American Enterprise Institute

October 25, 2007

[Edited transcript from audio tapes]

8:30 a.m.	Registration
9:00	Introduction:	Frederick M. Hess, AEI
9:10	Panel I:	The Role of Entrepreneurship in Education
	Presenter:	Stig Leschly, SRL Capital Management
	Discussants:	Morgan Brown, US Department of Education Michelle Rhee, DC Public Schools Elliott Sainer, Aspen Education Group Jon Schnur, New Leaders for New Schools
10:30	Break
10:40	Panel II:	Addressing the Human Capital Challenge
	Presenters:	Christopher Gergen, New Mountain Ventures
		Bryan C. Hassel, Public Impact
	Discussants:	David Harris, The Mind Trust Sharon Robinson, American Association of Colleges for Teacher Education
		Larry Rosenstock, High Tech High
12:00 p.m.	Luncheon
12:50	Panel III:	Addressing the Financial Capital Challenge
	Presenters:	Daniel Pianko, Knowledge Investment Partners
		Kim Smith, NewSchools Venture Fund
	Discussant:	Jim Shelton, Bill and Melinda Gates Foundation
		Nelson Smith, National Alliance for Public Charter Schools
2:05	Break
2:15	Panel IV:	Addressing Barriers and Changing Policy
	Presenters:	Larry Berger, Wireless Generation
		Ed Kirby, Walton Family Foundation
	Discussants:	Don Shalvey, Aspire Public Schools
		Laura Smith, New York City Schools
3:30	Break
3:40	Panel V:	Making Supply-Side Reform Work
	Presenters:	Anthony Bryk, Stanford University
		Matt Candler, New Schools for New Orleans
		Chester E. Finn Jr., Thomas B. Fordham Foundation
	Discussants:	Wendy Kopp, Teach for America
		Chris Whittle, Edison Schools
5:10	Wine and Cheese Reception

Proceedings:

INTRODUCTION and PANEL I:  The Role of Entrepreneurship in Education

Frederick M. Hess:  I know it’s great to see so many friends from around town and in from around the country.  Hopefully we’ll have enough time during the day to give folks a chance to talk and catch up, but I’d like to try to keep things on schedule because everybody is so busy and has multiple commitments, so we’ll try to be very respectful of that. 

I’m Rick Hess, Director of Education Policy Studies at the American Enterprise Institute.  I’d like to welcome you here to join us today for this conference on The Supply Side of School Reform and the Future of Educational Entrepreneurship. 

The way this is going to operate is:  I’m going to just take a couple moments up front to set up what we’re talking about and to cover a couple of logistics.  We are then going to roll immediately into the first panel, which you see seated up here, and in the course of some brief intra-remarks the shape of the day should become clear. 

Before we get started, first, I’d like to thank the funders who have made this gathering and this research possible, The Ewing Marion Kauffman Foundation, for its generous support of all of this research and scholarship.  I’d also like to thank the other funders who underwrite and support the AEI education program, including, particularly, The Serle Family Trust. 

The second thing I’d like to do, is, Thomas, please stand up.  I’d like to thank Thomas Gift for helping to pull this whole thing together.  [Applause].  And, in particular, the reward for that is, if you have any questions or needs during the day, please grab Thomas or Morgan and Rosemary and Juliet.  They shouldn’t be hard to find around during the day. 

You will find copies of the papers that the authors are presenting today available out in the foyer.  You will also find, for those of you who don’t like carrying around bulky stacks, the full collection of papers on these CD-ROMS that are also available out there on the breakfront. 

With that, let me kind of explain what we’re trying to talk about today and what we’re hoping to accomplish.  What I want to suggest is that when we traditionally talk about school reform, whether we talk about it from inside of districts or outside of districts, we tend to suffer from the same conceptual mistake.  When we talk about reforming systems from the inside, we tend to talk about processes, we tend to talk about pedagogy in instruction, we tend to talk about all of these things that are vitally important, but we tend to talk about them in a way which presumes that we’re going to work around the existing architecture, we’re going to work around the existing plumbing, we’re going to work around the existing talent and personnel, and, somehow, if we use enough duct tape and heavy glue, we’re going to be able to make this whole thing fly in a way that it hasn’t previously. 

When we talk about reform outside, what we do is we tend to talk about social justice.  The choice community has, in my mind, a compelling argument, which is that if your child is stuck attending a lousy school, it’s perfectly right and appropriate to make sure that the family has an option to get the kid into a better school. 

But that tends to be where we stop when we talk about choice-based reform.  We talk about justice, we talk about opportunity, we talk about the right to choose.  It’s probably not more than a double handful of people in the country who’ve really talked seriously about how do you make sure that it’s a choice among quality schools and quality operations over the past decade or more. 

So, what I want to suggest, then, is there is a unifying problem to the way that we think about reform, whether we’re talking about it from a district-centric perspective, or whether we’re talking about it from a choice-based perspective.  It’s the same conceptual error, two different manifestations.  When we talk about it on the inside, we give short shrift to the talent, tools, and machinery that one needs, whether one is a chancellor or a superintendent, to really get the job done.  How do we get them the people they need, how do we create new models to help them support and train and cultivate and keep these people, how do we give them the specific problem-solvers they need, whether they’re tackling illiteracy or algebra instruction or anything else, and how do we give them the full compliment of tools that help them to solve the challenges they’re facing?

When we talk about outside, it’s the same problem in a different shape.  It’s unrealistic, in my mind, to expect that we’re going to actually turn around the educational challenges in the places we care most by hoping that enough 25 year olds are going to figure out how to get standalone schools up and running and somehow take these things to scale through a magic application of frenzy and elbow grease.  What we need to do is think about how we can create the conditions in which we stack the odds in favor of success for these organizations, and what we do in terms of the infrastructure, expertise, and human capital and the resources that they need to succeed. 

So what I want to suggest, then, is that when we think about a supply side model of school reform, there are two metaphors that are probably useful to keep in mind: one, when we think about fixing the districts from the inside out, it’s useful to think of the race to the moon analogy.  When Kennedy set out to go to the moon in ’61, there was not the assumption that we would get there by simply having the Department of Defense or federal agencies do more or less what they had done but more of it or more diligently.  There was understanding that we needed to think anew about how we were going to summon efforts, how are we going to engage private and public activity, how are we going to come up with the suite of tools that would make that activity possible.  That is what, to my mind, is a model supply side response from the inside. 

On the outside, we talk a lot about choice-based reform and social justice and deregulation of schooling, but deregulation, of course, is no guarantee of anything.  Deregulation can give us Putin’s Russia and Belarus, or it can give us desirable results.  [Laughter].  And, to my mind, one of the key insights which we have gleaned and which we know in areas like telecom and banking and anywhere else, is that we want to deregulate in smart and thoughtful ways.  A wonderful example of this was the Marshall Plan.  When Western Europe had been raised in ’45, we didn’t say, “Oh good, everything’s been torn down, doubtless we will like the results that spring forth.”  We said, “Look, we know that if we’re going to like what emerges from the political economies that grow up, we need to think about, how do we structure the sets of laws, how do we seed the right political institutions, how do we create the right incentives and frameworks, and how do we make sure that the right people are on the ground to take advantage and lead these nations in a way that what would seem to advance liberal democratic ideals rather than retard them.”  We tend not to do that when it comes to choice-based reform.  There is a notion that if we just deregulate, things will work out, and I think that is rarely the case, and particularly in a sector where we don’t have the infrastructure and networks to support the people out there trying to make a go of it. 

Well, what does this mean, then?  This means that our agenda today is to think and talk about these issues in a way that we routinely don’t.  What would it look like to talk and think seriously about creating supply side conditions, in particular, for those of us in the room who are policymakers or reformers or scholars or practitioners or funders.  What does this mean, and how can this inform the way that we think about the work that we do? 

All right, briefly, let me run through how the day is going to shape up.  On this first panel, I want to just try to get some of these notions, the fundamental insights of supply side reform on the table.  Stig Leschly is going to be sharing some thoughts about how do we understand the challenges of entrepreneurial reform, of devising new responses and new models for educational improvement.  And we’ve got an all-star panel up here to then help us think through the implications of what he talks about. 

The second panel is going to think particularly about the human capital and the talent development challenge. 

The third panel, right after lunch, is going to address the financial capital challenge and the role of venture capital. 

The fourth panel is going to talk about what it means to address the barriers to entry and to change policy in ways that makes it more possible for these entrepreneurs to come forth and devise the solutions that we need. 

And, because all of this sounds great in theory, but because this is, at the end of the day, kids we’re talking about, and we actually care about making sure we do this right, that last panel is going to talk about some of the challenges of making this work, particularly about the R&D challenge, how do we make sure that we’re learning and doing this better with each successive decade, how do we understand the quality control challenge posed by this new environment, and what are we learning about what it takes to make this work in reality. 

That’s going to be the shape of the day.  I think it’s going to be rewarding.  Again, you’ll be able to find the papers out in the foyer.  You’ll also be able to find them on CDs.  For those of you who don’t like to carry anything away, all of it will be available on the AEI website.  The address will be up here during the day.  And for those of you who can’t wait to get your advance order into Amazon, the collected and revised collection will be out with Harvard Education Press, September 2008, so get your Christmas orders in now. 

With that, I want to go ahead and introduce this first panel and get things rolling.  Also, for those of you who track these things more closely, you know that this effort, in many ways, builds upon a previous volume that we did with Harvard, Educational Entrepreneurship.  For those of you who are interested to see what it said, it will be available out here during lunch, for those of you who are interested in getting your hands on a copy.  All right, Panel I:  The Role of Entrepreneurship in Education, Stig will be presenting first, Stig Leschly is Managing Partner and Founder of SRL Capital, a buy-out fund he established in 2005 to acquire undervalued businesses.  Stig previously served as a lecturer at the Harvard Business School, where his research and teaching focused on educational entrepreneurship, and where his cases of school reform continue to be widely used across the country by professors teaching these kinds of things.  All right, we have four discussants with us, who, to my mind, are really an unparalleled set of folks to talk about these issues.  Morgan Brown is the Assistant U.S. Deputy Secretary of Education for Innovation and Improvement.  He was formerly Director of the Division of School Choice and Innovation in the Minnesota Department of Education.  Sitting next to Morgan, you will see Michelle Rhee, the Chancellor of the District of Columbia Public Schools.  Prior to that position, she was the CEO and President of The New Teacher Project, which she founded in 1997.  Elliott Sainer is President of the Aspen division of the CRC Health Group, and formerly CEO and co-founder of Aspen Education Group, a boarding school for troubled and underprivileged children for which he earned the 2004 Entrepreneurial Leadership Award from the Education Industry Association.  And, finally, we have Jon Schnur, CEO of New Leaders for New Schools, a national non-profit, which he co-founded in 2000.  Previously Jon served as Special Assistant to the Education Secretary Richard Riley in the Clinton Administration, and as a Senior Advisor on Education to Vice President Al Gore. 

Stig, would you please go ahead and get us started, Sir. 

Stig Leschly:  Thank you, Rick.  All I can think of right now is duct tape and glue.  I think that’s actually the topic of my talk.  I’m going to be quick because there’s a great panel here, so, I’ll try to get out of the way.  What I’m going to do in the next 10 minutes is to speculate for you, as best I can, about what it would take to reform, really reform, from the inside, even a single, large, urban school district in America.  At the outset, let me just establish and stress two facts worth highlighting.  The first is that big city school districts fail uniformly, severely, and persistently to remediate and prepare for college, non-white and poor students.  Achievement gaps by race and income exist today in big cities, more or less as they did in the 1980s, and unless I’ve missed something, there’s no variation at all in the trend.  As far as I’m aware, there’s not a single, large school district in this country that has ever changed in a meaningful, lasting way, results for disadvantaged kids.  So that’s fact number one. 

Fact number two.  Individual schools inside of big city school districts are astonishingly regulated in their daily work and choices.  They are subject to a crush of rules that control their day-to-day with astonishing force and granularity.  These rules emanate from labor contracts, primarily, and secondarily from pockets of state and federal law that control the intricate practices of schools, and from over-zealous district offices that also micromanage schools.  These rules, as a whole, decide who can and cannot work, who gets paid and why, how big or small schools and classrooms should be, which instructional techniques and materials should be used, how special education, gifted and foreign language speaking students should be taught, what training teachers should receive, how every minute of every day is spent, and on and on.  That’s fact number two.  In their daily work, public schools and big city school districts are encoded in a severe granular set of rules. 

So, with those two initial facts, here’s the main point.  For an urban school district to truly change, for it to improve dramatically and permanently, it needs to reorganize itself in two unprecedented ways.  The first reorganization involves schools themselves, where, in my view, the rules that I just described, these massive contractual, legal and administrative constraints, need to be called off, and, where, simultaneously the authority to lead faculties and schools needs to be vested completely and unflinchingly in principles.  The logic of this school level deregulation and leadership clarification is professional teamwork.  Leadership clarity and operating freedom are the basic, necessary organizational conditions of professional teams and complex work everywhere.  Simply put, for adults to form and endure in teams that undertake complicated adaptive work, they need leaders and freedom to solve their problems. 

Social science bears this out.  For decades university-based sociologists and social psychologists have studied the nature and organizational conditions of effective teams.  The overwhelming lesson from this body of work, which has been developed earnestly and without any particular interest in school reform, is that skilled teams universally demand high dosages of operating latitude and leadership clarity.  The private sector also illustrates this point.  Skilled private sector firms master creative, complicated work.  In fact, they’re probably better at solving nuanced problems than any institution in our society, and they operate with few internal constraints and with simple hierarchical chains of command.  The most important lesson from the private sector for school policy is that genuinely complex, adaptive and skilled professionals thrive only in well-led and loosely regulated teams.  So that’s the first component, I predict, of real reform in urban districts, school level deregulation and total leadership clarification in schools. 

The second component of real reform in urban districts concerns their central offices and the need to create in them an unprecedented ability to govern and monitor schools and to route resources swiftly among them based on results.  This resource allocation mechanism is largely non-existent in urban public schools, but it is vital to create turnover among schools and to favor and reward strong school-level teams over weak ones.  To have its desired effect, resource allocation in large, urban districts needs to be quick, complete and objective.  It should have sensitivity to students and minimize disruptions among them.  But, in every other respect, it needs to be merciless.  In focusing on governing schools, central offices should revisit, and, in many cases, discontinue their extensive efforts to manage, control and remediate school-level work.  Central planning of school-level work does not succeed in practice, and conceptually misses the point that schools need to be challenged with full freedom to rise or fall, and that the defining function of central offices should be, as things unfold, to route children facilities and funding away from weak school-level teams and toward their stronger counterparts. 

My speculation about the components of real reform in large districts, the sweeping deregulation of schools, this total leadership consolidation in principles, and this refocusing of paired central down offices on resource allocation is highly unlikely to occur.  It’s probably like that space shuttle that Kennedy sent to the moon.  It requires a full reconsideration of labor contracts in big cities, at state and federal law that over-regulates schools, and it also involves trusting central offices in their newly downsized form to objectively, firmly, and persistently reconstitute failing schools.  The odds of all that are low, and mostly for political reasons.  What usually transpires in districts tends to be incrementalist and partial reform, reform that does little to address the rules that I’ve described, and the breakdowns in teamwork and leadership that they ensure in schools. 

The low probability of what I suggest does not make it less necessary, though, I think, nor does it justify compromise.  It just proves that reformers should hedge their bets on urban districts and continue to support the charter school movement, particularly lead charter schools and other choice-based reforms that circumvent traditional district schools. 

Let me close there with the charter school movement and its place in the periphery of large, urban school districts.  The charter school movement can be a model for district reform.  It embodies the school level deregulation and leadership clarity for which I’ve argued.  And, predictably, over the last 15 years, a small subset of charter schools have taken full advantage of their operating freedom and simplified leadership to assemble and maintain magnificently cohesive, resourceful, and successful teaching faculties, and to deliver mesmerizing results with low income and minority students. 

Moreover, the charter school movement aspires to governance that focuses on monitoring schools and choosing among them.  So, at least on paper, the charter school movement exemplifies how to fund, govern and organize public schools.  In reality, the glaring and perfection of the movement is its inability to close struggling schools and reward the strong ones.  State charter laws, their political sponsors, and their authorizers, have taken the easy path.  Over the last 15 years, of the nearly 5,000 charter schools that have opened, approximately 11 percent have been closed, and only a small fraction of that 11 percent has been motivated by academic failure or mediocrity. 

The failure of the charter school movement to sanction its weak schools and to invest without reservation in its top tier is as serious as it is predictable.  In both the charter sector and inside of urban school districts, it is wise to deregulate schools and empower the leaders, but it is only half the work.  Equally important is creating a larger mechanism for managing the enormous variation in school level performance that naturally results from freeing schools of their regulatory paralysis and challenging them to perform.  That mechanism is as absent in the charter school movement as it is absent in large, urban districts. 

If the charter school movement could get serious and begin in earnest to police its failing in mediocre schools and reward without hesitation its top tier, then its quality would be on the mend.  The effect of this governance would probably dwarf all that we’ll talk about today about supporting and remediating charter schools.  The movement would then also fully illustrate the way forward for reform inside of urban districts.  It would exemplify for urban districts how to organize schools with few rules and clear leaders, and how to route resources among them, based on results.  Thank you. 

Frederick M. Hess:  Thank you, Stig.  Morgan?

Morgan Brown:  Thanks, Rick.  I find really very little to quibble with in Stig’s paper in terms of the vision that he paints for a decentralized, deregulated school districts with strong school autonomy, so I want to talk a little bit about what my perspective is from working in an office that is advertised as the quote/unquote entrepreneurial arm of the Department of Education.  Put aside the issue of whether entrepreneurship and federal bureaucracy belong in the same sentence, which is a decent question for someone to ask.  This tends to draw me toward the practical challenges that Stig focused on a lot at the end of his paper, and how they might be addressed, and what role the Federal Government might play in that. 

First, just my take on the two main options that Rick did an excellent job of laying out regarding trying to force systemic change that might lead to something like Stig’s vision of a charter district.  First, of course, there’s the top-down overhaul approach, and although we’ve seen some evidence of positive results in places like New York, Chicago and Philadelphia, my guess is that Stig would define a lot of those efforts as coming under the incrementalism definition that he talks about in his paper.  It also really remains to be seen, this hasn’t really been tested yet, about whether the progress that has been made in those districts is sustainable after the dynamic, political or education leaders that put those changes in place move on. 

Finally, we see the challenges of the top-down approach when we look at the efforts to restructure failing schools that have reached that level in the cascade of interventions and consequences that are No Child Left Behind.  In spite of a handful of success stories in places like San Diego, Chicago, Philadelphia, a recent JEO report pointed out that just 1 percent of all the schools that have reached that restructuring level have reopened as charter schools, which would be the most dramatic kind of restructuring or reconstitution potentially that would line up with what Stig has talked about. 

The second approach is something that I’ll call, more broadly, growing the open sector of public education, which I think has more promise for achieving some reform goals.  That’s my particular bias.  I want to reference here that I’m borrowing in this language a lot from my colleagues at an organization called Education Evolving, which is based in Minnesota, and you can find it on their website at educationevolving.org.  And two of them are actually here in the audience, one is Ted Kolderie, who some of you may know had a little something to do with why we have charter schools in this country, and the other one is Joe Graba.  They’re both here if you’d like to talk to them. 

First, I like this because it gets away from the approach of trying to get the schools we need or the schools we want simply by trying to change the schools we have.  And, in doing so, we create new and truly different school models that can potentially have an immediate impact on students whose learning styles are not well served by the traditional school district system. 

Second, it makes expanding school choice an integral part of the solution, which is not necessarily the case just because you create a decentralized, deregulatory school district.  Unless you’re very intentional about making choice part of it, it will not necessarily have the beneficial impacts.  And I reflect upon my former boss, Minnesota Governor, Tim Pawlenty, who made a visit several years ago to the Edmonton School District because of what he had heard about their strong site-based management system that may be perhaps the strongest example that we’re familiar with of that kind of approach.  But, it was interesting that when he got there, he heard from a lot of people that the resulting benefits or changes, such as they were in the District, were much more due to a very broad spectrum of choice there, including private schools that are part of the choice options there, more so even than the site-based management approach. 

I do think there’s some encouraging news on this front, acknowledging some of the things Stig pointed out about challenges for charter schools going forward.  The National Alliance of Public Charter Schools just released a report last week that said we now have 29 communities, many of substantial size, that are now serving at least 13 percent or more of public school students that are being served in charter schools.  So we have a number of communities and districts where charter schools are getting a fair amount of the market share.  And, of course, the question that follows up on that, which I think we may want to have some discussion about, is, what is the impact and how are school districts responding to that kind of external pressure?  And the woman to my left might have something to say about that when she gets up. 

So, the question is that we’re left with is, Are we doing enough at the federal level to support and facilitate entrepreneurship in education?  We basically have two tools, money and the bully pulpit, trying to change the conversation.  I think we’ve done quite a bit.  We obviously provide more funding to start up new charter schools than any other entity.  We have programs like Transitions to Teaching that funded the teacher project in part, which Michelle ran.  We have the Teacher Incentive Fund, which is trying to pilot and pay for performance programs.  We’ve done grants to organizations like Teach for America.  We have supplemental education services that engage a wide range of organizations and tutoring.  And, we have policy resources like our Innovations and Education Guides, which we recently released books on — Closing the Achievement Gap in Both Charter High Schools and K-8 Schools— to give examples of that and how they should be replicated. 

Moreover, the Secretary has made a number of proposals for reauthorization to strengthen the restructuring components and expand school choice in No Child Left Behind.  But, as many of you know, there’s a fair amount of opposition to that over on the Hill. 

So, the answer is, we’re doing more than any other previous administration, but we are not nearly doing enough.  And I’ll just offer two examples of areas where I don’t think we’ve figured out how to move to the next step.  One is in solving this issue of the pipeline of school leaders, and Jon Schnur is here, so he’ll answer all questions that you have regarding that.  The other one is how we move beyond looking at highly-qualified teachers to a more sophisticated discussion and definition about highly-effective teachers, a term the Secretary has used a lot, that will also allow us, I think, to accommodate that definition to a wider range of innovative schools that are focused more on outcomes than inputs.  Thanks very much. 

Frederick M. Hess:  Thank you, Morgan.  Michelle? 

Michelle Rhee:  Okay, I have a whole lot to say, so, I’m going to talk really fast.  You know, when the Mayor’s office originally approached me about taking this job, my first answer to them was, absolutely not, I have no interest in this whatsoever.  Because, after having run The New Teacher Project for ten years, and having worked with almost every large, urban district in the country, I thought, that is an impossible job, and the way that I’m going to have the most impact is to sort of agitate from the outside, and I think that was not a bad idea that I had back then.  [Laughter].  Now that I’m in this role, I mean, I think that I’m sort of in a fascinating place.  The last four months have been just the most, I’ll put it nicely, interesting four months that a person could possibly have, having had the experience that I did, and then coming into this. 

So I have a few thoughts.  First, in terms of the concept about total school deregulation, if you look at how we actually take a district, as is, to potentially more of a model around school leader autonomy.  I just think there’s a tremendous amount that you have to think about in terms of the process of how to get there and the timeframe over which we can get there.  I spent the first four weeks of September, basically the first four weeks of school, sitting down and meeting individually with every single principal in our district, and I actually have the luxury of doing that because we only have 156 principals. 

And so, day in and day out, I was meeting with every single principal in the district, and it was fascinating.  First of all, people told me that this had never been done before.  Half the people came in and said, I’ve been working here for 20 or 30 years, I’ve never sat down with the superintendent before, which I just found unbelievable.  And, secondly, I followed the same script every time, pretty much, when I met with people.  I’d say, first of all, I had all their data in front of me for the past ten years, and I’d ask them, How long have you been at the school?  And they’d say, seven years, so I’d mark it, and I’d look at the trend.  And then I said, What are you going to guarantee me, in terms of results for this year?  And I said, and before you answer that question, just imagine all the things that could happen.  We could have a flood at your school, and that means you’re going to have to relocate for three months, two of your best teachers are going to go, all of those things, just assume that they’re going to happen, and tell me, still, despite all of those things, what are you going to guarantee me as a leader of this school? 

People did not know what to do with themselves.  They had never been in a position where someone was actually sitting down with them and saying, what are the goals that we’re going to, at the end of the day, hold you accountable for?  And I actually have a very, very favorable principal contract where they serve at my pleasure.  And, so, I said, know that if you don’t meet these goals, you’re running the risk of not having a job the following year. 

Just that, in and of itself, and the fact that that concept, and the idea of sitting down with the superintendent to have this conversation, was so foreign, means that something is wrong in how we’re running these urban, public schools.  I’d say that from that experience, what I can tell you is that we have a massive leadership problem.  I sat in meetings where, literally, I had some people who, their proficiency rates are in the single digits right now, and I said, what are you going to guarantee me, and I had one woman say to me, 50 percentage point gains.  I was like, I should just fire you right now because that’s so stupid to say.  So, I mean, I have people who literally, they don’t understand sort of what it’s going to take. 

So, as I’m looking at my leadership core, we’re not talking about having to replace 10, 20, 30 percent of principals.  We’re talking about the majority of the principals who I do not think have the skills, the knowledge, or the wherewithal to actually do this job and to perform in a district that I’m going to run.  So what mechanisms are we going to use over time to make sure that that’s happening.  Because, the bottom line is that, if I gave principals the power right now to make their own decisions, I guarantee you they’d make the wrong ones.  So, I have a small percentage of people who, they have the results, and I’ve told those people, go, use whatever curriculum the way you want, you don’t have to come to any meetings, you do whatever you want.  My job is to get out of your way and make sure that the whole district bureaucracy is out of your way, and allow you to do your job.  But, for the rest of them, I can’t do that.  And part of the problem is that if we say, Over time that’s what we need to move to and we sort of say, Okay, we’re going to move to a completely deregulated system, give these principals the power, and the amount of time that it would take to actually sort of see, you’re going to have the public complaining because they don’t have a lot of patience.  And, so, I think that you would run into a circumstance very quickly where there’s a year of deregulation and then you don’t see master results, and people say, Okay, that doesn’t work.  So, I think we have to think carefully about the process by which we go through this. 

I think the charters play a huge role in this entire movement.  I think the charters are going to play a huge role in this city.  But right now, the charter school system is not operating the way that it should.  In an ideal world, the charter school system would be operating exactly how we want them to, which is the high-performers stay open, whereby get you more resources, and the low performers would close.  And then we could point to the charter school system as something that works.  But, right now in D.C., 30 percent of my kids are in charter schools, and the vast majority of those kids are not seeing any better results.  Now, we’ve got a couple superstars, which is great, and all those charter schools would say that they are successful because they’re not regulated.  So I’m good on that.  But, the bottom line is that the majority of them still are not producing results for kids, and we’re not shutting them down, and we’re not doing any better on that.  So we can’t look at the charter school system and say, That’s the model that we should be moving toward. 

Let me say a little bit about the Central Office, oh Lord.  For those of you who are from D.C., you may know this.  For those of you who are not, I just dropped some legislation in front of City Council that said that I wanted the authority to turn all Central Office employees into at-will employees.  And you would think right now that everyone does not know what to do with themselves.  Everywhere I go, I keep saying, You mean we want to hold people accountable for doing their jobs?  Is that that foreign a topic?  I’ll tell you this, though, it’s fascinating.  About four weeks into my tenure I started noticing that the people that I had brought in, and I brought a massive number of people in with me, were talking in a different way, and they were operating in a different way, and finally I brought them in the room together, and I was like, what are you guys doing?  Because they kept coming to me and saying, Well, I know you want to do this, but the rule says that.  And I said to them, Look, if you think that we are going to transform this district by simply being better bureaucrats, we better throw in the towel right now.  We are not going to work harder and follow the same rules and see significant results.  We’re just not. 

So we have to question every single rule that is in existence, and the ones that don’t make sense for kids, I am not going to follow, period.  I don’t care how much trouble we get in later.  And this goes to the contractual.  Early on, somebody came to me and we had a circumstance with a school where they had a teacher who had been there for eight years, got their administrator license, wanted to come into an assistant principal position that they had at the school.  I said, great, makes sense.  And the principal says, HR is telling us that we can’t do it.  So I call down to HR, and I’m like, What’s the problem?  They said, We have eight unassigned APs right now.  They’ve been exited from their building.  By the contract, we are not allowed to hire a new AP into the system until these excess people are placed.  And I said, Wo, we are not going to take this guy, who has relationships with the kids, who the administration feels great about, who already we know can be successful there.  We’re not going to put that person into the slot because we’re going to place some random person who can’t find a job into that position?  And they said, Yes.  I said, No.  So, put the guy in the position.  I hung up the phone, and 15 minutes later they call me back, and they’re like, You really can’t do this because you’re going to get in trouble.  And I said, I don’t care, they can grieve, whatever.  We’ll deal with that later.  This is the right thing to do for the kids.  And they were like, Here’s the other problem with doing this, Chancellor, if you let this school do it, all the other schools are going to call us and they’re going to want to do the same thing.  I’m like, They’re going to want to staff their positions with the people that they think are going to do the right thing for kids?  Great!  So word got around, we have to break the rules, that’s the very clear thing. 

Last thing, I think that there has to be just an incredible mindset shift in a city in order for all of this to work.  First of all, there’s a massive parental advocacy campaign that has to be undertaken.  Because even in a city like this, where there is a lot of choice, parents are still not making the choices for the right reasons, or the reasons that we would want them to in the end.  They’re choosing charter schools right now because the buildings look a little nicer, the customer service is a little better, which, is one thing.  But, the bottom line is, they’re still choosing to go to schools that are still not serving kids, and that are not ensuring that students are performing at the highest levels.  And then I have other parents who don’t want me to shut down schools.  And if you look at any of the data, you’d say, these parents should be begging me to close down this school because it is failing these kids, and it has been for years.  So, the parental advocacy has to be huge. 

The second thing, though, and this is what I’ve noticed with a lot of my colleagues across the country, we need to have a mindset shift amongst the leadership of urban, public schools.  I see all 100,000 school-age kids in this city as my kids, and my job is to make sure that every single one of those kids is in a school that is producing strong results for them.  I don’t care if it’s a charter school, if it’s a district school, if it’s a contract school.  If I try to control D.C.P.S. and protect my territory, that’s not looking out for the best interest of kids. 

So I said, in the long run, in five years, eight years, whatever, I want to have a portfolio of schools in this city that are producing the strongest results for kids.  And I’m not going to say right now that 20 percent or 30 percent or 50 percent should be charter schools.  All I’m going to say is, whatever is working, we’re going to replicate and grow and enable it, and whatever is not we’re going to shut it down.  But that process of shutting down those schools is going to require a significant effort by the public in terms of information about what these schools are doing and not doing for kids. 

Frederick M. Hess:  Michelle!  [Applause].  Elliot? 

Elliott Sainer:  Well, one of the things that is very nice about coming here this morning, other than being in southern California, is it’s nice to get out of the fires.  But, listening to Michelle really reinforces the fact I’m very glad I’ve been working in the private sector for all these years.  But, I thought Stig’s article or chapter, I’m not sure what you call it, was nice to read because I happen to agree with a lot of what he said, which obviously makes reading very easy.  I’m involved with a company that operates around 30 residential schools and programs around the country for under-achieving and struggling kids.  Mostly in the private sector, rather than the public sector, I can’t imagine how you can operate without some local leadership and authority. 

I try to imagine my business, and all the things I’ve done over my career, and it’s hard to imagine getting anything done, and I think hearing some of the things that Michelle has said, and just knowing from seeing what goes on out in the L.A. Unified School District sort of reinforces that.  I mean, can you imagine?  You read the paper in L.A., and you read that they’re still making mistakes a month and one-half after school has begun, in paying people properly and on-time in Los Angeles in the school district.  I mean, how can that possibly be?  How can you not pay people on time?  Yet, a company like UPS or Federal Express or UPS, I think, tracks on-time, real-time, about 15 million packages at any one time.  So, just think about that in terms of the private sector and the public sector.  So I think one of the issues is that the bar is set so low that making payroll will be seen as an achievement in L.A. Unified.  And I don’t mean to pick on L.A. Unified, but it’s really a pretty sad state. 

The second thing I think I agreed with Stig about was the hire and fire and compensation authority.  We’re all in the people business ,and you’ve got to have good people.  If you don’t have the right to hire those good people and retain those good people, it’s going to be very, very challenging. 

Stig mentioned in his article, he didn’t mention it this morning, the whole concept of best practices.  In my experience, best practices really should be a guideline, not a sort of requirement.  Obviously you can learn a lot from best practices, but, very often, best practices don’t work in every type of situation.  So, again, it goes back to the local control. 

I want to get a couple quick comments, and then I’ll finish about the role of entrepreneurship in education.  We focused on a niche, which is really under-achieving and struggling kids, and we got into that niche, really, because we said there was a problem.  And the problem was there were lots of kids who were ending up in psychiatric hospitals back in the late 1980s, and people didn’t know what to do with those kids, and there were no alternatives.  So really, there’s lots of those kinds of problems.  For those of you in the audience who are thinking about what can you do entrepreneurially, the first thing is just identify there are lots of problems, and really look at how you can try to solve them.

Secondly, and it goes back to the people issue, is you must create a superior leadership team.  That reinforces everything you heard earlier.  We struggle in the private sector, frankly, maybe not as much, but nearly as much, in finding good leadership.  It’s a key issue no matter where you’re working.  Build on your strengths, broaden some of your services.  One metric I like to use in looking in our schools and programs and other programs that we’ve acquired over the years is what I call the four P’s, which is people, product, potential, and predictability.  People is obvious.  We’re in the people business.  Product, in this case, obviously, is the curriculum, the school.  Potential, can you grow that business and continue to expand?  And, frankly, the hardest in the private sector is predictability.  We have lots of schools and programs that would do real well for a couple of years, and then there are leadership changes.  People get sick, people leave, things happen, and the real issue is, Can you maintain that kind of consistency over time.  I think that’s a real challenge for all of us. 

So, looking back at the issue about public schools, I think tweaking the system, in my opinion, is not going to make any kind of change.  And I really applaud some of the things you’re trying to do and some of the other urban school district people are trying to do, because you’ve got to make dramatic change because tweaking in the last 20-30 years really hasn’t done anything at all.  Thanks. 

Frederick M. Hess:  Thanks, Elliot.  Jon?

Jon Schnur:  So, one of the great things that Stig did is start with kind of his interpretation of the fact base, and then given those facts, ask what are the implications for reform.  So, let me share from my experience.  I’ve also had a very interesting last several years, having gone from a policy role to working to attract, support, and train good leaders working with nine school systems across the U.S. through New Leaders for New Schools.  80 percent of our people are in district schools.  20 percent are in charter schools.  It’s been incredibly interesting to learn through that lens about school systems across the country, the leadership pipeline. 

So a few facts that drive my thinking on this, from what I’ve seen.  First, it’s important to remind ourselves that our society and economy has changed so dramatically in the last several years.  People know this, but I think it’s worth remembering, and this is kind of a key fact, that our kids now have to reach much, much higher levels of knowledge and skill in order to succeed, in order for us to succeed, than ever before.  Several decades ago, we had an economy where most kids could, in fact, learn at a low level, and a few at a high level, and that was arguably enough to meet the needs of our industrial age.  That’s changed.  So we’ve got to make dramatic, dramatic changes, educating all kids, including poor kids, kids of color, to very high levels.  That’s essential for our success and for our kids’ success, and no one has done that at any scale in the U.S. or really anywhere globally in terms of educating poor kids at high levels.  We know it’s urgent, and it hasn’t been done on scale. 

The next fact to me is that it clearly is possible.  Our kids from low-income families, kids of color, kids who have been historically underserved educationally can, in fact, succeed.  They have the capacity to do it.  And that’s not just a hypothesis or a belief.  It’s actually part of the fact base.  We now have a small number of schools across the U.S. and elsewhere that actually are educating kids from very low-income backgrounds at high levels.  It hasn’t been done at scale, but it’s showing that kids are capable of achieving this, even though most of our society doesn’t believe that kids from low-income families, kids of color, kids who have historically been underserved can achieve.  Factually, it can be done. 

So the question to me, the biggest question, is, If that’s urgent, and it hasn’t been done at scale, but it has been done on a small scale, what must we do in order to close the gap and take this to scale?  That, to me, is the most pressing domestic challenge of our time. 

The last kind of fact base I’d mention is, looking at those schools at a small scale, that have actually gotten results, the question is, what’s happening in those schools, and what are the implications for what we could do to scale it?  And whatever you may think, ideologically, of charter schools or district schools, the fact is that most of the schools that we have seen that have made the most dramatic change in educating kids from low-income families are, in fact, not all, but most, charter schools, certain charter schools.  And, at the same time, there also are district schools that have made, within school systems, these kind of dramatic gains.  So it has happened in both cases.  On both sides, whatever your view about where we ought to go ideologically, the fact base is that most charter schools have failed to accomplish that, and most district schools have failed to accomplished that.  So I think there’s no emerging immediate sectoral change that is actually going to produce dramatic change at scale. 

So, in our own work, in leadership, it’s similar.  New Leaders for New Schools has got a lot of momentum and a lot of support from a lot of people in this room.  We have cities competing to our work.  The reality is, we had 7,000 people apply, we selected 440, about 7 percent, and now we look at our results so far. One of the things I think that we all can just be transparent about is that I think New Leaders is doing better than what else is out there, but we’re very, very far from where we need to be. 

Two-thirds of schools led by our principals are out-performing their district counterparts, but when you look at the kind of gains that actually are worth something in terms of changing the trajectory of kids’ lives, only 20 percent of our own leaders, and as an advocate of my own organization, have made those kinds of dramatic changes.  I’d say the implications are that we don’t yet have the pipeline of absolute superstars who can make this change by themselves.  We have a subset that can, and those people ought to be supported the way that Michelle is describing.  I think we’re going to rely on incredible management and organizational support at a systemic level, whether a school system under Michelle Rhee’s leadership, or others, or under a charter organization or other organization that’s actually providing the support, because I don’t think we have enough heroes to do the work.  We don’t have enough superheroes to do this without support from a well-managed institution. 

So, for me, my closing comment is that, the role of educational entrepreneurship, and I would add R&D, is at a stage in our society where we do not know.  I have a lot more humility about this than I had six or seven years ago.  We don’t know what it’s going to take to get this to scale, and that means we have to try some dramatic things in places, have really good research and evaluation, let people do things that opponents might be afraid to let them try, and evaluate it and see the implications.  But I think the role of entrepreneurship and R&D is to try out some dramatic ways of getting things at scale, and success at scale, including in D.C. But then wait.  I say as frustrating as it may be, wait several years to say one kind of dramatic policy solution is going to change the country.  We don’t have the answers yet, I don’t think we have the human capacity to do it, which is why the efforts like Michelle’s in D.C. are so important. 

Frederick M. Hess:  Thanks, Jon.  Well, we’ve got a bunch of ideas on the table here that I want to give you all a chance to respond to, but, Stig, maybe, let’s open this up.  Jon made the point that somebody might read your piece, and say, Well, wait a minute, it’s interesting in theory, but when I look across the country I see high performing schools in districts, as Jon suggested, and high performing schools in the charter sector, so doesn’t that give lie to your notion that the key precondition for success at scale is going to be deregulation?  Might it not be that what we need to do is learn from what we’re doing effectively, and these district schools are doing it well, and do more of that to make sure that these districts succeed? 

Stig Leschly:  No.  If you look closely at I think the 200 charter schools that really close the achievement gap, 200 of the 5,000, and you get up close to them and see what’s happening, I think you’ll discover generic team dynamics in them.  You will observe incredibly cohesive, problem-solving, professional teams at work underneath their apparent observable design in the choices they make. 

I think inside of districts, where you find occasionally the breakout schools, what has happened informally is exactly the same thing.  Usually in one way or another, one of Jon’s leaders or one of Michelle’s leaders, has managed, despite the overhang, to assemble 20 adults who believe in the same things, who want to fight hard for them, and who can learn over time.  So, that doesn’t mean that these leaders are easy to find, nor does it answer the question about how to sequence change in a place like D.C.  I will just say this about these shortages of human capital, these shortages of teachers and principals.  They are enormous, and, they would be aggravated by deregulating and decentralizing control in school districts, but I think it would actually get us to the right problem, and I don’t think we yet know, empirically, what kind of stimulus on the supplies and qualities of teachers reform work environments would have in districts.  I can’t think of a fundamental reason why the labor markets in public schools dysfunction fundamentally because, at base, leading schools and successfully teaching in schools are magnificent jobs. 

So the shortage and the distortions in the labor markets have to be because of the organizational formats of districts.  I think you can explain many of them in the charter sector as well by the incapacity of the movement to police bad schools and to create turnover among them.  So, we just need to get to that problem, and I happen to be optimistic when I hear statistics that Jon has 6,000 principals he didn’t hire and Wendy Kopp has 45 trillion 23 year olds that she didn’t hire.  I think there is some evidence that there is deep, deep supply of the people who can do this work, but we can’t attract them and keep them, given the regulatory and leadership contests in these places. 

Frederick M. Hess:  Michelle, obviously, in your previous role, you dealt a lot with these issues, both from the point of your TNTP role, and then from being inside D.C.  Where are the choke points in terms of finding and keeping these people that you’re looking for to lead these schools and structure these teams? 

Michelle Rhee:  I agree with Stig that my worry right now is not finding people who want to sort of join us.  We have, across the district, about 4,500 teachers, like I said before, 156 principals.  Actually trying to find great talent is one of the things that we have to be focused on, but it’s not something that worries me tremendously because I think that, if we set up the right environment, we’re going to get good people interested.  It’s about setting up the right environment, though.  As I was coming in to this position, I was facing a situation where I had 20 principal vacancies, and I looked at the pool and it was just awful.  So, I decided that I wasn’t going to hire any of these principals as permanent principals, I was going to hire them all as interims.  And I was going to tell them that, in the January/February timeframe, we were going to be holding interviews for those positions and they were welcome to throw their hat in the ring, but they weren’t guaranteed anything.  And, I think that, as I look at why we were losing so many of those principals, we had a fair number of them who were moving to charter schools, and it’s not rocket science to figure out why. 

The other thing that I did early on in my first week was meet with a group of, what people told me was the group of principals to meet with, the people who have been here for years, who have seen results.  And, 2-1, what they were saying was that they were extraordinarily frustrated with how the district operated, that they were successful despite the system, and, to Stig’s earlier point, I think that if you look at the high-performing schools within the district, they often not just succeed despite the rules, they break the rules.  They don’t follow them, or they find ways around them.  That’s how they’re successful. 

So, it can be done within a system, but only in these pockets.  You can’t, the bottom line is, have a system full of principals who are not following the rules.  You’ve got a small number of them who can, who have figured out how to not follow the rules and get away with it, and then all the excess people get tossed on to the schools who don’t know how to work the system.  But, if you actually had a group of people who were all trying to do that, it wouldn’t work. 

So, setting the conditions in the right way to attract and retain better people is the right thing, and I think that right now we don’t have a system that is set up for high-performers wanting to come in, or to stay in.  Because the bottom line is, if you look at high-achievers in any sector across this country, you want people who want to come into a job that they think is selective, that not anybody off the street could have gotten.  And then when they are out-performing their peers, they want to be recognized and rewarded for that.  They want to know that there’s a trajectory for them.  That is the exact opposite of what we have in public education today. 

Frederick M. Hess:  Jon, you probably want to speak to this generally.  And also I’d like to ask, You’re in a number of districts across the country wrestling with these issues.  Is there anything you’ve seen that’s particularly promising that folks should be aware of, or are there any districts that have settled on something which seems to make sense in terms of some of these challenges? 

Jon Schnur:  Well, a couple more facts on some things that I’ve seen in both districts and charter school.  We have schools.  We have New Leaders lead schools.  We had the most-improved school in Chicago last year, the most-improved school in Sacramento, and one of the top three in D.C.  We had others who were not as strong in all those cities.  When we look at what’s happening in those schools, or lots of non-New Leaders schools, you’ve got a superstar leader who’s got certain kinds of knowledge and skill and beliefs that we could talk about if we had time.  But includes high expectations for all students, a sense of urgency, and a willingness for adults to be accountable for student achievement.  That includes being a strong manager and leader and getting teaching and learning.  And, it also, in every case, including in the districts, has had some way of doing things that the district didn’t allow. 

In Baltimore we had a school that was led by a new leader under alternative governance where he had the chance to restaff the school.  Interestingly, in that case, he then chose to keep 70 percent of the teachers and didn’t keep 30 percent.  Now, this is one of the lowest performing schools in Baltimore, and I think it speaks to a couple of things.  There actually are a lot of teachers who, with the right leaders from the management, actually came in for the right reasons, can succeed, are people who do have the hunger to learn, though not necessarily the skills.  And, there’s a subset of teachers who aren’t.  But, for those people who think most teachers are just not capable of doing this work, most are with the right leaders from management.  And, at the same time, there’s a real problem that there’s a significant subset of teachers who, even if they’ve got the skills at this point, don’t have the kind of attitude and the willingness to coach and to learn that will allow them to be successful in closing the achievement gap. 

So some autonomy is crucial, but it may not be exactly what people on either side might think is needed.  And, in every case where there’s been success, there’s been some kind of outside support in management, whether from a charter school organization or pockets of a school system, where they’ve been getting some coaching and management from outside their schools.  But we don’t have enough people, in my view, who can do this at scale without a really well built set of institutions, whether in the district side, or the charter school, to help lead in managed schools.  So I guess I’d become more skeptical in the short-term of the idea of giving every school total autonomy.  But, I do believe that where you have the superstars, give them autonomy, and where you’ve got systems with great leaders in management and a compelling plan, invest deeply in those places, whether district systems or charter systems, to help them succeed, and point the way for how the rest of the country can learn from them. 

Frederick M. Hess:  Yes, looking at it from a little different perspective, I think one issue is whether you can find good leaders, but I think another real problem that urban public schools have is the timeline issue – that chancellors don’t stick around forever, people constantly change, and, even if you put in those kinds of systems and plans, you have a new leader come in and then they have their own ideas, and I’m sure you go through that right now with your own district.  I like what Jon said about doing it incrementally, where you pick a handful of schools and really let go and let loose and let that fester a little bit.  I think that may be a better solution because you just don’t have enough time in our political system to really make dramatic changes before everybody changes at the top. 

Elliott, let me ask you about a specific application that’s in your context.  It seems to me one of the challenges for the chancellor or for Joe Kline or Ernie Duncan or anybody else is that they’re being expected to improve a range of schools serving a massive range of students, and they’re expected to show steady progress across the board for all these populations.  It seems to me one of the advantages of what you did at Aspen, for instance, is that you all were in a position where you could say, Look, this is our clientele, it’s narrowly defined, we have some pretty specific expertise, and rather than being expected to come up with answers for each and every population, you were in a position where you could demonstrate success by serving one very particularly described population with a very particularly drawn set of metrics.  Is that fair?  Is it an accurate characterization?  And, if so, how does that help us think about the challenge for folks trying to run larger districts or think about charters as a system? 

Elliott Sainer:  Well that’s fair, but, keep in mind that even in our own little world, where we’re very narrowly focused.  We have lots of the same challenges about finding good leadership.  So, I can just imagine the sleepless nights that some of the school district superintendents and chancellors have because we can create our own culture.  We do let our local school directors around the country really have a lot of autonomy and authority to run their programs.  And, despite that, you have problems just finding enough good people.  The other problem you have with a lot of strong decentralizations is that sometimes you give people too much rope, and they hang themselves.  I don’t mean that literally.  So, on balance, I think the decentralization has been a real strength of our company and of our culture.  On the other hand, you have to be careful, as you’re going to expect some problems because of that, and you just have to learn to live with it. 

Michelle Rhee:  I think one thing that I’m realizing is that we have to very clearly define what the role of the central office is and then very clearly define what we want the role of school leaders or principals to be because I would actually differ with Stig on this.  I don’t think that the role of the central office should be to regulate either, but I also don’t necessarily think that govern is the right word.  I think that what I’m trying to do right now at the central office within D.C.P.S. is to say, We don’t run schools, we serve schools.  We have a role as a central office to give schools what they need so that you can get teachers paid on time, so the textbooks can get there, so that they can procure all their supplies that they need in a timely manner, and so that we are not standing in the way of schools being able to do their job, but we’re actually facilitating that.  And I think if you talk to any of the great charter operators out there, what they’d say is, to be able to do that at scale, is something that you actually have to have a central entity helping with to make sure that you’re as cost-efficient as possible. 

So, I think it’s about the central office serving schools, and then also there’s, obviously, this accountability.  Once you serve them, and you give them what they need, you’ve got to hold them accountable for producing the results. 

Morgan Brown:  I want to follow-up on one point Michelle made earlier, which I just think is really important, and we easily lose sight of in talking about how we’re going to restructure or change these systems.  It’s this issue of parental involvement and parental engagement.  We obviously realize that we still have many, many parents who are making a school choice because they are running away from something, not because they are choosing to make a positive, affirmative choice for a different school, and I’m not in any way second-guessing that or judging that.  If I was, had my child been in an unsafe school or I found a school that had a more welcoming environment for whatever reason, even if the academics were not at an incredibly high standard, I could see myself choosing that school as well. 

And this relates to another important issue, which is, we need to change the way, and I think this is one area where charters maybe have had an advantage, that districts talk to parents about parent engagement.  I visited a school that was featured in our recent book on K-8 Charter Schools Closing the Achievement Gap.  It’s Pan American Elementary School in Phoenix, a very little, literally, a mom and pop school that’s doing amazing things helping English language learners be proficient in reading.  They had changed the whole model of parent involvement.  Instead of saying to parents, come in and volunteer and do this and do that, the leaders said, You know what, we don’t want you coming in and volunteering at the school and picking up this duty.  That’s our job.  What we want to do is teach you how to be a constant advocate for your child in this school, or wherever you may go in the future.  And, so, they actually set up a parent university to help student parents understand how to do that.  They made parents real advocates for their students and helped them understand how to look at academic performance of schools rather than just saying, Hey, please come in and volunteer in the school on an after-school basis, and it’s changed the way that whole community interacts for the betterment of those kids. 

Frederick M. Hess:  Why don’t we go ahead and open this up.  You’ll see Juliet right here, and Rosemary over here.  Please catch their eye.  Please do us a favor of just identifying yourself by name and affiliation so folks know who is asking the question.  And, as always, I will make the request that people please actually ask questions rather than engage in that time-honored D.C. habit of making speeches from the floor, followed by a tilt in the voice.  [Laughter].  And, what I will do is, because we’re mean guys.  If I don’t see a question coming anywhere in the foreseeable future, I will ask you to please ask the question.  So, let’s spare us all the moment of unpleasantness. 

Jim Kohlmoos:  I’m Jim Kohlmoos from Knowledge Alliance and I really appreciate all your comments.  I particularly appreciated what Jon Schnur was saying about the importance of R&D when it comes to entrepreneurship and providing new information, new data, and new knowledge about what’s next in innovation.  Can you describe a little bit more, Jon, about what you were referring to as a system of R&D that feeds into your entrepreneurial decision-making? 

Jon Schnur:  Yes, just briefly, I was describing what I think is important for the sector, nationally, and I can briefly tell you what we’re doing in New Leaders.  In the sector nationally I just think that to achieve the kind of success we need in education, in my view, it’s going to take 25 years.  When you set big, big goals, like energy independence or looking at things like the first phase of the civil rights movement, these things take time.  So, in my view, this is going to take a couple of decades to do.  And, so, one of the key questions right now, is, where you have the right leaders for management, the right ingredients for success at scale as a sector, we ought to be investing in both supporting them, and I would say a place like D.C.P.S. under Michelle’s leadership is a great example of that, and figuring out how do you support those efforts at scale, along with investment in serious research and evaluation to look at both the results in places like those, but also what’s been learned. 

One, quick story on Milwaukee, my hometown.  People know the voucher debate there.  One of the things that I thought was the most disturbing early on about Milwaukee is that the supporters and the opponents of vouchers in Milwaukee when it was started agreed on one thing, which is, they stripped funding from the state level for any independent evaluation of what happened in vouchers in Milwaukee.  This, I think, is an indication to me that there was kind of an unwillingness for us to embrace, okay, really, what are the results.  I think the results are very mixed in Milwaukee.  It doesn’t mean I don’t think we need dramatically more autonomy in places, but I think it’s important to create research and evaluation. 

At New Leaders, we wanted to create a research base on the principalship, so we’re partnering with RAND to look at achievement results in our schools, characteristics of our principals upon selection, skills as they develop, and, over time, we’re going to look, with RAND’s help, to correlate what seem to be the characteristics and skills and conditions in the school system that most correlate with achievement gains in the principalship so that, seven years from now, we think we can help produce more of a research-base on really what constitutes an effective principal. 

Michelle Rhee:  Can I make a quick comment on that? 

Frederick M. Hess:  Yes, please. 

Michelle Rhee:  I think that we have become, in the education reform sector, a little bit skewed in terms of R&D and innovation.  I think that, particularly, the role of funders within this innovation has, I don’t know where it’s gone, frankly, because, in my mind, the role of external philanthropy in this arena sounds like a good idea, and there are no guarantees.  It might not work, but it seems like a sound idea, just funding those kinds of things.  Right now, in education reform, the philanthropic world only wants to fund things where you have guaranteed results. 

Well, if we had guaranteed results, we could find funding from the government and every other place.  That’s not the role of philanthropy.  We’ve gotten to this place where we have, people who used to be venture capitalists, and venture philanthropists, and all that sort of stuff, but they’re not operating the same way that they would in the business world, which is, you believe in an entrepreneur and then you fund them.  And now it’s just, Only if you meet these certain metrics in this particular box then we’ll fund you to go to scale.  And that, I don’t think, is anything close to what we need in terms of philanthropy in this realm.  So I just think that’s important as we talk about the sort of R&D and innovation we’re going to put into this. 

Frederick M. Hess:  Elliott, did you want to jump in on that? 

Elliott Sainer:  Yes, sure.  I don’t mean to sound anti-intellectual, because I’m genuinely not, but there’s a class of this R&D syndrome that I think is worrisome, and it’s not the one Jon described at all.  It’s the one that has to do with endless studies of instructional improvement and curriculum redesign and best practice modifications in schools.  There are subtle complicated problems on the margin about better forms of pedagogy, better curriculum, better programming, and better school design. 

But the glaring gap in urban districts is power, not ideas.  It’s what people like Michelle need, in my opinion.  It’s not new intellectual property about some next subtle piece of pedagogy or design in schools.  What she needs is the power to address the 80 percent of the problem that is completely obvious and generic and which has to do with the deterioration of morale and attitude and continuous improvement and so on in schools.  What happens a lot in the pathology of district reform is that, because the hard questions can’t get asked, you get an endless cycle of this incrementalism, which is often shrouded in research and design.  And, so just be leery of it.  You can’t inject new ideas and new practices into diseased organizations and expect anything to happen.  It just happens to be the only option, generally speaking, in most urban districts. 

Frederick M. Hess:  Rosemary, we have somebody? 

Horace Robertson [ph.]:  I’m Horace Robertson with the Consortium of Entrepreneurship Education.  I come from a perspective, living in White County, North Caroline, where we have the fourth fastest growing school system in the nation, and we have the largest trucking companies in the nation there, but the largest transportation fleet is the White County schools.  So I guess as I think about the leadership that you need, my question for Michelle and Jon is, What do you perceive needs to be done in order to deliver those leaders that are needed to lead public schools, lead schools effectively? 

Michelle Rhee:  So, again, this goes back to my earlier point.  I think we need to really define what we fundamentally want leaders to do.  Right now, if you look at how my principals are spending their time, they’re spending their time on the things that I would never want them to spend time.  The toilet is leaking, and so they have to call 12 different people to try to come out to get the toilet fixed, and that sort of thing.  It makes no sense because they’re spending the bulk of their time on sort of the operational pieces as opposed to being in the classrooms with teachers driving quality instruction. 

And, so, the way that the district has operated to date has necessitated school leaders to have this breath of expertise and knowledge because they’ve had to sort of fend for themselves.  I think that we have to think about whether that’s really sort of what we want them to do or not.  And if it is that we need people to sort of be those instructional leaders but to also be able to come in, create a vision, and then drive all of the adults in that school towards that vision, we’re going to need a significantly different leadership pipeline than what we have right now.  If you look at how D.C.P.S. in the past has brought people into the principalship it’s, you go to the APs.  And, how do you get an AP job, if you have good classroom management and you can control a cafeteria, then you’re a good candidate for the assistant principal position.  That’s not the criteria by which we should be choosing our next generation of school leaders. 

Jon Schnur:  Ten years from now, once we have much more highly functioning systems, I think you may.  We’ll have school systems that do more what good companies do, which is identify talent at the early stage, develop people, and groom them. You may always have a quarter or a third coming from the outside, but a lot come from inside, but through a merit-based approach over time and with people taking on increasing levels of leadership responsibility. 

The challenge we face, in my view, is that most of our school systems, all of our school systems, that we’re talking about, have this dramatic gap to close and do not, right now, have the practices that they need to succeed.  That’s not because they’re much worse than they were 10 or 20 years ago.  It’s just that they haven’t actually changed themselves to adapt to the challenges of our time. 

The tough question for us, I think, in this period of change, is, How do you create this leadership pipeline as an engine for driving these highly-functional systems?  And, a few quick things.  One is I think what Michelle said, and actually one of the most important points that I found in Stig’s presentation, is getting total clarity on leadership roles and alignment on that.  Right now, the evidence suggests that the right leaders do the kind of things that Michelle is saying, yet everything in our school systems mitigates against that.  So there isn’t this relentless, systematic approach in the school systems that we want you to be responsible for achievement, to drive teaching and learning, and to support teachers to get that done.  So I think getting that clear in school systems is first.  Identifying talent early on and grooming them is second, giving people training based on what we’ve learned.  And, ultimately, creating more of a merit-based, learning-based community of leaders in a school system I think will help retain people. 

Frederick M. Hess:  Happily, the next panel also is going to delve into these human capital questions and talk about more questions of these.  Juliet, we have somebody? 

Piper Davis:  Hi, I’m Piper Davis from the SEED Foundation, and I wanted to ask about something that’s come up a couple different times as far as we have this group of exceptional leaders, maybe the top 20 percent, who are very strong school leaders but need systems and structures in place to help them really succeed and drive their schools to excellence.  Michelle and Jon, but, anyone, I suppose, in general, what specifically are those structures and systems at the school level and at the district level, and over what time period can we realistically implement them in a big way? 

Michelle Rhee:  So I think from our vantage point, it’s a lot of the operational pieces.  I mean, if I think back to The New Teacher Project and running that, and why site-by-site our site managers were successful, it was because, frankly, each one of them did not have to worry about getting all of their staff on payroll and making sure that it was processed, and they had an HR department that was running the sort of recruitment efforts for their staff and the knowledge management.  All of those things happen centrally at TNTP so that the cite managers could be relentlessly focused on, I’ve got to bring in 200 teachers into this program, they need to be of this quality.  So we were able to ensure that they had focus.  So if I look right now at our school leaders and what in an ideal world we would do to make sure we had great services around, versus the facilities issues.  That takes an inordinate amount of principals’ time right now. 

The issues around procurement are another one.  They can’t efficiently access their budgets so that they can buy the things that they need to buy.  And then the third is around human capital.  I think that the principals have to have the authority to build the staff that they think is going to effectively move the school forward, but there’s a lot that could be done on the front-end in terms of building the pool of people so that principals have ready access to high-quality candidates, and that once the candidates are chosen, the logistics around getting those people on payroll, making sure that their benefits are taken care of, step increases.  All of those things are taken care of centrally. 

Frederick M. Hess:  Elliott, do you want to share on this.  You’re obviously in a very different context? 

Elliott Sainer:  It’s the same challenge.  I mean, really, it’s really not too much different.  I think Michelle’s comment earlier about the role of the corporate office resonated with me, because in our corporate office, I tell people out in the schools and programs, our customers are the local schools, and that’s who, really, we’re focused on.  We are there to support them, not really to direct things.  I think that our school people don’t have to deal with the issues of facility management.  I mean, they deal with it, but it’s not a major part of their day because we do have other staff who can pick that up.  And, so, it goes back to the whole issue, I said at the very beginning, that you’ve got to have a focus.  And if you can get your people sort of focused on two or three main goals and the rest of the stuff sort of takes care of itself, I think you’ll end up with, hopefully, better quality people. 

Checker Finn:  Checker Finn, Fordham Foundation.  At least two of you talked fairly directly about closing down badly performing schools.  Stig did, Michelle did, maybe somebody else did.  I’d like you to talk a little bit more about this.  It’s one thing to close down a diner with cockroaches, or a gas station with leaking tanks.  There are lots of other diners and gas stations one can go to.  A school with 475 kids in it, to close it down is a sort of momentous responsibility.  We’ve known for a long time how hard that is to do in district schools.  It’s turning out also to be just about as challenging in the charter sector, both for political reasons, but also for what you might call humanitarian reasons and supply reasons.  The political reasons are obvious, the humanitarian reasons are obvious, the supply reasons are there may not be anywhere else, or anywhere else better, or anywhere else with space in it, for those 475 kids to go.  Talk a little bit more about how realistic is it to follow your recommendation to close down badly performing schools. 

Michelle Rhee:  I think I’m in a great position right now to start closing down schools because we are so under-enrolled as a district.  We have the facilities, so now is the time.  The master facility plan that was created by my predecessor called for closing 18 schools over three years, something like that.  I’m going to close down more, and I’m going to do it all right now, and I’m going to do it on the right timeframe, so that we’re announcing the closures now, or in the January timeframe for the following school year, so that we can figure out all the staffing issues, and then it’ll happen again.

Right now we’re looking at closing down schools mostly for enrollment issues, but, in the future, it’ll be for performance, and those two things are obviously linked.  But I feel like this comes down to the parental advocacy piece.  If you’ve tried to close down schools anywhere, you know that people hate when you close down their schools.  But, and this is one of the stories I tell over and over, I went to a community in Anacostia where we’re about to close down this school.  We should have closed it down, but they didn’t make the decision, all that sort of stuff.  I went to go tour this school, and I got there early and walked across the street to a housing project where there was a group of men sitting out there.  It was the middle of the day, so I said to them, so what do you think about this school?  They said, this school is great.  We love this school.  The teachers are great.  They work so hard.  The principal has been here for 30 some years.  Don’t close down the school, Chancellor.  And I’m thinking to myself, this is not a great school.  Nine percent of the kids at this school are at proficiency or above.  There’s a KIPP school that’s six blocks away where 80 percent of the kids are proficient or above.  This is not a great school. 

But we are not doing our job in taking the data to the people to say, 9 percent of your kids.  And if your kids are not operating on grade level by the time they’re in the 3rd grade, the chances that they ever will are slim to none, and this it how it impacts their life chances and their life outcomes and their earning potential and their ability to take care of you when you get older.  We have to be out there talking to parents about those hard facts about how we are not serving their kids well, and we have to frame it in how this is going to better serve kids.  Because right now with the facility issues, my staff told me that the facilities department used to lead the community discussions about closing down schools.  That is the most insane thing I’ve ever heard in my entire life.  How are you going to send some facilities people out into the community to talk about why we’re closing schools?  This is a fundamental issue about giving kids a school program that is going to produce.  That has to be me.  It has to be instructional people, academic people, talking about what we need to see in schools.

But I think if we do the right advocacy pieces, I truly believe that we can create an environment where parents are empowered, where they’re informed with the right data, and where they are beginning to demand the change, because we are not going to see a wholesale transformation in this community unless the people who are suffering the most from the fact that these schools are not performing are actually demanding the change. 

Frederick M. Hess:  Morgan, yes, please speak to this.  And, particularly, you alluded to the GAO report, of course, previously, which indicates that very few schools are being dealt with in any severe fashion.  Even year 5 or 6 or 7 under NCLP, is the Department playing the leadership role as effectively as it could in terms of informing public opinion of the way Michelle is discussing? 

Morgan Brown:  Right, I mean, the thing that was discouraged about the GAO report is that the real options for restructuring, like reopening as charter schools, actually had a lower percentage of schools choosing it, than something that isn’t even in the law, which is doing nothing when you get to the phase of restructuring.  And so this is one of the reasons the Secretary is proposing really tightening up that piece and making clear that we’re talking about serious reconstitution and not another year of kind of corrective action. 

But I think the reason restructuring is so difficult is, one, lack of political will, two, sometimes where political will exists, the knowledge resources don’t exist.  You could have even a superintendent, let alone a principal, that really does want to reconstitute a school, but has never been trained, has no experience or training for doing this.  So that’s another area where we have to try to address.  And then this third is so important, on the parent engagement piece.  And the encouraging thing is there are some examples out there of how to deal with this.  There are a couple different models.  One is the Chicago approach where you’re simultaneously, and this takes a degree of sophistication, and Chicago had to learn this the hard way, but where you’re simultaneously opening schools as you’re closing others.  So it’s not, Hey, we closed your school, this building is going to sit vacant, you’ve got to find someplace else to go, it’s, We’re closing this school, but we are either reopening it as a better school, or, Here are other range of options we’re opening to accommodate your children. 

The other thing is that we’ve got to start looking at restructuring as not something we got to do and get by the parents without them creating too much of a fuss, but as an opportunity for parent engagement.  The best example of this may be Gompers Middle School in San Diego where they engaged the parents and the community in the whole process of restructuring.  And when you listen to those parents talk about how positive they feel about that school now, it’s because they’re the ones that had a stake in doing it all the way along.  So we’ve got to figure out ways to replicate that model of restructure. 

Jon Schnur:  The good news on this is there are examples of places that have begun to do this, but there are a tiny number of examples, which is the bad news.  But, in Chicago, we’ve experienced the one where the most improved school in Chicago last year was, in fact, a school that was closed by the way Morgan is describing and is now reopened.  The proficiency rates have more than doubled in the last three years.  It’s not where it needs to be yet, but it’s improved.  I would say the notion of, the language even of closing and reopening I think is really important, because when parents hear closing, they’re like, Well, why are you going to deprive my children of an education.  The point is, actually, No, we’re actually going to provide a better education than you’ve been getting, is really important. 

And then the leadership, I’ll tell you again.  Ten years from now, we need to be in a position where we’ve got enough leadership to do this at scale for the thousands of schools around the country.  I wish we had it right now.  I think the hard reality to deal with is that I don’t think we have the capacity as a country to turn around the thousands of schools that need to be, and I think we have to make sure we are in some of the next several years.  It’s a very hard question what you do in the short-term, but it can be done at least on a small scale, particularly in places like D.C. with the right leadership and concentration of talent. 

Elliott Sainer:  Rick, let me put in just a real quick plug for those of you that are more interested in this topic.  The National Association of Charter School Authorizers put together a fantastic set of guides called Starting Fresh, which are probably the most practical guides I’ve seen for school district leaders and officials about how you do this with the community engagement piece, with teachers, etcetera, and you can find them at their website. 

Frederick M. Hess:  All right, Jul, I think we have time for one more quick question. 

Martin Apple:  My name is Martin Apple.  I’m the President of the Council of Scientific Society Presidents.  My question is, If you were to restructure and change teacher education so that the graduates were what you wanted for those visions that you’ve just proposed, what would be significantly different? And if those teachers are now graduating from those institutions and people in the schools you’re creating, what would they demand of you as leaders? 

Frederick M. Hess:  Stig, I’m going to give you the last word on this, and, partly, again, this leads us very nicely into the next session, I’d just take a quick thought at it, and we’ll come back to it. 

Stig Leschly:  Right.  The best graduate schools for teachers that I know of are magnificent schools themselves.  And, I think there can be, shortly, in the next five years, let’s say, fully alternative graduate schools of education that recruit, train, place, and also certify and give masters degrees to a new crop of teachers and that are based in residencies in magnificent charter schools, and, plausibly, in breakout inner-city schools as well.  What they then would learn in those places, I think, would be this layer of excellent practices that arise in schools th