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?

Why a Vision is So Important

When we first start working with an organization, whether it be a school, college, university or nonprofit, the first thing I look for is a vision. Has the organization clarified the end goal to which they aspire? Have they determined what they are working toward? And, most importantly, does that goal matter to the rest of the world?

A vision statement is really about answering the question to why - and why it should matter to everyone else. Why is it so important?

• It is the greatest statement of relevance for an organization.

• It positions the organization in the minds of stakeholders and consumers as working collectively on a trajectory to accomplish something bigger than themselves.

• And, it moves an educational institution from being a mere transactional provider of services to a transformational organization, working toward needed change.

When we find a school, college, or university uninspired or unimaginative to do their work, or - better yet - without clear direction - it is almost always due to a lack of a vision.

How to Write an Inspiring Vision -- And Why it is So Important

Note: If you have ever wanted a tutorial in how to write an effective and inspiring vision statement, you might save this post and use it as a blueprint for future work.

While nearly every school, college, and non-profit with which we work has a mission statement, less than 20% actually possess a vision statement. Why? Most likely because it is hard work and the organization has not matured enough to think about setting strategic aims higher than their own culture. However, a vision is incredibly helpful in formulating strategy because it is really about future state, not current state.

Most great schools and colleges possess a “docket of statements”, complimenting each other, using common, accessible language. As we have shared in prior posts, the following definitions are useful:

• Mission = What You Do

• Vision = Why You Do It

• Educational Philosophy - How You Do It

• Core Values - Ideas You Live By

In order to create a vision, it may be helpful in visualizing what a solid vision statement looks like in action. Here is an example of a K-8 school, in Seattle, that is progressive and works with gifted learners. We developed their statements over a decade ago and they remain durable today.

Seattle Country Day School - Mission, Vision, Values

Three things might be clear when reviewing their vision:

1. Their statements are short, easy to remember, and use common, accessible language so that all readers know what they mean. Those parameters were set long before the statements were written.

2. Their vision statement actually is tied to a problem that is bigger than the sum of the school. The best visions are larger than the organization.

3. Their statements have parallelism between them. They play nicely with each other, using common words that have shared meaning to their stakeholders.

So, to write an effective vision statement, a school or college might appoint a small, three person authoring committee that will take input from the community and develop drafts of a statement for review and consideration. And, before they start drafting, they set parameters for their work, answering three key questions while engaging the community key stakeholders, such as their board or strategic planning committee:

1. What parameters should we place on our vision statement? Some examples could include "easy to remember", "short", or "inspiring". Setting parameters is like placing the guardrails on their work.

2. What three words need to be included in the vision statement? Why? This will help clarify key words that engender powerful meaning in their shared culture.

3. Finally, what larger problem is the school or college trying to solve? Visions answer the question of "why", not “what”? Why does the school or college exist? It is more than just providing a good education for their students. There are a lot of schools or colleges that do that quite well. But, what is the school or college uniquely qualified to do that no other school in the region or nation can do as well?

Armed with the input from the three questions above, a small authoring team can get to work, developing a series of drafts that will be later reviewed by a large committee, such as the board or steering committee. And, for most organizations, it takes several iterations of drafts before they land with a desired, finished product that will drive the future.

Finally, remember a vision is more than a statement; it sets strategic direction. It should be barely achievable, pushing and inspiring people to work together to accomplish something greater than themselves. A good vision should drive an organization for decades as it chips away at a larger challenge or issue that really matters.

So, if your organization falls into the 80% category of schools or colleges that have failed to write a durable and memorable vision, use this post as an example of how to develop an effective statement for the future.

Drucker's Prediction

Peter Drucker was the modern management guru, but also an acute observer of culture. He understood the future challenges the world would face and believed deeply in the role of the nonprofit in addresses them. Although he passed away in 2005, Drucker’s words are durable and advice perhaps more relevant today than ever.

Yesterday I wrote about the challenge of building community in divisive times and the role that education has historically played in this work. This quote of Drucker’s always inspired me to find creative ways to mobilize our organizations for the needed good work in the world. I hope it inspires you.

““The 21st century will be the century of the social sector organization. The more economy, money, and information become global, the more community will matter. And only the social sector nonprofit organization performs in the community, exploits its opportunities, mobilizes its local resources, solves its problems. The leadership, competence, and management of the social sector nonprofit organization will thus largely determine the values, the vision, the cohesion, and the performance of the 21st century society.””

Restoring Community in Changing Times

If “the work of the school is determined by the needs of society”, as the prolific educator Francis Parker claimed, we have a deep challenge in front of us as schools and colleges rest up for a new academic year. The frantic pace of change in the past two academic years have left educators depleted of energy and some campus communities polarized by divisive issues. We have some restorative work to do in the future.

Not long ago, campus communities were seen as enlightened and hopeful places - safe harbors - in times of political turmoil and social unrest. They were places that rose above the political fray to create communities of safe discourse; they placed personal and community wellbeing at a premium; and they held close their mission and North Star. Today, many campus communities are at risk of falling into the same polarizing tribal behaviors that have so divided America, such as media, social media, and the politization of social issues, contributing to the culture wars.

The work ahead will be critical to the future of the education industry. Schools and colleges will be well-served to look beyond the current needs of their audiences and into their real reason for existence. They will look deeply at their mission, vision, and their core values, using them as the foundation for restoring community. And, if their mission, vision, and core values don’t provide the clarity needed for the task, they will be well-served to sharpen those elements in this critical time. They will need to be clear about their contribution to the future in a rapidly changing landscape.

Defining True Innovation

The concept of innovation must be among the most overused in business circles today. In our industry sectors, schools, colleges and nonprofits claim innovation as a common organizational attribute. And, what they pass off as innovation is often nothing more than staying up to date with the industry.

No, innovation is much more than that. True innovation does four things:

Innovation breeds choice. Most good innovations provide customers with more choice and an increasing stratification of offerings.

Innovation decreases price. Most good innovations find a way to live out “Blue Ocean Strategy”, giving consumers more choice with less cost.

Innovation enhances the experience. Most great innovations make the product experience better for the end user, the customer.

Innovation produces integration. At the end of the day, most great innovations end up living within an ecosystem of products, with mixed price choices and mixed delivery options. Innovation rarely remains a stand alone product category.

True innovation actually benefits the end-user, the client, by bringing more to the table without asking for more in return.

Every Effective Strategy Starts With a Compelling Vision

If every effective strategy starts with a compelling vision, why do so few schools and colleges spend time creating one? Where is their vision? Interestingly enough, in all of our work with independent schools and colleges, fewer than 20% of them possess a vision statement when we initially work with them. Sure, all of them have a mission statement but very few actually possess a vision statement. What's the difference?

There is an enormous difference between a mission and a vision. Try these definitions on for size.

• Mission Statement = What you do or the reason for your organizational existence. Mission is about your organization and the past and present.

• Vision Statement = Why you do it or the successful completion of your mission rendered in terms of contributions to society. Vision is always about something larger than the organization itself and it is future looking.

From my experience, very few organizations actually change their mission over time. Sure, they might change the current language describing their purpose, editing the actual statement, but they really don't alter their general purpose or reason for existence. But, since a mission is actually a "rear-view window" sort of glance, does it really help move an institution forward? Not really. It actually helps most organizations stay grounded in the past. And, that can be a real problem toward embracing change.

Most strategists would agree that vision is far more important than mission or core values to formulating strategy and empowering an organization to work together. Imagine if Martin Luther King, Jr. would not have have shared his vision for equality ("I have a dream") or if John F. Kennedy, Jr. would not have shared his vision for NASA ("by the end of the decade we will place a man on the moon")? It turns out that a compelling vision is about something bigger than us and, ultimately, what really drives people to work together and energizes a movement. Why is it, then, that independent schools and colleges fail to articulate a vision if they are so important? Probably because it is hard work and requires imagination and thinking beyond the organization.

But, here is another practical reason why a vision is so important. It informs communications. Want to know an easy way to spot an organization that does not possess a compelling vision? They focus on branding and messaging first. Vision really should inspire the way we articulate our school or college culture and programs. Rather than focus first on “messaging” or “branding”, we need to remember that it all starts with vision. All great communication programs start with an excellent vision. This is the best order in which to start a communication process:

1. Visioning is the most important aspect of any organizational exercise. It all starts with vision, and great visions are long-term, ambitious, and bigger than the organization.

2. Great positioning is the result of a strong vision. Positioning is finding that which is singular and differentiating about your organization. And, keep in mind that positioning is competitor-centric.

3. Strategic planning is the work of setting priorities and then creating a three or five year plan that helps operationalize the vision and positioning platform for the current short term chapter of an organization.

4. Marketing is the art of creating value for the client by turning that vision, position, and plan into a short-term strategic marketing focus. And, keep in mind that value is in the eyes of the beholder, so marketing is a client-centric process.

5. Branding is the cultural expression of organizational values.

6. dentity is the visual expression of those values.

7. Messaging is simply getting the talk points down.

The problem is that most organizations jump right in at #4 through #7 in this process, failing to get the larger picture in focus, rather than doing the important work of creating a vision. I believe that setting long-term vision is just as important in creating empowering communications as it is defining organizational objectives.

Vision is bigger than mission, because it is bigger than the organization and it answers the question of "why you do what you do", not just "what you do". It is the why that is so important in not just developing strategy, but in creating compelling communications.

Does your organization have a vision? And, how is it informing your communications program?

Defining Innovation - Let's Get This Right

We hear a lot of folks talking about educational innovation today as if it were an educational philosophy or platform unto itself, like Montessori education, Jesuit learning, or single gender teaching.  It is not.  Innovation is not an educational platform, it is a mindset, and it has been around in every industry from the beginning of time.  This is not a new idea.

According to our good friends Wikipedia (an innovative entry itself), here is the definition of innovation: 

"Innovation is the application of better solutions that meet new requirements, inarticulate needs, or existing market needs. This is accomplished through more effective products, processes, services, technologies, or ideas that are readily available to markets, governments, and society. "

So, to learn what innovation means to the future of education, let's review what innovation has meant to other industries.

• Innovation breeds choice. Most good innovations provide customers with more choice and an increasing stratification of offerings.

• Innovation decreases price. Most good innovations find a way to live out Blue Ocean Strategy, giving consumers more choice with less cost.

• Innovation enhances the experience. Most great innovations make the product experience better for the end user, the customer.

• Innovation produces integration. At the end of the day, most great innovations end up living within an ecosystem of products, with mixed price choices and mixed delivery options. Innovation rarely remains a stand alone product category.

The future of education is not about innovation that eliminates everything we know to be true about our industry. It is far more than that. I think we need to start looking at innovation at the way it will play into our ecosystem by driving more customer choice, better price, and stronger integration into our product lines. Unless we want to argue with history, I think we are safe to say that placing innovation in context might be useful to our campus conversations.

Keep It Visible

Most of us have seen either clever or practical methods of keeping the mission of an organization in the forefront of our thinking.  I often see colleges and schools place their mission on a plaque in main offices, classrooms, or on the reverse side of a business card.  However, I saw a really interesting and simple idea recently that was very effective as I facilitated a meeting of an executive team and board of trustees task force. 

Located in the middle of the rectangular conference room table in the boardroom sat a framed image of the mission statement of the organization.  It was placed strategically in front of participants as if to invite them to pick it up and pass it along to others in the discussion.  As we moved into important, mission-specific conversations, many would pick up the mission statement frame, point to a specific element of statement, and then pass it along to others.  Throughout the session, the framed document moved from person to person and silently yet symbolically informed both the conversation and the outcome.

There is nothing like a visible reminder of the mission statement as a active, guiding principle that should inform all strategic decisions.  The image of the mission statement in the conversation should be one of a durable, active, guiding force in the future of the organization.  Try it on for size.  Frame up your mission statement and leave in laying at the center of your critical discussion table.  I suspect it will shape the outcome of the discussion, assuming you buy into the statement.

Why Vision and Strategy Are More Important Than Ever

The current health crisis that we are all experiencing will pass. At some point, we will have a vaccine and treatment for it and, hopefully, business and industry - and our daily lives - will return back to normal. At least we hope so.

But, when it does, it will be a new normal. Things will have changed in our world - significantly. A majority of homes throughout the world have now experienced remote work and education. Some will have experienced large gaps in education and employment, while others will have maintained or even deepened their work load or schooling. Depending upon their experiences and preferences, we will see new pathways to work and learning established and fortified. We will enter into a new work world that will be forever changed.

How will place-based education, remote learning, and blended learning fit into a new global environment post COVID-19? The answer to that question is dependent upon your organizational vision and strategies for reaching it. If your goal is survival, that will not be enough. If your goal is to reach new audiences and build new pathways to reach them, COVID-19 will provide that opportunity. And, if your goal is to build a new model of education for the future, where the issues that have plagued the industry forever (assessment, credentials, scheduling, cost) are addressed with a new urgency, you have found the right moment in time.

But, it all hinges on having a clear vision for the future and the strategies that support it.