Gaming the system: Is there any difference between the corporate and education worlds?

A study recently appeared in the Harvard Business Review, looking at the impact of leaders brought in to turnaround ‘failing’ schools, in England. It made quite a splash in educational circles, and the BBC ran an extended feature on the Newsnight programme.

As someone who works in learning, in both education and the workplace, the connections to the corporate world were immediately striking, and I’m slightly surprised that so few people have picked up on this.

I’d strongly recommend you read the full report. Its authors (Alex Hill, and Ben Laker) researched a range of leadership styles and strategies adopted and then compared short-term and long-term effects. They essentially categorised turnaround leaders as either Surgeons, Soldiers, Accountants, Philosophers and Architects. Schools Week magazine produced a helpful summary (reproduced below) of their belief systems:

Lack of space prevents an analysis of all five, so let’s look at the two that have garnered the most attention: the surgeons and the architects.

Surgeons cut and redirect, and focus almost exclusively on raising test scores. As the authors, reported, “They believe schools fail because students are not performing and, if they remove the poor performers and make the rest work harder, then performance will improve. “We can’t help everyone”, one Surgeon explained.” Surgeons will fire around 10% of their staff, and exclude an average of 28% of the exam-taking cohorts, in order to produce a short-term boost in exam results.

Architects have a different plan. They re-design and transform, focusing on long-term impact. They believe a school and its local community’s fate are intertwined, so work hard at building a sense of involvement. They gradually weed-out poorly performing staff, and exclude around 1% of students, usually on behavioural grounds.

Impact

Surgeons achieve an immediate boost in exam results, averaging close to 10% improvement during the first couple of years of their tenure — Architects produce a 3–4% rise. Because of the very high rate of expulsions, surgeons face a significant drop in income, while architects gain popularity locally, and see a steady rise in income.

The picture changes dramatically, however, when the leaders move on. The surgeon’s school sees test scores plummet, and take at least 2–3 year to achieve stability again — though not regaining the scores seen during the ‘slash and burn’ years. A similar story happens on their budget surplus as they slowly recover their student numbers (in the UK the money follows the students).

Unsurprisingly, the architects saw a steady , but continuous improvement in results, consistently out-performing the surgeons schools — even after the leaders have left. And they have successfully grown the business, staff numbers and student incomes are the highest of all five groups. As a raw figure, in architect schools there are twice as many graduating students leaving with good exam results,, compared to surgeon’s.

So, given these impacts, which of the two receives the greater pay and public recognition? That’s right, the surgeons. 63% of surgeon-leaders received a government award (including knighthoods), compared with 13% of architects) and surgeons salaries were, on average, £154,000, compared with £86,000 for architect-leaders, even though they run much bigger businesses.

A Parallel Universe?

None of this will come as a surprise to people on Wall St and in the City. Substitute exam results with share price; salaries and awards with bonuses and stock option; exclusion of students with offshoring and job cuts, and the two scenarios are identical.

There’s also a very similar debate happening across the two sectors on the purpose of their businesses. Many are questioning the purpose of schooling: is it to turn out expert test-takers, or to prepare students to be effective citizens in a globalised world? Similarly, an article in Business Insider questioned the role of businesses today: do they exist to provide short-term returns to shareholders or are they there to provide jobs, grow the nation’s economy and be socially responsible? And what kind of a society are we tolerating that valorises the surgeon CEOs — who manipulate the market, asset strip and decimate the workforce — in both sectors while ignoring the architects? And what lies beneath this twisted set of priorities?

My own take is that in both sectors we’re seeing the terminal decline of neoliberalism. When Milton Friedman wrote in the 1970s that “a corporation’s only “social responsibility of business … [is] to increase its profits” for shareholders who “own” the corporation.” he legitimised greed and encouraged respectable bankers to become wolves of Wall St.

The Business Insider piece concluded with a rallying cry: it doesn’t have to be this way, steps can be taken to ensure that business regains a sense of moral purpose, and ends the blight of short term-ism:

“We can make sure that companies don’t pay out shareholders before they fill their pension coffers to ensure employees who’ve served them have retirement funds. We can lower the number of shares companies can repurchase at a time. We can limit the amount of debt companies can use to pay back shareholders.”

To which one might add, “And we can end our fixation with PISA global rankings and short-term test scores so that school leaders are judged on the long-term impact of their schools instead of how well they game the system.”

But with banks seemingly acting again with impunity, only 8 years after the last catastrophic market manipulation, and bonus payouts at record levels (last year Wall St paid bankers 170% of their profits in bonuses, it seems unlikely that there’ll be any damascene conversions until the demand side of the equation (parents and students or customers) withdraw their support.

But, at least with reports such as Laker and Hills, and documentaries like The Big Short, we can’t pretend we didn’t know what was happening.

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