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The Letter From: My Market Exemplars

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If the post-communist former Soviet empire is any guide to changing economic sectors from vertically integrated government monopolies to markets of diverse private sector providers, it is thoroughly unreasonable to expect a smooth transition. Government doesn’t know what it’s doing; indeed, it is conflicted about the move. Pre-existing economic interests protect their positions by political means. Every new provider does not have society’s best interests at heart, and all providers are trying to figure out what’s required to survive and thrive. Investors act first on faith, and only come to understand the specific risks afterwards.

Welcome to America's school improvement market. With an opening that began in the early 1990’s, it is not quite twenty years old. So it is unsurprising that whether the subject is federal and state regulation; the role of school districts; the reactions of organized labor, insider consultants, and dominant publishers; the quality of provider offerings; or the flow of investment, problems outnumber solutions. It is also no surprise that someone who favors well-ordered markets rather than simply "the private sector," would have more opportunities to point out bad and incompetent actors, and where the transition is going badly, than to discuss exemplars.

That said, my support for market-based school reform is grounded in practice, not analogy, theory or ideology.

No doubt, I start from an understanding that government monopoly aligned with a multinational publishing oligopoly, “friends of” consultants, and over-organized labor just hasn’t done the job of educating students that the nation requires. But I move quickly to first-hand experience with the good that markets can bring to public education.

What about my exemplars? Many people come to my mind, few are the darlings of a media enamored with the new spin of social entrepreneurship. I’ll discuss several to make a few points.

Sheila Balboni, Executive Director of Community Day Care of Lawrence, Massachusetts extended that group’s mission by founding the Lawrence Community Day Public Charter School – part of the state’s initial cohort. To my mind, the hundreds of local nonprofits across the nation with social missions grounded in a specific community remain the key to charter quality at scale. Their leaders are the original social entrepreneurs, risking organizations they took years to create and nurture. Pro-charter philanthropy’s alternative to investing in Charter Management Organization has always been creating the supportive operating environment that will encourage executive directors like Ms. Balboni to start independent charter schools.

As its de facto grants officer, then its Chief Operating Officer, and finally President of its lending and equity investment activity, I had unhappy run-ins with every single leader of New American Schools’ independent Design Teams. But there is no group I admire more. Circa 1995, Success for All, Expeditionary Learning/Outward Bound, Authentic Teaching Learning and Assessment (ATLAS), America’s Choice, Urban Learning Centers, Modern Red Schoolhouse, Cooperative Networked Educational Community of Tomorrow (Co-NECT), Success for All, Audrey Cohen – Purpose Based Education, were all successful grants-based research and development activities inside larger organizations. The groups all had sufficiently positive results to follow the typical course at the end of a research grant – declare victory, write the final report, and move on to the next RFP. Instead, NAS Design Team leaders believed they had something valuable enough for schools to buy – when the typical approach was to find a grant. I can’t begin to explain the pains of birthing and growing eight organizations – and while I was responsible for seeing that our grants were employed well and our loans repaid – it was nothing close to what these leaders went through. I am amazed that every one of these programs exists in some form today, that they have achieved financial sustainability based on fees earned from their work, that they repaid their loans and equity, and that they remain among the school improvement providers with the best record of efficacy.
Collectively, these organizations have worked in thousands of public schools, yet thee relative success of Comprehensive School Reform seems to have escaped the interest of government policymakers and even the traditional education philanthropies that launched the activity.

Most policy wonks study issues, providing readers with ever finer grained explanations of how and why problems confound social entrepreneurs. I believe I read new studies on charter school problems with special needs students and facilities finance every year from roughly 1996 to today. The underlying challenge didn’t change; wonks just learned more about special education law and banking operations. Since the early 1990s California charter policy wonk Eric Premack has been turning analysis into something actionable. As Co-Director of the Charter Schools Development Center he and his colleagues provide charter founders and operators the skills, expertise and knowledge they need to solve problems. Premack was rewarded for his efforts by being tossed from California’s charters pro-CMO in-crowd.

Several NAS Designs were or became for-profit activities, but when I think of entrepreneurs I admire, I have to put National Heritage Academies (NHA) founder J.C. Huizenga at the top of the list. I have a lot of respect for John Golle of Education Alternatives, Inc., Bill DeLoache and John Eason of Alternative Public Schools, and Steve Wilson of Advantage Schools, but NHA is still in business and Huizenga is still in control. I think his pro-voucher politics creates unnecessary political risk for the school improvement industry, and I think he made a mistake forming a separate EMO trade group instead of a division with the Education Industry Association. But there's no doubting he's built a solid com[any. While the media focused relentlessly on Chris Whittle's showmanship and Edison's stumbles, Huizenga proved the Management Organization model can work, whether or not many others can repeat his success.

By action or inaction, deliberately or buy default, founders are responsible for their organizations' culture. organizations. One distinguishing feature of the providers that evolved from New American Schools Design Teams is that research and evaluation were not an add-on, an afterthought intended to comply with SBR requirements or to ease marketing. These functions were literally “built into” the programs by their founders, and they remain not simply part of what’s being offered to schools, but a defining feature of these providers corporate culture.

Fortunately they are not the only providers with this value. Steve Ritter, co-founder of Carnegie Learning remains its Chief Scientist. Steven L. Miller, a founder of Scientific Learning Corporation remains its Senior Vice President for Research. Barclay Burn founded Learning.com and remains its Chairman. Wireless Generation co-founder Greg Gunn remains its Chief Scientist. In each case, the lead researcher and members of the team that created the education program from ongoing research, carried through into product development, initial sales and subsequent growth. There is a vast difference between school improvement organizations where evaluation matters because evaluators are core to the management team and ownership, and those dominated by marketing and finance where researchers are employees or independent contractors.

If government got serious about Scientifically-Based Research, these firms and NAS Design Teams would be giants. Because government has not, they simply can't wrest substantial market share from the marketing machines that are the dominant publishers.

The fact that the organizations founded by these people thrive is all the evidence I need to believe that market-based reform can work better that what it is trying to replace. At least as important to me, they not only justify my ongoing critique of the transition - they demand it. At great sacrifice, they've demonstrated that quality at scale within a reasonable price offering an attractive return to investors and philanthropy is possible. Allowing them to be crowded out by for- and nonprofit providers who cant or don't really care to try would be a great betrayal to them and our market-based society.


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