But in retrospect, these efforts had failed because the businesspeople saw the need for change as a logical, rational business design problem. They thought all the schools needed was some good advice. But school change was really a political process; school board members are elected, and public schools are a unit of government. We could not succeed unless we developed a politically undeniable consensus.
In 1993, we marched down to the school board with all of our organizations. We filled the auditorium. We presented the board with a box full of petition signatures. They voted unanimously to adopt our plan. But we didn’t realize that school board members can look you dead in the eye and tell you a stone-cold lie. We later found out that they turned right around and told their staff, “Don’t you dare implement that plan.”
S+B: What was threatening about this plan to this school board?
OUCHI: Any school board is threatened by the idea of granting power to the principals and teachers. That means the central office bureaucrats lose power, and they will not do it voluntarily.
Decentralize or Perish
S+B: Theory Z, which came out in 1981, had made a similar case to corporations, hadn’t it?
OUCHI: Yes. In retrospect, the core of our argument was the simple recognition that human beings have limited computational ability. None of us is smart enough to tell our subordinates how to do their jobs, so everyone must delegate authority down. But you cannot do that effectively unless you also put in place an accountability system that gives you adequate control, which is not easy to do. It takes thought, time, and investment. But the rewards are great.
This is based on research conducted on the American corporation since the mid-1950s by sociologist Peter Blau at the University of Chicago, by the Aston Group in the United Kingdom, by myself, and by many others. We all consistently found, in every industry and country, that there is a limit to the size of an effective organization. If employees essentially perform repetitive tasks, like assembly-line work or telemarketing, the maximum effective size is about 1,500 people. If employees are professionals, like consultants, accountants, doctors, lawyers, or teachers, then the maximum effective size is about 150. Larger sizes produce the pathologies of centralization, rising general and administrative costs, rigidity, and bureaucracy. And the only antidote is local unit autonomy: Decentralize or perish.
S+B: Was there a difference between your message to business leaders in the 1970s and what you would go on to say to the education leaders in the 1990s?
OUCHI: In the domain of management, the message was the same. But schools are not businesses. First, community leaders — business leaders and community group members alike — have no jurisdiction. You can be smart, rich, and energetic, but only the school board, a small group of people elected every few years, has any power to change the situation. Back in the 1970s, there was a widespread movement called school-based management, where committees of parents and teachers and community members diagnosed school problems and recommended solutions. But they had no power to change anything, and by the 1990s, they had all drifted away.
Second, education is the most emotionally charged realm imaginable. People care about their children even more than they care about their money. A child has only one shot at first grade, and if you ruin that year, you’ve made a big dent in his or her life prospects. So you cannot experiment with schools, nor should you be able to. You cannot say, “I’m not sure this is going to work, but I’m going to reorganize your school.” And especially in cities, public schools serve those who have no choice. The city of Detroit, at its peak, had 320,000 public school students. Today, it has 120,000. Everyone who could leave the schools has left them.