It’s Always the Human Factors!

Fascinating new data analysis (see report here) from CB Insights on the most common causes of start-up failure as revealed through 101 post-mortem investigations. What struck us was how many of the top 12 or so factors are preventable (the totals do not add to 100% because multiple items were at play in most failures). It is common knowledge that under-capitalization is a major factor, yet “running out of money” was among the most common precipitants to failure. This tells us that entrepreneurs regularly discount the risk this poses to their start-up’s likelihood of success. Same with “no market need.” And then we get to the human relationship issues like “not the right team” or “disharmony among team/investors.”

As with most problems we encounter, the devil in the details is about humans and their inability to think clearly and get along with each other.

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The Most Important Thing in Search

The most important line in the article, The Five Key Capabilities of Effective Leadership, from INSEAD is not about the five capabilities per se. It is the tag line, “Don’t try to find them all in one single hero.” Wise advice for search committees everywhere–avoid the urge to find God on a good day.

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When Rankings Are An Illusion

Parents (and many board members) crave a ranking system for independent and (especially) international schools. That there is no standardized and agreed-upon system or clearinghouse for such rankings frustrates parents and convinces many board members that the avoidance of such things is self-serving for heads of school. This item, about rating schemes for physicians, reveals the problem that lurks within almost every ratings framework: how can one trust that the rankings are both truthful and objective?

This article from the CBC in Canada reveals a major weakness in one set of seemingly objective ratings of doctors. A physician who had just received a negative review on one common web site was offered to have the comments removed … for a fee! If one can pay to block negative reviews, then how credible and useful are the ratings in the first place?

At the same time, we understand the craving for accurate, third-party information. Private school can be both the biggest financial investment a family can make (US$400K and up per child) and can have the most potential risk (will our children be ok in the long run?). Against that risk, one can understand the desire for ratings and rankings.

The problem, of course, is that education is an industry that runs on trust, and there is little in modern life to suggest such trust is well founded. Since “trust me” is dead, how else do we have honest conversations about schools and students?

 

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Someone Always Wants the Job

With word that Margaret Spellings is stepping down as president of the University of North Carolina comes a headline from the Chronicle of Higher Education:

Margaret Spellings Is Stepping Down at UNC. Will Anyone Want to Replace Her?

It is always tempting to think that an institution is so troubled or that an incumbent leader has made such a mess of things that no one will take the job. But, our experience is that this is just not the case. We have seen open headships at schools that no one should try to lead attract applicants. In every case, the applicants either minimize the troubles or believe that the only missing ingredient in that school’s success is them.

Will anyone want to replace Spellings? Sure, but the more important question is about whether success in the role is even possible. That requires a more rational assessment than it’s usually the case in searches.

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It’s Chaos Out There!

The 70+ international school heads and board members attending all or part of our two-day course in governance at the EARCOS Leadership Conference in Kuala Lumpur represented an astounding variety of school types and board configurations.

  • Size of board: from two to 127.
  • Number of overlapping and interlocking boards: from one to five.
  • Corporate form: from nonprofit to corporate to family business to one school that is a joint venture between a host country government and a toy manufacturer.
  • Some heads of school attend board meetings ex officio but do not vote (the norm in U.S. private, independent schools) while other heads do vote and some heads do not always attend board meetings.
  • Some countries require a high degree of supervision of the board (e.g., the statutory auditors in Japan or the tri-level board system in Indonesia) while others mandate less, but almost all expect closer board oversight of management than is typical in North America;
  • Some boards were self-perpetuating while others were fully parent-elected and others were hybrids; some boards were all members of the same family and others were appointed by sponsoring religious organizations.

We have been at EARCOS (and other regional association) meetings for years, but this year marks the largest range of schools and boards in our memory. But, it is just the continuation of a trend reaching back more than a decade, ever since the numbers of Anglophone expats began dropping in most parts of the world.

While we are just beginning to digest the data and consider implications for our work with schools, we can make a few observations worth sharing with your boards and administrative teams:

  1. Market fragmentation is accelerating almost everywhere (more options with more types of schools);
  2. Everyone is offering the same IB or AP or GSCE product and is accredited by the same handful of agencies (mostly CIS);
  3. One-size-fits-all governance training is so 2015–we need new models appropriate for family businesses, corporately-owned schools, and those with different degrees of governmental supervision;
  4. Parents are less likely to be the Anglophone expat of yesteryear–and so are less likely to have themselves experienced anything like the program the school has on offer; and
  5. When viewed through the customer’s eyes, the education market must look confusing at best and chaotic at worst, never a good thing when people are already anxious about their choice of school.

More later, but some things to think about in the meantime.

 

 

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Amazon and You: What Independent School Boards Can Learn from Jeff Bezos’ Letters

Lots of people know about Warren Buffet’s annual shareholder letter; indeed, commentary about Buffet’s observations has become a ritual in the business media. Fewer know that Jeff Bezos of Amazon has done much the same every year since 1997, compiling a fascinating and useful trove of business wisdom as Amazon became a US$1 trillion company.

Buried in the original 1997 letter is the following:

“…we want to share with you our fundamental management and decision-making approach so that you, our shareholders, may confirm that it is consistent with your investment philosophy.”

While Bezos was specifically addressing shareholders–in effect co-owners of the company–his wisdom has something to offer independent school board members (and parents), all of whom are counted at stakeholders (those with an interest) and not shareholders (those who own). Because Amazon was and is famously counter-cultural for normal business practice (e.g., not particularly concerned with profitability of share price), Bezos wanted shareholders to be aligned in their investment philosophy. Those not aligned could simply opt out.

Independent schools need to do the same when it comes to selecting new members of the governing board. Much turmoil could be averted if every board member were aligned with the educational philosophy and mission of the school. Waaayyyyy too much time and energy is spent handling trustees who really don’t buy in; in other words, it would be like being an Amazon shareholder and demanding immediate returns.

I can accept the parent in the school who decides that what the school offers no longer is what they want for their child. Find another school–no harm, no foul. What I cannot see room for is the rogue board member who uses his or her seat to agitate for the school to become something other than what its mission dictates. Best to find a school where you can be aligned and offer your talents there.

Bezos’ focus on mission and purpose comes through in the 1997 letter: “We aren’t so bold as to claim that the above is the “right” investment philosophy, but it’s ours, and we would be remiss if we weren’t clear in the approach we have taken and will continue to take.” The Amazon board recruits for alignment; independent and international school boards should do the same.

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