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 / Summer 2006 / Issue 43(originally published by Booz & Company)


William G. Ouchi: The Thought Leader Interview

I had spent 35 years studying the management of very large companies, and one of the most consistent principles is decentralization. In a competitive world, you must make decisions in the smallest operating units possible, or you will go out of business. The public school districts, of course, get students and money whether they succeed or fail. This means that they can’t fail in the traditional business sense. They can fail, but only in terms of educating their students.

Surely, we thought, if the board and the superintendent saw their management system as we saw it, then they would naturally move to create more autonomy for their “operating unit” leaders, the school principals. After all, leaders of large companies, once they see the benefits that accrue, naturally give more decision authority to people who manage the operating units.

But after several years of intense effort, the LEARN initiative failed. No one in public education seemed to care about the way that school systems were organized — or even to acknowledge that it mattered. I was particularly disappointed by the response from academics in the education field. Most researchers who study education will tell you that 97 percent of the difference between a high-performing student and a low-performing student is accounted for by the education and income of the parents and by the training of the teacher. They will say that how you manage a school, or a school system, makes no difference. But that is obviously incorrect, and I decided to spend the rest of my career studying how to organize school districts.

S+B: What happened next?
The LEARN group hired a team of researchers to go around the world and look for any successful example of rehabilitation of a large, urban school district. They came back in 1991 with only two. One was the charter school concept — the idea of creating semi-autonomous entrepreneurial schools within a public system. This had only been implemented in England and Canada; it had not yet come to the U.S.

And the other was a radically decentralized school district in Edmonton, in the Canadian province of Alberta. Since 1975, school principals had controlled their school budgets, decided what staff to hire, set their own curriculum, and designed their own schedules. We were persuaded that this was the right approach; we set on Edmonton as the model to study and introduce to Los Angeles.

S+B: Did that mean persuading the school board?
No, neither the superintendent nor the school board were interested in change at that time. We started with the president of the teachers union, Helen Bernstein. Then we went out and enrolled 700 community organizations to become trustees of LEARN. These were groups like the NAACP, the Mexican American Legal Defense and Education Fund, and the Urban League. We went through massive planning sessions with them in which, for example, Bob Wyckoff and I cochaired a workshop on governance with 75 people. Some of these meetings went from 8 a.m. until 6 at night. We revised and redrafted our plan until everyone was satisfied and all 700 community organizations signed on to it.

S+B: Why was that important?
Many businesspeople, especially in the 1980s, tried to get involved, just as we did, in fixing the schools. They did not want to face a labor pool of illiterates, to rely for customers on an uneducated, low-income population, or simply to watch their communities decline. With the best of intentions, they put a lot of their time and their companies’ money into the fray and they came up empty. I think they concluded that they weren’t wanted and didn’t know how to do it right, so their efforts would be better spent elsewhere.

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