Why MBAs won't save district schools
MBAs are taking on an increasingly visible role in traditional school districts around the country. Large districts are multi-billion dollar enterprises, the argument goes, and business-minded people bring critical skills for managing those organizations efficiently. Many passionate ed-reformer MBAs believe the b-school set can help combat the bureaucracy and mismanagement that hurt districts' effectiveness. As a fellow business school graduate, I'm not so sure.
My first, perhaps obvious, objection is that big organizations with distinctive professional cultures are incredibly hard to turn around. This is especially true if you're trying to effect change from the middle management and special-projects role where many new MBAs find themselves. Traditional school districts need major changes to their business models to be on financially sustainable ground and poised to deliver services in a coming era of increased parental choice and (I hope!) decoupled services. That's primarily a job for school boards and superintendents.
The problem with the "MBAs to the rescue" strategy is the conceit that business-school types are somehow inherently efficiency-minded.
The fundamental problem with the "MBAs to the rescue" strategy, however, is the conceit that business-school types are somehow inherently efficiency-minded. Ludwig von Mises pointed out that what he called "commercial-mindedness" comes from the incentives inherent in running a business--if you fail, it will fail, and with it will go your livelihood. It's a response to incentives, and it goes away if you join a government agency that will continue to exist, and pay you a salary, whether you succeed at your mission (teaching kids, in the case of school districts) or not.
The "commercial-minded" incentives of entrepreneurs are very much present in schools of choice, however, especially in jurisdictions where bad charter schools are closed regularly. The incentives of school leaders are more closely aligned with those of parents and students in the charter sector. Here MBAs and other entrepreneurs have a fighting chance of eschewing bureaucracy and sticking to best practices; mission trumps red tape in these organizations because red tape will eventually kill the business.
Last week, Neerav Kingsland, New Schools for New Orleans' chief strategy officer, floated a great idea for creating more such opportunities for education entrepreneurs. He suggested that superintendents of large districts become "Relinquishers," giving up the bottom 5% of their portfolios a year to the charter sector.
MBAs will no doubt continue to play valuable roles in traditional school districts. As even von Mises acknowledged, we do take away certain enterprise-control skills from our experiences in the private sector. We're good at managing large projects and getting buses running on time. But it's hard to believe MBAs-turned-bureaucrats will transform district schools from within. Instead, we should be laboring to strengthen charter schools, parochial schools, and other options outside the legacy K-12 sector to serve the needs of parents and kids.
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About the Editor
Bernard Lee Schwartz Policy Fellow
Chris Tessone was a Bernard Lee Schwartz Policy Fellow and the Director of Finance of the Thomas B. Fordham Institute. He has strong interests in governance and education finance, especially teacher compensation and school facilities finance.
May 16, 2013