culture: Good to Great • The Hedgehog Concept • What do you do best? Rigorous academics in a value-laden context? • For the social sectors, “greatness” not profit is the answer: how to define success is the question. • Culture of Discipline • What to subtract when we want to add? • Technology as Accelerator • Customized IEPs and team learning? G2G Detail

12. The Balanced Scorecard: Metrics for Greatness Robert Kaplan and David Norton (HBR 1992) rubric of a “balanced scorecard” to assess current program and operations: • Customer Satisfaction (cf. value proposition surveying ~ The NAIS Survey Center): What’s highly valued & leveragable? • Staff Learning/Innovation (cf. The NAIS Demographics Center; Ideas@Work; 101 Ways To Go Global and Green) • Business Processes/Efficiencies (cf.Dashboard Indicators comparisons via StatsOnline; NAIS’s 10 “data proxies for excellence,” the “markers of success”) • Financials: The Stats Online Financial Calculator

13. Strategic planning Combines two fundamentally different ways of thinking into a single process (NB. Ike on D-Day.) Needs stability/predictability Driven by calendars and events Does not produce actual strategy, only plans Strategy making Leverages variety and divergent thinking in the name of creating value Thrives on instability and uncertainty Continuous cycle of learning Pushes for simplicity, clarity and focus Making the Shift in Thinking(cf. Jeff DeCagna, Principled Innovation “Strategic Planning is… an Oxymoron” ~Henry Mintzberg, The Rise and Fall of Strategic Planning

14. Strategic planning Executes plan by publishing document & implementation schedule wedded to 3 – 5 year cycle. Fixed and inflexible goals sometimes fail to reflect changing conditions and priorities. Strategy making Executes “road map” (vision of destination and proposed routes) at a summer leadership retreat (board, admin with invited faculty and parent leaders) by developing five or so 12-month priorities, posted on the website. Notes 24-month and 36-month goals, but places them in a planning parking lot for successive R&D consideration. Making the Shift in Thinking(cf. Jeff DeCagna, Principled Innovation

15. Built To Last & Good to Great Companies • James C. Collins and Jerry I. Porras, Built To Last, Harper Collins, 1004. Corporations cited who historically have outperformed all others by a wide margin include 3M, American Express, Boeing, Citicorp, Ford, GE, Hewlett-Packard, IBM, Johnson & Johnson, Marriott, Merck, Motorola, Nordstrom’s, Proctor & Gamble, Phillip Morris, Sony, Wal-Mart, and Walt Disney Corporation. • Jim Collins, Good to Great, Harper Collins, 2001. Corporations cited who moved from “good” to “great” include Abbott, Circuit City, Fannie Mae, Gillette, Kimberly-Clark, Kroger, Nucor, Phillip Morris, Pitney-Bowes, Walgreen’s, and Wells Fargo. Return

16. “Inevitable Surprises” for Schools(cf Inevitable Surprises, Peter Schwartz) • In many locales, a critical mass of Hispanic & Latino/a students is emerging as varying fertility rates and immigration patterns define the school-age population. For private and public schools, demography is destiny. Strategy: Customized marketing to the Hispanic families. • The long boom economically is possible and perhaps probable for the US. But for now, we may be looking a “long bust.” • The “end of retirement” is likely for future generations. It’s already here for many boomers (cf. Marc Freedman’s Encore), an opportunity to hire experienced talent, part-time.

17. “Inevitable Surprises” for Schools(cf Inevitable Surprises, Peter Schwartz) • New models of public and private schools, especially lower cost ones, will proliferate. Schools the middle class can afford. • Rising faculty salaries will be required in the public and private sectors to hire the best & brightest. (Cf: Denver public school starting salary of $42,500 announced for 2009). • High stakes testing will fail, without the anticipated and hoped for effect. Meanwhile smart schools are adopting adaptive and value-added testing: e.g., MAP (Measurement of Academic Progress) & CWRA (College & Work Readiness Assessment)

18. “Inevitable Surprises” for Schools(cf Inevitable Surprises, Peter Schwartz) • Customized learning in high-tech & high touch schools will become the standard for teaching and learning. Distance learning models increasingly successful at Stanford U, Apex, K-12.com, Virtual High School. (See Clayton Christensen’s Disrupting Class & Tim Fish’s “Teaching in a 2.0 World” in Independent School, Winter, 2009)

19. KnowledgeWorks Foundation 2020 Forecast (01.06.09) • Hands-on creativity emerges via lightweight fabrication equipment, such as 3-D printers, that will become inexpensive, ubiquitous, and integrated into schools so students can create new things easily and give life to their ideas: Daniel Pink’s Whole New Mind right-brained “design” imperative realized. • Social networks actualize a Wikinomics open source future allowing artists and tinkerers to share ideas and improve upon ideas. Social networking communications skillswill make students creators of knowledge, not just consumers. School 2.0 experiments multiply. • Abundant opportunities to reinvent learning and teaching take hold in light of the economy of the future. Hands-on, authentic learning promises “to enable students to make meaning out of previously boring and abstract lessons.” Project-based learning takes off. Return

20. Brutal Facts for Independent Schools • Competition is increasing dramatically for students and teachers: better public schools, more magnet, and charter, and for-profit schools; growing home schooling, lower-cost private “chain” schools for the middle class, etc. NAIS data point: While inquires have dropped 20% over the last seven years, applications, acceptances, and enrollments ratios have been stable (averaging 3 applications and 1.5 acceptances to each enrollment). • Public opinion is mixed about the value of independent schools. NAIS data point: NAIS 2008 marketing study indicates the majority of parents over $200K family income believe their public schools to be better than independent schools.

21. Brutal Facts for Independent Schools • Our financial model is stressed, becoming less rather than more sustainable. NAIS data point: The ratio of students:teachers over the last 7 years went from 11.7:1 to 8.6:1, over 25% less “efficient.” The student:total staff ratio also declined from 7.8 to 5.2 (1/3rd less efficient). • We’re becoming less and less affordable. While more staff means richer programming and more individualized guidance and attention, it also means higher prices. NAIS data point: Tuition up on average 30% beyond inflation in the last seven years. • The “price-break point” arrived this year in some markets, suggesting that tuition isn’t “inelastic” after all. Continuing unchecked rising costs may alienate current and future customers, make us less affordable and attractive to most of the marketplace and diminish our socio-economic diversity. NAIS data point: Despite tremors, no earthquakes yet. SSAT testing and SSS financial aid applications tracking with past year.

22. Brutal Facts for Independent Schools • Parents are becoming even more consumer-oriented and difficult to manage. The “disruptive 5%” of parents have and employ new digital tools and networks to wreak havoc. • Standard & Poor’s outlook for private schools is bearish, citing troubling trends of lower liquidity levels and weaker investment performance, concerns related to economic dislocation, including access to student loans, schools' access to capital markets, and parental affordability. (“Unprecedented Times And Uncertainties Test U.S. Private Primary And Secondary Schools,” 01.12.09) • Resistant school cultures, “high anxiety” among faculty and staff, and underperformance of boards make it difficult to innovate and lead to entropy related to re-engineering program and operations to create 21st C. schools. Return

23. Unshakeable Beliefs for Independent Schools • Because of our freedom from government and church control and financing, independent schools have more capacity than other systems to adapt to economic crises. NAIS data point: In the last six recessions, average enrollment stayed stable as schools spiked financial aid. • Our constituents value our schools and contribute generously to annual giving: NAIS data point: Average annual giving per student has increased 44% adjusted for inflation over the last seven years.

24. Unshakeable Beliefs for Independent Schools • Consumer discretionary spending on education goes up in recessions. Stressed families give up many discretionary purchases, but do everything in their power not to give up the best school for their children. NAIS data point: Surprising countertrend of increased literacy (i.e., reading literature) in all age groups, especially 18-24 year olds, reported by the National Endowment for the Arts (see Herman Trend Alert, 1/21/09) augurs well for valuing independent schools. • Independent schools have the resources and freedom to innovate in the development and delivery of curriculum and to share that innovation for the betterment of the larger education community, a public purpose that will attract talented Millennials. NAIS data point: High satisfaction levels among faculties give independent schools a huge market advantage to attract talent.*

25. Unshakeable Beliefs for Independent Schools • The significant independent school commitment to socio-economic diversity pays strategic dividends. Generous financial aid can grow as schools realize that enrollment should be the fixed variable in planning and aid the flexible variable via net tuition discounting. NAIS data point:In the last seven years the percentage of students receiving support (financial aid and tuition remission) has grown from 20.6 % to 23.7% of the student body. • Leadership rises to the occasion during crises. Our school leaders and trustees and admissions and advancement officers are professionals who have the potential to leverage the crisis to create more sustainable schools for the future.

26. Unshakeable Beliefs for Independent Schools • We’ll use the adversity we’re facing (cf. Malcolm Gladwell’s “The Uses of Adversity”) now by three “value-related” means: • Reinforcing the value proposition: No one does PS-12 education better than independent schools. • Re-engineering the financials toward a more efficient and sustainable model that pays more attention to affordability in the interest of becoming not the price-leader but the value-leader. • Remembering that “values are the value-added” of an independent school education. Return

27. Eight Strategic Priorities for Schools • Affordability & Accessibility: Given that financing affordable schools that are accessible and diverse is an overarching challenge and that trends indicate continuing pressure on raising tuitions...independent schools should.... • Recruiting, Retaining, Rewarding Talent: Given the demographics of an aging workforce near retirement, a generation in college now not attuned to teaching as a career, and concerns about recruitment, retention and competitive compensation of high quality faculty… independent schools should....

28. Eight Strategic Priorities for Schools • Advocacy & Marketing: Telling the Independent School Story: Given the increase of potential competition for the next generation of students, an increase that will require greater advocacy and marketing on behalf of independent schools… independent schools should.... • Communications: Given the increasingly demanding nature of parents… independent schools should....

29. Eight Strategic Priorities for Schools • Governance: Given the higher level of partnership and vision required of boards and school leadership… independent schools should.... • Accountability: Given the increased likelihood of media and governmental scrutiny, intrusion, and demands for public accountability… independent schools should....

30. Eight Strategic Priorities for Schools • Innovation & Change: Given the public’s identification between quality and innovation, its perception of independent schools as traditional rather than innovative, and the resistance to change found within independent schools… independent schools should.... • The High Tech and Global Future: Given the imperative for schools to create a 21st C. curriculum so that students are prepared for a more technological and global future… independent schools should....

31. Ice-Breakers for Generative Conversations and Strategy-MakingSource:  Governance as Leadership (Chait, Ryan, Taylor) • What do you hope will be most strikingly about this organization in five years? • On what list, which you could create, would you like to see this organization rank at the top? • What will be most different about the board and how we govern in five years? • How would be respond if a donor offered a $50 million endowment to the one organization in our field that had the best idea for becoming a more valuable public asset?

32. Ice-Breakers for Generative Conversations and Strategy-MakingSource:  Governance as Leadership (Chait, Ryan, Taylor) • If we could successfully take over another organization, which one would we choose and why? • What has a competitor done successfully that we would not choose to do as a matter of principle? • What is the biggest gap between what the organization claims it is and what it actually is? • What will be skills and values the 21st. C. will demand and reward?

33. Technology as Accelerator (cf. Collin’s Good to Great) *Adapted from ISTL #61, Feb 2005, William E. DeLamater

36. G2G Principle #1: Level Five Leadership • Personal Humility + Professional Will • sublimated egos, focused will: more like Lincoln & Socrates than Patton or Caesar. The organization’s success is what drives the leader. • Asks good questions • Ambitious for the school and its people • Shares Credit---Takes Responsibility • Passes the Power—Diffused Decision Making (NB. NAIS’s Z- model of decision-making; The Wisdom of the Crowd: \the Pentagon’s electronic brainstorming; “dotmocracy” exercise for brainstorming)

37. G2G Principle #1: Level Five Leadership • Social Sectors Variation: • “Social sector leaders are not less decisive than business leaders as a general rule; they only appear that way to those who fail to grasp the complex governance and diffuse power structures common to the social structure.“ • “True leadership exists only if people follow when they have the freedom not to.”

38. G2G Principle #2: First Who…Then What • Who’s on The Bus? • Getting the right people on the bus, the wrong people off the bus and the right people in the right seats on the bus. • Recruit…Train…Retain • Knowing that the only brake on moving forward would be the inability to attract and keep talent • Everyone grows.

39. G2G Principle #2: First Who…Then What • Social Sectors Variation: • In the social sectors, getting the wrong people off the bus more difficult • Early assessment mechanisms more important than hiring mechanisms, since no hiring process is flawless, and you really only know how effective someone is when you start working

40. G2G Principle #3: The Brutal Facts • Honest Assessment—Unwavering Faith • Culture of openness that invites critiques from all: frequent and healthy debate. • The Stockdale Paradox—having the faith that you will prevail but disciplining yourself to face the brutish facts of current realities • Debrief Success AND Failure • End each meeting with, “Where did we succeed…and where did we fail?” • Typical school brutal facts?Unshakeable beliefs?

41. G2G Principle #4: Hedgehog Concept • Truly great companies have a simple core concept that drives everything: • What can they be the best in the world at? • What drives our economic engine (and what could accelerate that)? • What are we deeply passionate about? (Need all three to be great.)

42. WHAT YOU ARE DEEPLY PASSIONATE ABOUT Hedgehog Zone WHAT DRIVES YOUR ECONOMIC ENGINE WHAT YOU CAN BE THE BEST IN THE WORLD AT

43. G2G Principle #4: Hedgehog Concept • Social Sectors Variation: • Must rethink the hedgehog concept without the profit motive: i.e., challenge is to define and achieve “greatness” not “profit.” • Flywheel concept in social sector case: Building momentum by building “brand” (i.e., deep will of emotional goodwill and mind-share of supporters and potential supporters). • In for-profits, money is both an input and output: in non-profits, it’s only an input. Mission achievement is the output, defining metrics by proxies for greatness (e.g., Cleveland symphony). • “In the social sectors, performance is measured by the results and efficiency in delivery of the social mission.”

44. G2G Principle #5: Culture of Discipline • Disciplined People, Thought, Action • Environment of freedom circumscribed by a culture of discipline. • With disciplined people, you don’t need much hierarchy or bureaucracy (since self-disciplined people don’t need to be managed). • With disciplined action, you don’t need many controls. • Combining a culture of discipline with a spirit of entrepreneurship creates success. • Discipline is as much about saying “No” to temptations that are not one’s core business as it is about saying “Yes.”

45. G2G Principle #5: Culture of Discipline • Social Sectors Variation: • “Greatness is not a function of circumstance; greatness, it turns out, is largely a matter of conscious choice, and discipline.”

46. G2G Principle #6: Technology Accelerators • Never use technology to introduce a transformation but rather to accelerate it. Technology is not the core concept but can drive it. • Baumol’s Disease: Schools “less efficient not more” because of technology. • With some notable exceptions, most schools not yet using technology to “accelerate” core business.

47. NAIS Environmental Scanning: Forecasting Independent School Trends to 20015 NAIS Vision: Creating Sustainable Schools for the 21st C. • Demographic Sustainability (becoming more inclusive and representative of the population--student and faculty-- and less unapproachable financially and socially) • Environmental Sustainability (becoming more "green" and less wasteful) • Global Sustainability (becoming more internationally networked and less parochial in outlook) • Programmatic Sustainability (becoming more attuned to developing the skills and values that the 21st Century marketplace will seek and reward and less constrained by the traditional disciplines approach to teaching and learning) • Financial Sustainability (becoming more affordable and less inefficient and costly)

50. NAIS Independent School Faculty Survey, 2008