Why Private Schools -- Especially Independent Schools -- Are Failing to Achieve Their Potential

“Private schools lament that their business model is broken and therefore unsustainable. But, they follow some uncommon business practices and exhibit severe limitations in their thinking that literally threaten their existence.”

— Ian Symmonds

Let’s talk about market share for a moment. Did you know that private schools in America serve roughly 9.6% of the available school age children in a given metro area? And, what is more shocking is that independent schools serve roughly 1% of school age children in America. Most people are surprised to learn that independent schools barely scratch the surface of marketplace penetration, generally speaking. Why is that? And, what can be done about it?

Private schools lament that their business model is broken and therefore unsustainable. But, they follow some uncommon business practices that literally threaten their existence. Consider this nexus of business and see if you can make sense of it:

1. Price: Independent schools price themselves at the highest price point in the market where a tiny fraction of their metro area can afford them, therefore placing severe limitations on their marketplace.

2. Admissions: They also attempt to follow selective admissions, placing yet another limitation on their potential available market.

3. Marketing: They place undue pressure on their advancement and strategic enrollment management people to find “more full pay families” and have aggressive marketing campaigns to sustain their operations. Heck, there are even professional development seminars aimed at finding more full pay families.

4. Diversity: Even though they have severely limited their potential enrollment down to 1% or less of the school age children marketplace, they then try to thread the needle by trying to acquire more diversity in their enrollment.

It is a crazy business model, where price goes up, enrollment goes down, and, most importantly, the overall impact of the industry is severely limited. Honestly, how can you have a tremendous impact on the world through your products and services — and even claim to be somewhat diverse — by serving 1% of a marketplace? I used to call independent schools the “Swiss watch” of the education industry until I learned that Swiss watches serve, as a cohort, a larger segment of their industry than independent schools.

I used to be deeply concerned that we have too many private schools in mid-sized to large markets that are trying to do the same thing and competing for the same, full pay families. That was five years ago. Now, I am worried that independent schools - and, to some extent - all of the high tuition, small enrollment schools out there trying to live in that limited space - are on a path to irrelevance and extinction if they don’t start addressing this limitation in thinking and creativity.

The late management guru Peter Drucker reminded schools that they live and operate in the non-profit space. The mission of non-profits is transformation, not profit, as it is for corporations and not policy, as it is for governments. He would argue that the only reason a non-profit would grow is that you believe the world would be a better place if more people had access to your goods or services.

I have a simple thesis: if the independent school industry wants to thrive and create more impact in the world, it starts with developing best in class products and services that can be scaled and delivered to different audiences. And, if more people had access to independent schools through different modes, my guess is that their impact would indeed spread beyond their existing market share.

As independent school educators gather later this month in Las Vegas for the annual NAIS conference, I throw down an interesting concept: what if independent schools could increase their market share of school age children to at least 5% in a decade? Imagine the impact on the world. That vision starts with developing a different kind of thinking about the limitations of the business model.

I have often believed that independence is the greatest asset of independent schools. It is in their name. Independent schools, as well as most private schools, can choose their mission, their delivery mode, their access points, and the markets they choose to cultivate. Can we move beyond trying to “find full pay families” as the holy grail of their existence and this threading of the needle business model toward true relevance in the coming decade?

What Did You Have for Breakfast?

"Culture eats strategy for breakfast." This famous phrase was initially coined by the late management guru Peter Drucker and then popularized more recently by Mark Fields of Ford Motor Company. Since Field's use of the phrase, it has been tossed around thoughtfully by many marketers and thought leaders. Most of us have heard the phrase, but, I am not sure how many of us have really thought about why culture is so important, perhaps more important than strategy.

Culture is an outcome of leadership. And, I mean leadership from both individuals and long-term institutional and organizational leadership. A strong and effective leadership model creates, in fact, a culture of shared beliefs. And, people - at all levels of an organization - share this culture and transmit it to others in the organization.

Mature organizations often are marked by a a real sense of identity, clarity around their shared belief systems and operating principles. A successful leader knows that their vision and strategy is important. But, they also know that their vision will largely be lost on an organization if it is not in line with the shared culture or an organization. So, word to the wise: read the tea leaves of the culture before you launch a vision or strategy.

A simple rule of thumb for organizational effectiveness might be this.

• Read the tea leaves to learn the culture or an organization.

• Create a vision and set of strategies that are in line with or can leverage that culture.

• Transmit the shared vision in language that is embraced by the culture.

• Rinse and repeat.

And the cycle continues, assuming that the culture is strong and healthy. But, what should you do if the culture in unhealthy and is in need of change? We will follow up on that topic in our next entry.

The Power of Brevity

Most organizational gurus will tell you leadership is all about influence. And, there is no better example of the power of influence than the short, inspirational “How to Start a Movement” TEDTalk from Derek Sivers. If you have never seen it - or need a refresher - check it out above.

Derek gets across a powerful point and teaches several leadership lessons in under three minutes. I have been so fascinated by his style that I looked him up on his website. You won’t be surprised that he incorporates the critical lessons from his TEDTalk in his site. Forget the personal branding, ego and bravado, and long list of accomplishments in nearly every other thought leader website. Derek invites you into his life through brevity of information, giving the reader “just the facts” as you discover more about him.

Brevity is a powerful concept, especially in today’s world. With so much shouting in the digital landscape, Derek teaches us an all important leadership and influence lesson:

Less is more. More or less.

The Leadership Model in Education is Tired, Broken and Not Prepared for the Future

The leadership model is a strange beast in education. We define the leadership function of education as executive leadership (head, president) and governance (board of trustees). Both models seem underpowered and ill-prepared to handle the fast-paced innovations that have recently and will continue to drive the industry.

Our experience tells us that there are three main gaps in the leadership model in education:

1. Boards are getting older, more power-based, and less capable of attracting the young, entrepreneurial mindset that is needed for adaptability to the changing market. Social entrepreneurs seek relationally-based and change-oriented work and the glacial pace of education boards is unattractive.

2. Heads of school and college presidents are increasingly being held to advancement, enrollment, and revenue goals that are not reasonable nor sustainable, increasing the volatility of their board relationships and threatening their length of tenure.

3. The acquisition model of executives (old school “search”) and board members (nominating committee) nearly ensures a lack of disruptive and adaptive change in a rapidly changing industry. They are models that maintain the status quo.

Over the years, we have learned that both schools and colleges are struggling to find the right leaders that are prepared to adapt to a rapidly changing world. The symptoms of this problem are painful, contributing to disruptions in organizational momentum. Leading educational institutions of the future will find new ways to adapt the leadership model to the challenges that schools and colleges face in the marketplace.

Isn’t it Time to Redesign the Stone Age Search Process?

With an imminent threat of a human resource shortage in literally all sectors and roles in education, isn’t it time for the stone-age search process to be reinvented? Numerous studies now show that the education sector is likely to experience a massive loss of faculty, staff, and leadership in the next two to three years. Call it what you like, but the “great resignation” will take a bite out of education in ways that we have never experienced in recent history.

Isn’t it time to redesign the Stone Age search process that schools and colleges have historically utilized to acquire human resources? The model is outdated, irrelevant, slow, and costly. It was never built for speed, efficiency, or effectiveness. It was build to move slowly and gain the consensus of internal stakeholders. I liken the old model to a below average gas combustible automobile engine trying to compete in a new electric vehicle economy; it can’t survive. We know that the days of the old model are numbered.

The traditional search process is a legacy system developed at a time when none of the existing environmental factors are in play. It was also designed at a time when education looked extraordinarily different and what we needed from educators and leaders was something very different. It cannot meet the needs of today, let alone tomorrow. It needs to die a quick death and be replaced by a thoughtful, faster, more efficient, learning-centered model that meets the needs of tomorrow.

RIP traditional search. You lived longer than you were useful.

The Emerging Education Leadership Crisis

Any given week, I have the distinct opportunity to work with schools, colleges, and universities across the country and the globe. Whether it be a consulting assignment, facilitating a discussion around the future of education, or speaking to large association groups, I’m grateful to experience the industry in a pretty comprehensive way. The pandemic has accelerated those interactions, as more people have used technology to access professional development resources. These circumstances have given me both insight - and pause - to the condition of our leadership structures in education.

In a nutshell. I'm deeply concerned that we have too many small, unsustainable schools and colleges, all trying to make their way back to a past that is gone. I'm simultaneously concerned that we have a leadership crisis at these same schools and colleges, failing to pivot to meeting the opportunities and needs of the future and the courage to change their culture.

It’s pretty simple. Education had lots of preexisting issues prior to the pandemic, especially small, private institutions. Waning enrollment, changing demographic and consumer patterns, trying to reimagine the use of time and schedule, pricing and access, and the role of technology are among the top issues they were facing. The pandemic came and accelerated all of these issues to the forefront. The net result was that the pandemic placed all of these issues on the front burner, requiring immediate attention.

A small number of schools and colleges have responded by really rethinking their systems and structures to develop a new breed of resiliency. Those organizations have inspired me as they seized the moment to create something new and different that will propel them into the future. They will be rewarded because they got there first in their market.

But, unfortunately, there are many others in the opposite camp. These are the schools and colleges that continue to ask me if I really think education is heading for a reset. They don’t believe that the pandemic will change much consumer behavior and that their old ways remain highly relevant. They believe that their old systems and structures will actually increase in value as people head into a post-pandemic world.

Oh So Precious. A couple of months ago I wrote an article on what I call the “Oh So Precious” syndrome. This syndrome plagues the thinking of many schools and colleges, each of which are protective of their structures, not their mission, in some odd way, as if it is the thing that will sustain them. They are focused on preserving the organization, not the needs of their students or clients. They seem to have this odd belief that their old style of education will come back in vogue and that people will value it more and pay even more in the future. It is sort of like thinking that the third class postage stamp, snail mail, and payphones will become things again. It’s not going to happen.

The “Oh So Precious Syndrome” is a belief that they have to protect their faculty, staff and parents from the very innovations in education that will actually heal and transform education.

This thinking is not solely at the executive level. It plagues governance structures. In fact, we see board members driving some of this thinking, failing to understand the very nature of educational change and how it is accelerating rapidly.

Consumers are going to demand more accountability, flexibility, and accessibility to education than ever before as we enter a post-pandemic world. Count on it. They have seen what is possible and they will want more of it. That will require courageous leadership from our education sector to build an educational model that meets the needs of a changing world.

Redefining Leadership After COVID-19

Every crisis presents challenge and heartache, but it also provides opportunity. Perhaps the most obvious opportunity is when ordinary people step up to accomplish extraordinary things during a moment of crisis. Situational leaders become a bit like the plot line to the movie “A Star is Born”: certain preconditions exist in a moment of time that intersect favorably with their ability to lead.

We are all watching new leaders be born during COVID-19. I suspect every school and college is witnessing the real-time growth and ascent to leadership roles by specific faculty, staff, administrators, and even volunteers. What are the characteristics of these leaders? And, more importantly, what are the attributes of leaders in the new normal?

We are in the midst of an inflection point, where a new model of industry is being born. It will take a new breed of leader to succeed in the future. Here are five competencies that I believe will be the critical elements of educational leadership in the future of education.

Social Emotional Connectors.

In a world where disruption is normal and ongoing, future leaders will care for their people first. They will lean into the strengths of their organizational ethos and tap into emotions that calm and assuage their constituencies. They will have a calming effect to those they lead, providing needed consistency and continuity in their lives. It is this attribute that will enable them to galvanize a community around a strategic direction.

Environmental Scanners.

Future leaders will focus more than ever before on reading the tea leaves of the environment, including culture, competition, and economies, as insight into consumer behaviors. They will pivot organizational strategies according to the data they synthesize and internalize. Future innovations will be drawn from data, market insight and opportunity, rather than waiting for some new idea to emerge from an internal committee.

Honest Brokers.

In a world wrought with division, finger pointing, and elevated political rhetoric, there will be a resurgence of great leaders that are honest brokers of information. They will focus less on image and more on facts, being present with their people, and personal, place-based communication. Transparency will rule the day for these leaders, even if it is the hard truth. Their honesty will be an essential element of their credibility.

Trust-Builders Over Consensus-Makers.

We can all see now how the world can pivot quickly. Who would have guessed just two months ago that nearly 25 million people would file for unemployment in roughly 30 days during the wake of one of the largest economic booms in history? Historically, schools and colleges are process-oriented organizations that prefer to make decisions through consensus-building. There will not be time for these elongated processes to pivot in the future. Leaders will rely on their equity of trust with stakeholders rather than consensus among their people to set their future direction.

Entrepreneurial Mindset.

There is no question that education is moving to a more entrepreneurial model. Leaders of the future must be nimble, agile, and able to pivot an organization toward external opportunity and away from environmental threats. They will be entrepreneurs at their heart, with a sensibility toward social entrepreneurship, making the world a better place. And, they won’t be afraid to fail, seeing it as a necessary endeavor.

I also suspect that the outdated search process of finding college presidents and school heads will change in the future. Gone will be the days of 18 month searches through expensive search firms and three day interviews with every board, faculty, and staff member, along with their pets and children. No, schools and colleges will be more nimble and agile in finding leaders in their selection process.

And, we will see boards and governance change. Governance cannot continue to operate at a glacial pace in an industry that is being redefined. They must be an entrepreneurial part of the solution. They will need to be more adaptable and agile, responding more quickly to the external environment. They will nurture the growth and development of a new breed of board member, one that stays out of the internal operational weeds and responds to market challenges and opportunities, one that drives higher level thinking.

All aspects of education are being recalibrated. This process started long before COVID-19, which now is serving as an accelerant of our industry issues. Leadership must change in order to usher in a new way of doing things. A new model of leadership is just another element of the changing landscape of education, along with 1) how we use time (scheduling), 2) how we credential our work (assessment), 3) how we deliver it (continuous learning), and 4) how we pay for it (tuition modeling).