Is your school a ‘business’?

Is your school’s Principal the ‘CEO’?

Are your school’s parents ‘customers’ of the school?

In my various involvements with school Councils and their members, I increasingly hear use of the language of the business sector applied in the school context.  Examples include –

o   Parents referred to as ‘customers’ of the school…and occasionally even being described as the school’s ‘shareholders’

o   The Principal described as the ‘CEO’ (ie Chief Executive Officer)

o   The school having a ‘brand’

o   Teachers being labelled as ‘human resources’

and so on.  I will discuss the first two of these matters.

It is not this language of itself that is concerning, rather that such language is an indicator of the culture of the approach used in governing the operations of the school.  (By ‘culture’ I simply mean ‘shared practices and beliefs’).  Language not only tends to reflect organisational culture, but is also important in determining culture. 

The use of the language of business appears to lead to the adoption of the practices of business.  Schools, however, in a number of very important respects are not businesses.  They are schools.

As an aside, I am an avid reader of the newsletters and annual magazines of a various independent schools – it is instructive of the thinking that underpins the management and governance of a school to see how and where sports, academic achievement, the profile of religion, and staff, are presented in a given school’s publications.

My concern is that we might now be seeing the early stages of a gathering trend.  This trend is seeing independent schools, quite possibly inadvertently, slipping into a way of thinking about school governance that involves losing sight of what these schools are really all about – the education of young people, and instead overly emphasising business perspectives.

My position is that the school Principal is not the ‘CEO’, and therefore should neither be thought of, nor referred to, as such.  Further, and perhaps more importantly, I believe that parents are not ‘customers’ of schools.

Before I elaborate, I would like to make a further specific observation on one thing I hear from school Council members, and most often from those with a business background:

‘But the school is a business…we have to run on sound business principles.’

My reaction is to say (at least to myself, when I am trying to be polite):

‘Yes, but please tell me something helpful, and that I don’t know already!’

Of course a school, like any organisation, has to be financially sustainable.  It must avoid insolvency, and comply with other important externally-set legal and regulatory requirements, including meeting the obligations of funding contracts from state and federal governments. 

But, the purpose of a school is not to avoid insolvency, nor is it to meet the funding contract obligations.  It must do these things in order not to fail as an organisation, because if it fails it cannot achieve its real purpose – the education of young people.  I would also argue that the purpose of a school is not of itself to grow enrolments – this is a just a means to an end.

The Principal as ‘CEO’

The traditional model for the structure of school senior management is where the Principal is directly accountable to the School Council for all matters educational – learning, teaching, pastoral care.  Under this model the Bursar or Business Manager also is directly accountable to the Council, for administrative functions including financial control, payroll, facilities maintenance, etc.  Together, they are then jointly responsible for the overall success of the school.

In modern business-speak, this is called a ‘split-CEO’ model, and said to be unsound.  In business practice, ‘single-point-accountability’ (ie one and only one person to be accountable for something, including overall management of the organisation) is seen not only as desirable, but essential to ensuring that good results are achieved.  The argument is that unless a single individual is held to account for results, in effect no-one can or will be.

It is interesting to reflect that, for all Boards/Councils, including those in the business sector, the Board/Council functions as a collective ie with shared accountability.  This seems oddly inconsistent with the position that there then has to then be a single ‘CEO’ in charge of the school/company.

The simple reality is that, for many decades, independent schools across the globe have successfully operated the so-called ‘split-CEO’ model ie Principal and Bursar individually being accountable to the Council for their own portfolio areas at the school, and also working

collaboratively together for best overall results ie strong educational outcomes, within the context of a school that is financially sustainable. 

For this to work, the Principal, Bursar and also the Council Chairperson must have very good interpersonal skills, and the capability and willingness to work through the inevitable difficult issues and situations that arise.  I would argue that indeed it is only possible to know when a School Council and senior management are any good when you can see them successfully and credibly grappling with matters that involve conflicting interests and values at the school.  One would hope that these qualities would be in evidence at a very good school, given the very nature of what schools are about. 

The ‘split-CEO’ model has also worked well in the performing arts sector, where an Artistic Director and Business Manager have jointly been responsible for running the company, and separately responsible for their specific parts of the company ie the ‘art’ and the ‘business’ elements respectively.

The problem is that the kind of person required for a ‘CEO’ position at a school is very likely to be quite different to that required for a ‘Principal’ position.  The ‘CEO’ must have well-developed financial management, marketing, competition, and related general business skills, as well as being an educator and leader/manager of educators. 

The big risk is that the prime educational focus will be subsumed (or even lost) beneath a focus on competing with peer schools, the numbers game of enrolments and the ‘bottom-line’, and the elevation in importance of the views of non-educators generally.

Parents as ‘Customers’

Very much linked with the ‘CEO’ model at schools is the idea of parents as ‘customers’ of the school.  This of course reflects the notion that parents pay fees to the school, and therefore should be seen as ‘purchasers of the school’s “product”’ (another piece of business language!)  The argument runs that parents should have the right to make demands of the school and its educational program.  The argument then extends to making the observation that if there aren’t fee-paying parents at a school, there won’t be a school at all (which as a matter of fact, rather than of argument, is true).

It is of course the case that parents who have elected independent school education do, and should, have the right to determine to which school they will send their children, and I for one would never seek to dispute this. 

The question, nevertheless, is whether parents at an independent school should be thought of and treated in the manner of ‘customers’ of a business.

‘Customers’ of businesses can be divided into ‘transactional’ and ‘relationship’ categories. 

‘Transactional’ are those who purchase a good or service basically on a one-transaction-at-a-time basis – they are inclined to, and do, change from whom they buy, based often on price

considerations ie there is little or no loyalty to a particular seller business.  If parents are ‘customers’ of schools, then clearly they are not ‘transactional’ customers.

‘Relationship’ customers are, on the other hand, ongoing multiple-purchasers from the one business.  This is more like a parent at a school, however the great majority of parents typically make a 5-up-to-12-year commitment at a given school, costing many tens-of-thousands of dollars, and concerning the most important things in their lives – their children (note – I have carefully avoided using the business word ‘assets’ to describe children here).  This is hardly the stuff of ‘buying things’.

I think I can illustrate this by referring to a statement attributed to a Council member of an independent school:

‘The customer* isn’t always right, but it’s the only thing we have’.

*meaning parents in the context of the statement

I refute this unequivocally.  The ‘customer’ is most definitely not ‘all the school has’.  Professional vocational educators (as in the manner of doctors, lawyers, engineers, architects, and sundry other professionals), whether in school leadership positions or actual class-room teachers, have their own knowledge, training, experience and whit to know what is and isn’t appropriate for the education of their student body as a whole, and also on an individual student basis.

Should a school, for example, water down its traditionally rigorous senior school curriculum to satisfy parents?  Should it pander to individual parents whose main goal is promotion of their own ‘gifted and talented’ children; or increase the already-burdened teaching staff with parental interference in what are clearly teacher-student issues such as learning discipline?

I am also privileged to have been a presenter of director-education sessions for the Australian Institute of Company Directors for almost 20 years, and currently do this in a number of states on multiple occasions over the course of each year.  Almost every time I ask the members of the group the following question:

‘Of the various “stakeholders” of a fee-paying independent school – state and federal governments as funders; old scholars; current parents; church (assuming a church affiliation); students; staff; other friends  of the school – which group is the most important?  That is, which group comes first – when ‘push-comes-to-shove’, in whose interests are the really difficult decisions made?’

I continue to be considerably disappointed that a significant number of people say ‘the parents’, based on the arguments as set out above.  After some discussion, almost everyone is happy to agree that the proper answer is ‘the students’.  Schools exist to educate young people, as noted earlier.

The real question is – ‘which stakeholder group comes second?’

The groups usually split pretty much down the middle, naming ‘the parents’ (who pay the fees) on the one hand and ‘the teachers’ (who provide the educational experience) on the other.  Those who say ‘the parents’ more typically support the ‘Principal as CEO’ view and ‘parents are customers’ perspective, whilst those who say ‘the teachers’ more usually support the alternative view.

My answer is: ‘Both teachers and parents together – without fee-paying parents you won’t have a financially sustainable school, and without motivated, capable and committed teachers you won’t have a school to which parents will pay fees to send their children.’

The challenge for the school Council is how to achieve this.  I strongly suspect that the ‘Principal-as-CEO’ combined with the ‘parents-as-customers’ approach will not be successful at this, at least in the long run.