April 23, 2014

Column from Florida Trend's Executive Editor

Back to School

Mark R. Howard | 9/19/2012

When a company considers moving, its executives always ask economic developers and businesspeople in the target community how good their schools are.

About a decade ago, some business leaders around Florida began thinking they should take a bigger role in influencing how they answered that question. And today, in many communities, businesses and the local school system have developed a closer relationship — adopt-a-school partnerships; executives who guest-teach or mentor students, teachers and principals; and, of course, the activities of local education foundations in raising funds to provide a few “extras” for teachers and administrators.

All well and good. But while business groups have nibbled around the edges, it’s hard to find instances where a business group has tried to take a meaningful role in how a school district is actually run. And it’s nearly impossible to find examples of local school boards spontaneously taking a real businesslike approach to the operation of schools.

One of the ugly little truths about school districts is that while they say they welcome “involvement” by parents and business groups, what that really means is they welcome enrichment-type help that doesn’t challenge the status quo — a few extra dollars, help at the bus circle, a volunteer tutor here and there. But if parents or business groups begin to ask questions about incompetent teachers or school operations, the system gets its back up pretty quick.

Several years ago, I wrote how the Pinellas Education Foundation had become among the most ambitious such foundations in the state in pushing for systemic change. I’m happy to report that the foundation is still at it, with an effort that should become a model for other education foundations and business groups.

Craig Sher, executive chairman of Sembler Co. in St. Petersburg, a shopping center development firm, was serving as the foundation’s chairman in 2011 when it began exploring the idea of looking at the school district’s $1.3-billion budget and operations. “I went to the executive committee and said, ‘let’s figure out what businesspeople do best,’ ” Sher says — focus on operating efficiently to deliver the best value to shareholders, whom he sees as the children and their parents.

Ultimately, more than 30 business and community leaders worked with district staff to comb through its finances. They focused on potential savings in six areas — health benefits and insurance; energy; maintenance; construction; purchasing; and transportation. The foundation hired a businessman and former educator to facilitate the ongoing effort.

In April, the foundation presented the Pinellas school board with a proposal detailing more than $30 million in potential savings. Suggestions ranged from self-insuring ($20 million) to changes in how schools are heated and cooled ($3 million) — energy costs for the Pinellas district are some 30% higher than in neighboring Hillsborough County, the report found. The report also suggested efficiency-related changes in purchasing practices — small contracts of between $25,000 and $50,000 accounted for less than 2% of spending, but bureaucratic requirements meant they took up more than 25% of the purchasing staff’s time.

Some of the district’s responses to several suggestions betray the kind of “we’ve-never-done-it-that-way-and-aren’t-going-to-start-now” bureaucratic thinking that plagues many large organizations, both private and public. But the district has already adopted several of the savings ideas, and Superintendent John Stewart has openly
supported the effort.

Sher characterizes the district’s response to the “Savings for Classroom” report as “basically good. Obviously, businesspeople like to move faster than government.”

The biggest item — self-insurance — is the thorniest, but as revenue continues to decline, the board can’t ignore a possible $20-million savings — the equivalent of a one- or two-step raise for every teacher in the system.
Sher says the foundation will continue to push for change in how the district does business. It plans, for example, to help the district negotiate with the teachers union, which typically comes to the bargaining table with more legal and technical firepower than the district can muster. Sher says the foundation is eager to share what it has learned with other foundations and groups throughout Florida.

Some tend to see “businesslike approach” in the context of education as a euphemism for nickel-and-diming the public schools and trying to educate kids on the cheap. But it’s simply a fact that in every county in Florida, the school district is a multimillion- or billion-dollar operation and one of the largest employers. It’s also true that the members of school boards that run the school systems — however well-intentioned — typically don’t have the experience and orientation that similar-sized business operations would require.

Some districts may be seeing the light. Broward County recently hired a superintendent, Robert Runcie, who’s a Harvard-trained economist with an MBA from Northwestern and is bringing a best-practices, private-sector approach to improving school operations.

Meanwhile, groups like the Pinellas Education Foundation should keep nudging the districts to use their resources effectively. And to keep the districts focused not on the school system’s buildings and employees, but on the children.

For that to happen, says Sher, “We have to change how we think. Management has to act like management.”

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