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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