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Archive for the 'Business' Category

Monday, August 28th, 2017

Designed Leadership: Principle 1: Make Values Explicit

Designed Leadership

“In the world of designed leadership, values are essential underpinnings for key principles and practices. What is the use of identifying values in an organization if you don’t use them on a daily basis for decision-making?” — Moura Quayle

The following is a guest post from Moura Quayle, author of Designed Leadership. Over the next several weeks, Quayle will take readers through all ten of her designed leadership principles in a series of posts.

Designed Leadership: Principle 1: Make Values Explicit
By Moura Quayle

This post is about the first principle of Designed Leadership – making values explicit. The other nine principles will be explored over the next few posts.

There is not much that is more important in this world than awareness of what we value—and of what those values are. As I was pulling together my leadership experiences in writing Designed Leadership, I realized that there are different kinds of value sets that are useful in making decisions on everything from the strategic plans for organizations to household decisions around the types of financial institutions we use or the philanthropic choices that we make. There are core values, process values, and foundation values. The value you hold also drive your approach to the strategic design method—a collaborative, visual, disciplined thinking method for tackling complex problems (small and large) and systemic challenges.

As I write in my book: “In designed leadership, values are strategic markers to orient principles and provide touchstones for assessments of incremental or final performance. This accountability (also a value) is fundamental to the effectiveness of designed leadership—it’s the value-add of the design process generally.”

Core values such as accountability, effectiveness, elegance, and respect are defined only as a means to aggregate other components or meta-values. When I started thinking about what values are “core,” accountability popped up as a key one. And it isn’t simple to identify what accountability means beyond the usual financial or accounting business context. I also have accountability to myself and my colleagues around my relationships and my work. Similarly, effectiveness means different things to different people. If accountability is assessment of external values, then effectiveness is an assessment of internal values which range from communication to process understanding to getting the job done. Elegance is maybe one of my favourite core values and perhaps an unusual one for some people. Elegant solutions are something to strive for whether you are a math whiz, a coder, or the US ambassador to France. The elegant outcome is one that takes complex inputs and makes the solution look easy. Elegant solutions are achieved through hard work and intention. Finally, respect is core, process, and foundation all rolled together for designed leadership. It is essential, aspirational, and learned. Respect is how we can acknowledge and learn about the many belief systems that exist in our world. Most importantly, people have to feel respected before they can be comfortable with change, and these days change is constant.

Process values—complexity, resilience, diversity, erudition—bring another perspective to intentional design. They direct and guide us through any thinking and problem solving methodology. We run across complicated problems on a day-to-day basis and usually find a way to solve them. However, complex problems can stop us in our tracks. These complex problems are often called messy or wicked problems these days. The wicked problem terminology came from Horst Rittel and his colleagues at UC Berkeley. I had the great experience of taking a course from Rittel so was introduced to this “type” of problem early in my career. These are problems that are difficult to define and owned by many. The strategic design method is great to help unpack them. Resilience, diversity, and erudition are values that are key in designed leadership where adaptability, robustness, openness and earning are essential.
Foundation values are perhaps the ones that we are most used to identifying as values: honesty, cost-effectiveness practicality, and being organized. As David Fushtey (governance guy) says, “Today, in value terms, everything matters.” Designed leadership acknowledges this fact and embraces the idea that everything does matter.

The ten principles for designed leadership illuminate how a designer mindset applies to leadership and what principles are useful to apply in life and in work. The first of these ten principles, Make Values Explicit, illustrates the centrality of values in designed leadership.

Principle 1. Make Values Explicit: Make values explicit to communicate more consistently with others in decision making, oversight, and accountability assessments.

In the world of designed leadership, values are essential underpinnings for key principles and practices. What is the use of identifying values in an organization if you don’t use them on a daily basis for decision-making? At the British Columbia Ministry of Advanced Education we tried various ways of integrating values into our decision-making processes, including making them an explicit part of the agenda. This involved co-creating the agenda at the beginning of our meetings and keeping visual reminders around the meeting table. It also required discipline on behalf of the executive to connect our discussions and decisions to our values. “Good designed leadership makes values explicit, stating them in easy-to-understand terms, followed by principles and, often, by guidelines or standards. This way, the values are connected and can be used transparently and openly to inform decision-making. Designed leadership demands elasticity of thinking—being able to take a value like ‘respect,’ and articulate what it means to be respectful, as well as what it means to be disrespectful. This type of discussion helps us more deeply understand values and what they mean.”

Value discussions can cause tension as we cross disciplines and start talking business and design. We have different languages and use words in different ways. “Language is the medium we use to explore and learn, to grow and change—based on our values. So, connecting the languages of business and the language of design has the potential to create new language and new behavior—and ideally, new approaches to problem solving.”

“It is vitally important to clarify your own values, and to work with colleagues to define the key values of a community or organization. Once defined, it is important to use values in decision making and strategic thinking.”

Thursday, July 20th, 2017

Designed Leadership: A Case Study

Designed Leadership

“C3 presented an opportunity to demonstrate that, in Vancouver, things can be done differently. We can break down the disciplinary isolation in our institutions. We can collaborate more effectively while providing a real-world learning environment for students.” — Moura Quayle

This week, our featured book is Designed Leadership, by Moura Quayle. Today, we are happy to start the feature off with an excerpt from the book’s case studies section, in which Quayle uses her real world experience working with Vancouver’s Campus City Collaborative (C3) to meet the city’s challenging “greenest city” goals.

Don’t forget to enter our book giveaway for a chance to win a free copy of Designed Leadership!

Wednesday, July 19th, 2017

Introduction to the Principles of Designed Leadership

Designed Leadership

“Designed leadership depends on having some sort of problem-solving or opportunity-seeking process to help you when you need to plan or when you are ‘stuck.’ Even when you may not be quite sure of where you are going, having a thinking process is essential. It is a touchstone along the journey.” — Moura Quayle

This week, our featured book is Designed Leadership, by Moura Quayle. Today, Quayle provides an introduction to the principles of designed leadership she discusses at greater length in her book.

Don’t forget to enter our book giveaway for a chance to win a free copy of Designed Leadership!

Introduction to the Principles of Designed Leadership
By Moura Quayle

Looking at familiar places, I realized that the last time I had worked in our capital city was in the private sector, as the principal of a built environment design business – it would now be called a “start-up.” Close to four decades later, looking out my government office window when tasked with reviewing and updating a system of twenty five institutions with assets in around fifty locations and links in a hundred countries, serving over one hundred eighty thousand students, and governed by twenty five boards with combined operating budgets of $1.6 billion, I wondered what in the world prepared me for this task. The products I was dealing with were ideas and people, with no common bricks and mortar, or other tangible form. My task was providing leadership for organizational and institutional transformation.

Yet I felt comfortable and confident in using a strategic design approach. Over the previous quarter century I had studied and applied it, scaled up and out. More importantly, perhaps, I had learned the importance of the old saw that to go far you need to go with others. When applying risk management and fiscal accountability in integrating diverse interests, this meant building common understanding of terms of reference and decision-making values as well as information infrastructure. When the context is complex and dynamic for the long-term, the skills are not intuitive but learned. Designed leadership. (more…)

Tuesday, July 18th, 2017

Strategic Design in Action

Designed Leadership

“This book is about how we can lead better. As we remember the joys and potential of lifelong learning, it is also worth remembering that the leaders among us, from every sector, all once faced the world as fresh-faced, wide-eyed, and innocent preschoolers…. The principles here will connect the surviving naïfs in us all to the disciplined future leaders that we all have the capacity to become.” — Moura Quayle

This week, our featured book is Designed Leadership, by Moura Quayle. Today, we are happy to start the feature off with an excerpt from the book’s introduction, in which Quayle discusses the need for theories of effective leadership, what design principles and practices actually are, and the value of integrating design and leadership.

Don’t forget to enter our book giveaway for a chance to win a free copy of Designed Leadership!

Monday, July 17th, 2017

Book Giveaway! Designed Leadership

Designed Leadership

“This book contributes a very thoughtful set of observations about the principles and practices of successful leaders who rely on a ‘strategic design’ approach. Moura Quayle draws on a diverse and impressive range of personal leadership experiences to illustrate and emphasize her points. Insightful, yet still accessible.” — Jeanne Liedtka, University of Virginia Darden School of Business

This week, our featured book is Designed Leadership, by Moura Quayle. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page.

Friday, June 23rd, 2017

Mark Kennedy in UND Today

Shapeholders

“Kennedy began teaching courses on business statesmanship and business success in the age of activism. He conducted a research project at the University of Pennsylvania, taught at Johns Hopkins, HEC Paris, New York University, and Notre Dame. Later, he was recruited to George Washington University, where in addition to leading a school, he taught a MOOC (Massive Open Online Course) on Shapeholders and led courses on public affairs around the world.” — Jan Orvik

This week, our featured book is Shapeholders: Business Success in the Age of Activism, by Mark R. Kennedy. For the final post of the week, we are happy to present an excerpt from an article by Jan Orvik that originally appeared in UND Today. You can read the article in its entirety here.

Don’t forget to enter our book giveaway for a chance to win a free copy!

Kennedy’s new book takes on ‘Shapeholders’
By Jan Orvik

Shareholders. Stakeholders. And shapeholders?

The subject of a new book by UND President Mark Kennedy, Shapeholders: Business Success in the Age of Activism, zeroes in on how political, regulatory, media and activists can shape – or shift – business practices.

The “shapeholders” term was coined by Kennedy’s son, Charles.

“The main point of the book, which was released on May 9, is that you have stakeholders, shareholders and shapeholders,” Kennedy said. “Shapeholders are different than stakeholders or shareholders. They are the politicians, media and activists who can shape a firm’s opportunities and risk, even though they have no stake in an organization’s success.”

For example, Kennedy said, employers and suppliers can push companies to change, but there are limits to how far they can go because they have a stake in the success of those organizations. Activists, who often don’t have stake in a company, can cause conflict. As Kennedy observed, “the only stake an environmental activist may want in a coal company is a stake through its corporate heart, yet that activist can still shape the opportunities and risks of a coal company.”

“Companies are often out of their element when talking to shapeholders, resulting in more conflict,” said Kennedy. His book discusses engaging shapeholders in the long term to both advance business and benefit society.

Trip around the world

The book is a result of Kennedy’s global expertise.

After he left Washington, D.C., the former Minnesota Congressman took a trip around the world. Like the protagonist in the classic adventure novel, Around the World in Eighty Days by Jules Verne, he began in London and spoke at the Reform Club, which was founded in 1836. Kennedy’s talk, “Focus to Finish First,” postulated that the world is now so global and competitive that there is no choice but to be No. 1 in what you do.

Read the rest of the article at UND Today.

Thursday, June 22nd, 2017

Introducing “Shapeholders”

Shapeholders

“I saw how elements of society with no stake in a company’s success can foment hysteria, turning their attention to one particular corporation, making it the personification of some hotbutton issue, and giving it little chance to alter the proclaimed judgment imposed by agitated elements of society…. I saw how the fault lay primarily with the businesses involved. These businesses would blame the reaction on politics. Yet doing so is an admission that they do not understand politics.” — Mark R. Kennedy

This week, our featured book is Shapeholders: Business Success in the Age of Activism, by Mark R. Kennedy. Today, we are happy to present Kennedy’s preface, in which he explains how he saw the need for a book that could help businesses proactively deal with social concerns.

Don’t forget to enter our book giveaway for a chance to win a free copy!

Wednesday, June 21st, 2017

Mark Kennedy discusses Shapeholders

Shapeholders

“This book defines the social activists, media outlets, politicians, and regulators who have no stake in a company but a powerful ability to shape its future as shapeholders. It identifies effective strategies for engaging them.” — Mark R. Kennedy

This week, our featured book is Shapeholders: Business Success in the Age of Activism, by Mark R. Kennedy. Kennedy has recently done a couple of excellent podcast interviews, in which he delves into some of the important topics featured in his book.

Don’t forget to enter our book giveaway for a chance to win a free copy!

First, Kennedy was a guest on Money Life with Chuck Jaffe (download an mp3 here). In the show, Kennedy and Jaffe take a deep dive into the ways that shapeholders impact market value.

Second, Kennedy appeared on the Center for Strategic and International Studies podcast “Building the Future: Freedom, Prosperity, and Foreign Policy with Dan Runde” (you can listen below). Runde and Kennedy discuss Kennedy’s political career, international trade and protectionism, and small businesses in the United States.

Tuesday, June 20th, 2017

From the Heart of a Businessman

Shapeholders

“This book defines the social activists, media outlets, politicians, and regulators who have no stake in a company but a powerful ability to shape its future as shapeholders. It identifies effective strategies for engaging them.” — Mark R. Kennedy

This week, our featured book is Shapeholders: Business Success in the Age of Activism, by Mark R. Kennedy. To start the week’s feature, we are happy to present Kennedy’s introduction, in which he explains what a “shapeholder” actually is and begins his discussion of why businesses should care what shapeholders think.

Don’t forget to enter our book giveaway for a chance to win a free copy!

Monday, June 19th, 2017

Book Giveaway! Shapeholders: Business Success in the Age of Activism

Shapeholders

Shapeholders offers personal, practical, and thoughtful counsel for businesspeople of today—and definitely of tomorrow. Kennedy wants business leaders to appreciate the larger societal, political, and regulatory context that may determine the success or failure of their businesses—and then he offers seven steps to guide the development and execution of a “profit-plus” strategy. The book is rare in combining an easy-to-read style, useful takeaways, and wise insights about business in America. Shapeholders is a great read for business students, executives and boards, people interested in business and policy, and the many people who wish to influence businesses. This short book packs in a lot of experience, judgment, and direct advice.” — Robert B. Zoellick, former president, the World Bank

This week, our featured book is Shapeholders: Business Success in the Age of Activism, by Mark R. Kennedy. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page.

Thursday, February 2nd, 2017

Valuation as a Bridge

Narrative and Numbers

“What comes more naturally to you, story telling or number crunching?” — Aswath Damodaran

This week, our featured book is Narrative and Numbers: The Value of Stories in Business, by Aswath Damodaran. For today’s post, we highlight Professor Damodaran’s YouTube video, below, introducing the book and its project.

Don’t forget to enter our book giveaway for a chance to win a free copy of Narrative and Numbers!

Wednesday, February 1st, 2017

From Data to Stories

Narrative and Numbers

“…this book is about my journey from an unquestioning trust in numbers to an increasing focus on stories in valuation and my stories about the companies that I value in this book. I don’t expect you to buy into my stories. In fact, I hope that you disagree with me and tell your own stories and that this book will help you convert those stories into valuations.” — Aswath Damodaran

This week, our featured book is Narrative and Numbers: The Value of Stories in Business, by Aswath Damodaran.

The following is an excerpt of a post originally published by Professor Damodaran on his blog on Wednesday, January 11th, 2017.

When I taught my first valuation class in 1986 at New York University, I taught it with numbers, with barely a mention of stories. It was only with the passage of time that I realized that my valuations were becoming number-crunching exercises, with little holding them together other than historical data and equations. Worse, I had no faith in my own valuations, recognizing how easily I could move my final value by changing a number here and a number there. It was then that I realized that I needed a story to connect the numbers and that I was not comfortable with story telling, and that realization led me to start working on my narrative skills. While I am still a novice at it, I think that I have become a little better at story telling than I used to be and it is this journey that is at the core of my newest book, Narrative and Numbers: The Value of Stories in Business.

Story versus Numbers

What comes more naturally to you, story telling or number crunching? That is the question that I start every valuation class that I teach and my reasons are simple. In a world where we are encouraged to make choices early and specialize, we unsurprisingly play to our strengths and ignore our weaknesses. I see a world increasingly divided between number crunchers, who have abandoned common sense and intuition in pursuit of data analytics and complex models and story tellers, whose soaring narratives are unbounded by reality. Each side is suspicious of the other, the story tellers convinced that numbers are being used to intimidate them and the number crunchers secure in their belief that they are being told fairy tales. It is a pity, since there is not only much that each can learn from the other, but you need skills in investing and valuation. I think of valuation as a bridge between stories and numbers, where every story becomes a number in the valuation and every number in a valuation has a story behind it.

Narrative and Numbers

When I introduce this picture in my first class, my students are skeptical, as they should be, viewing it as an abstraction, but I try to make it real, the only way I can, which is by applying it on real companies. I start every valuation that I do in class with a story and try to connect my numbers to that story and I try to be open about how much I struggle to come up with stories for some companies and have much my story has to change to reflect new facts or data with others. I push my students to work on their weaker sides when they do valuations, trying asking story tellers to pay more heed to the numbers and beseeching number crunchers to work on their stories. Seeking a larger audience, I have not only posted many times on the process but almost every valuation that I have posted on this blog has been as much about the story that I am telling about the company as it is about the numbers. In fact, having written and talked often about the topic, I thought it made sense to bring it all together in a book, Narrative and Numbers, published by Columbia University Press, and available at bookstores near you now.

From Story to Value: The Sequence

So, how does a story become a valuation? This book is built around a sequence that has worked for me, in five steps, starting with a story, putting the story through a reality check, converting the story into a valuation and then leaving the feedback loop open (where you listen to those who disagree with you the most and try to improve your story).

Narrative and Numbers

There is no rocket science in any of these steps and I am sure that this is not the only pathway to converting narrative to value. These steps have worked for me and I use four companies as my lead players to illustrate the process.

  • Uber, the ride-sharing phenomenon: I start with the story that I told about Uber in June 2014, and the resulting value, and how that story evolved over the next 15 months as I learned more about the company and its market/competition changed.
  • Amazon, the Field of Dreams Company: Amazon is a story stock that seems to defy the numbers laws and I use it to illustrate how the value for Amazon can vary as a function of the story you tell about it.
  • Alibaba, the China story: The China big market story has been used to justify the valuations of many companies, but Alibaba is one case where the use of that story is actually merited. In my story, Alibaba continues to dominate the growing Chinese online retail market and my value reflects that, but I also look at how that value will change if Alibaba can replicate its success globally (Alibaba, the Global Story).
  • Ferrari, the Exclusive Club: I value Ferrari as an exclusive club, leading into its IPO, and explore how that value will change if you assume that it will follow a different business model.
  • In the later chapters, I bring in other familiar names (at least to those who read my blog), to illustrate how macroeconomic factors affect stories and Yahoo! to examine the effect of the corporate life cycle. In the final part of the book, I turn the focus on management and look at how the story telling skills of top managers can make a significant difference in how a young company is perceived and valued by the market and how that skill set has to shift as the company ages…

    Don’t forget to enter our book giveaway for a chance to win a free copy of Narrative and Numbers!

    Tuesday, January 31st, 2017

    A Tale of Two Tribes

    Narrative and Numbers

    “So let’s see where we stand. We relate to and remember stories better than we do numbers, but storytelling can lead us into fantasyland quickly, a problem when investing. Numbers allow us to be disciplined in our assessments, but without stories behind them, they become weapons of intimidation and bias rather than discipline.” — Aswath Damodaran

    This week, our featured book is Narrative and Numbers: The Value of Stories in Business, by Aswath Damodaran. For the first post of the week’s feature, we are happy to present an excerpt from the book’s first chapter, “A Tale of Two Tribes.”

    Don’t forget to enter our book giveaway for a chance to win a free copy of Narrative and Numbers!

    Monday, January 30th, 2017

    Book Giveaway! Narrative and Numbers, by Aswath Damodaran

    Narrative and Numbers

    “No one has contributed more to the craft of valuation than Aswath Damodaran. In Narrative and Numbers, he correctly shows that you can’t understand the stock without the story. After Damodaran’s eye-opening tour, you will forever appreciate the vital contribution of human nature to number-crunching.” — Michael Mauboussin, Head of Global Financial Strategies, Credit Suisse

    This week, our featured book is Narrative and Numbers: The Value of Stories in Business, by Aswath Damodaran. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page.

    Thursday, January 26th, 2017

    How Much Do You Know About Corporate Strategy?

    If You're in a Dogfight, Become a Cat!

    “Cats are a different breed of animal—clever, solitary hunters who are more inclined to explore new territory and to redefine the game on their own terms than to engage with the pack in a no-win dogfight. Cats are agile and innovative, and seek their prey (customers) with tactics that dogs cannot easily replicate.” — Leonard Sherman

    This week, our featured book is If You’re in a Dogfight, Become a Cat!: Strategies for Long-Term Growth, by Leonard Sherman. Today, we are happy to present a quiz on corporate strategy, with information pulled from the many case studies in If You’re in a Dogfight, Become a Cat!.

    Don’t forget to enter our book giveaway for a chance to win a copy of If You’re in a Dogfight, Become a Cat!.

    Tuesday, January 24th, 2017

    Introducing “If You’re in a Dogfight, Become a Cat!”

    If You're in a Dogfight, Become a Cat!

    “Cats are a different breed of animal—clever, solitary hunters who are more inclined to explore new territory and to redefine the game on their own terms than to engage with the pack in a no-win dogfight. Cats are agile and innovative, and seek their prey (customers) with tactics that dogs cannot easily replicate.” — Leonard Sherman

    This week, our featured book is If You’re in a Dogfight, Become a Cat!: Strategies for Long-Term Growth, by Leonard Sherman. To start the week’s feature, we are happy to present an excerpt from the preface to If You’re in a Dogfight, Become a Cat!.

    Don’t forget to enter our book giveaway for a chance to win a copy of If You’re in a Dogfight, Become a Cat!.

    Monday, January 23rd, 2017

    Book Giveaway! If You’re in a Dogfight, Become a Cat!, by Leonard Sherman

    If You're in a Dogfight, Become a Cat!

    “A wonderfully comprehensive view of competition and competitive strategy and illustrating it well with contemporary examples and citing of the scholarly literature and linking that to action oriented techniques.” — John Czepiel, New York University Stern School of Business

    This week, our featured book is If You’re in a Dogfight, Become a Cat!: Strategies for Long-Term Growth, by Leonard Sherman. Throughout the week, we will be featuring content about the book and its author on our blog as well as on our Twitter feed and our Facebook page.

    Friday, December 23rd, 2016

    Introducing Class Clowns

    Class Clowns

    “At the end of the day, the underlying motivations of the various actors matter less than knowing how to avoid the mistakes detailed here. The trick is to retain the passion for education but lose the emotional or ideological commitments to particular solutions.” — Jonathan A. Knee

    This week, our featured book is Class Clowns: How the Smartest Investors Lost Billions in Education, by Jonathan A. Knee. Today, for the final day of the feature, we are happy to present an excerpt from Knee’s introduction.

    Don’t forget to enter our book giveaway for your chance to win a free copy of Class Clowns!

    Thursday, December 22nd, 2016

    Why For-Profit Education Fails

    Class Clowns

    “Should anyone care that a bunch of very rich people have failed in these ventures? In fact, this should matter to anyone concerned about education. That failure, repeated so consistently, has given credible fodder to people who resist the active participation of for-profit enterprises in the educational sphere. But that sphere will always comprise public and private, nonprofit and for-profit institutions, and for-profit businesses play an essential role.” — Jonathan A. Knee

    This week, our featured book is Class Clowns: How the Smartest Investors Lost Billions in Education, by Jonathan A. Knee. Today, we are happy to share an excerpt from “Why For-Profit Education Fails,” an article by Jonathan Knee that appeared in The Atlantic.

    Don’t forget to enter our book giveaway for your chance to win a free copy of Class Clowns!

    Why For-Profit Education Fails
    By Jonathan A. Knee

    [O]ver the past couple of decades, a veritable who’s who of investors and entrepreneurs has seen an opportunity to apply market discipline or new technology to a sector that often seems to shun both on principle. Yet as attractive and intuitive as these opportunities seemed, those who pursued them have, with surprising regularity, lost their shirts. JP Morgan backed Edison Schools’ ill-conceived effort to outsource public education in the late 1990s and saw the business lose 90 percent of its value during its four years as a public company; Goldman Sachs was one of many private-equity firms that came up empty after betting on the inevitable ascendance of for-profit universities; the billionaire Ronald Perelman shut down his futuristic K–12 educational-technology company, GlobalScholar, after spending $135 million and concluding that the software was faulty and a “mirage”; by the time the hedge-fund titan John Paulson was able to sell the last of his stake in Houghton Mifflin Harcourt, in 2015, he had likely lost hundreds of millions financing the company’s misguided mission to remake textbook publishing.

    Not all financial investments in education end badly, but the number that have is notable, as are the magnitudes of the fiascos, in stark contrast to the successes of many of these same investors in other domains. The precise sources of failure in each instance are diverse, as are the educational subsectors targeted and the approaches pursued. But what many share is the sweeping nature of their ambition. (more…)

    Wednesday, December 21st, 2016

    The Road to Disastrous Educational Businesses Is Paved With Good Intentions

    Class Clowns

    “Scaling back ambitions and moving from high-minded rhetoric to the gritty operational challenges can have the feel of selling out. When the principles involved are viewed as fundamental, compromise—whether to a business model or to a policy platform—can be anathema. Yet the failure to do so in both instances not only makes the perfect the enemy of the good, but it also threatens to more permanently undermine the potential long-term benefits to both shareholders and the public.” — Jonathan A. Knee

    This week, our featured book is Class Clowns: How the Smartest Investors Lost Billions in Education, by Jonathan A. Knee. Today, we are happy to share a piece of an excerpt posted in full by EdSurge.

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    Adherents of particular educational business models and advocates of particular educational public policy approaches have a tendency to use very similar language in promoting their views. Their favored instrumentality of change is typically described alternatively as “transformational” or “revolutionary.” In both cases, the evidence suggests that a narrowing of focus, a nuanced appreciation of the particular market structure and context, and an emphasis on the importance of effective execution would go a long way toward improving the probability of successful outcomes.

    But this is easier said than done. In general, revolutionaries are not known for their humility. Scaling back ambitions and moving from high-minded rhetoric to the gritty operational challenges can have the feel of selling out. When the principles involved are viewed as fundamental, compromise—whether to a business model or to a policy platform—can be anathema. Yet the failure to do so in both instances not only makes the perfect the enemy of the good, but it also threatens to more permanently undermine the potential long-term benefits to both shareholders and the public.

    In the public policy arena, there is no better example of this phenomenon than the failed efforts of well-meaning reform advocates to use Facebook CEO Mark Zuckerberg’s $100 million gift to Newark’s public schools to revolutionize urban public education more broadly. As documented by Dale Russakoff in her compelling 2015 book “The Prize,” the Newark initiative was disastrous, leaving little to show for the massive investment. In seeking transformational results that could be used as a template elsewhere, leaders misjudged the political environment, ignored the specific needs of the traumatized local population, and entrusted execution to true believers who did not have the required skills.

    It would be hard to argue that the magnitude of this failure has not set back even better-conceived reform efforts. Those most responsible for the Newark debacle frequently invoked jargon plucked from business best sellers to justify their misguided efforts. Given the embarrassing results of many of the “transformative” educational business initiatives—including a number with which the same executives involved in Newark were associated—it is unclear how compelling these references were. More broadly, the failure of these business ventures has given credible fodder to those who resist the active participation of for-profit enterprises in the educational sphere.

    Read the excerpt in its entirety at EdSurge.