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


William G. Ouchi: The Thought Leader Interview

Third, issues of race and religion lie at the heart of our public schools. Why would poor or Latino parents trust a wealthy white man from a giant company to actually care about their children? Why should they trust him and take his advice? That’s a reasonable question. So, if you are a businessperson trying to change the schools, you have to commit to be involved long enough for community leaders to get to know you and decide they can trust you. Until that happens, I don’t know how you can possibly be effective.

Attractive School Leadership

S+B: What happened after you realized that the L.A. school board wouldn’t implement your proposal?
Local community support was necessary but not sufficient; we would have to build an ironclad case. So we went back to research — to the study that I ultimately wrote about in Making Schools Work. We hypothesized that local autonomy is imperative in a large school district, just as it is in a large company. By 1994, there were three school districts in North America with local school autonomy: Edmonton, Houston, and Seattle. So I compared them against the three largest U.S. districts, which were New York City, Los Angeles, and Chicago.

We interviewed a 5 percent sample of the school principals in each district; 66 principals in New York City, for example. We went through each one’s budget, and found that in New York, Los Angeles, and Chicago, principals respectively controlled 6.1 percent, 6.7 percent, and 19.3 percent of the money spent in their schools. Then we went to the three decentralized districts. In Seattle, principals controlled 69 percent of the money. In Houston, 80 percent. And in Edmonton, 91.7 percent.

S+B: Just for the sake of comparison, what would a typical corporate business unit manager control?
Of the money spent in that unit, close to 100 percent. I’m not including the money spent by the district’s central office, which constitutes 30 percent of the budget of a large urban school system. Incidentally, no business could survive at that rate.

Then I found that, indeed, the districts with local autonomy showed higher student performance and a smaller achievement gap between white and Asian students on the one hand and Latino and African-American students on the other. In short, if you go to local school autonomy, student performance gets better. I wrote about this in my book, and today, in part because of that book, eight school districts in the U.S. are implementing local school autonomy.

S+B: Only eight.
Well, listen to who they are. Boston, New York City, Oakland, and Chicago are each launching programs. San Francisco and St. Paul have had district-wide local school autonomy for six years; Seattle and Houston for 10. Hawaii is introducing a state law mandating local school autonomy, which I helped draft. And Dick Riordan, who was California’s secretary of education until June 2005, managed to pass a similar law for the state.

The results prove the concept. Boston has only 19 schools in its program, all in hard-core high-poverty areas. They issued a report in January 2006 that shows that those 19 schools far outperformed the other schools in Boston in student performance. In New York City’s “autonomy zone,” as Chancellor Joel Klein calls it, there are 48 schools where the principals control 100 percent of the money. They have been so successful that New York is increasing the number of autonomous schools to 200 in September 2006.

S+B: Why does giving principals control over the budget make such a difference?
We have a research project under way now in which we’re interviewing 527 principals with local autonomy and visiting their schools. We’re focusing on inner-city high schools, which have proven in the past to be the hardest schools to improve. We’re finding that control over the budget gives principals control over three key school decisions: the staffing mixture, curriculum, and schedule.

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