January 18, 2007

Professor William OuchiLOS ANGELES - Since its publication in 2003, Making Schools Work by Professor William Ouchi has proved revolutionary. The book’s recommendations for management reform in public education have been implemented by numerous school districts nationwide, illuminating ways in which management principles may be applied in a setting as far from the private sector as possible: the redtaped bureaucratic milieu of a public board of education.

Most recently, The Academy of Management Journal convened its All-Academy Symposium at its 65th annual meeting in Honolulu. The topic came straight off of Ouchi’s page: “Making Schools Work: Management Reform as the Key.” It could be said that Ouchi’s work at UCLA Anderson not only closes the gap between the tenets of management and the formation of public policy — it has helped construct the actual bridge.

“I don’t do anything unless it has the potential to influence institutions on a national level,” says Ouchi, who holds the Sanford and Betty Sigoloff Chair in Corporate Renewal at Anderson. “I’m a chaired professor at a renowned management school. I’m not interested in writing articles that nobody reads. That’s the whole point of having tenure and a chair. I can take five or six years doing research before showing results. If I don’t do that, what’s the point of having tenure?”

School of Thought
Ouchi has focused on education policy for many years. In Los Angeles, his involvement dates back to the “LEARN” program, a plan that advocated decentralization in public schools. Though the policy was adopted, it never was implemented formally or fully in the Los Angeles Unified School District (LAUSD).

Ironically, when Ouchi decided to devote serious research to education, his proposals were rejected by traditional education foundations. The initial work eventually was funded in part by a pair of benefactors – Peter Bing and Frank Baxter – and foundation funding finally followed. The papers that emerged from the research, as well as Making Schools Work, detail practical principles that seem incredibly obvious from a management perspective. And yet they are anathema to the way many school districts are run.

Asked to distill and (reduce) the numerous lessons to the few essential “must-dos,” Ouchi responds with what he calls “the four freedoms that must be given to every school.”

The Four Freedoms
The first is the freedom for every school to control its own budget “with strong accountability.” Typically, budgets are centrally controlled by school boards and boards of education. Second, give school principals the ability to staff their institution as they see fit.

Third, give schools – principals and their faculty – the freedom to control curriculum, provided they conform to state standards. In other words, leave it up to each school to determine how its students learn the material state legislators deem essential.

And, fourth, give school administrators the freedom to customize a schedule according to the needs of the individual school, with class periods as long or short as necessary, and with teachers’ meetings built into the process.

Simply implementing these four freedoms produces critical results, Ouchi says.

“One metric, we have found, is more important than any other in determining school success,” he notes, “and that’s ‘student load.’ One of the benefits of implementation is the resulting reduction in this metric.”

Student load is the number of students assigned to each teacher. In New York City, the typical high school teacher has five courses of 37 students each; in Los Angeles, it’s 40. As Ouchi points out, no teacher can grade 200 reports or tests and produce substantive comments on each one. “Teachers with that many students simply can’t engage in a productive way with each student,” he says.

But schools (and districts) that offer principals the autonomy to budget their own money and hire their own staff see significant reductions in student load. Typically, the reduction is drastic, down to between 55-60 students, a total that mirrors numbers at elite private high schools. The second critical result follows: the lower the student load, the more students stay in school and the higher test scores rise; over time they climb 30 to 50 percent.

By Ouchi’s calculation, six of the largest 10 school districts in the country are implementing – or are attempting to implement – programs that include his research tenets. These districts include New York, Chicago, Houston, Los Angeles, Clark County, Nev., and the state of Hawaii.

Big Changes in the Big Apple
Chancellor Joel I. Klein, head of the New York City public school system, is no stranger to challenge. As assistant attorney general in charge of the U.S. Department of Justice’s antitrust division, he led landmark cases against Microsoft, WorldCom/Sprint, Visa/Mastercard and General Electric. His mandate as chancellor was to reform the largest public school district in the nation. His tenure began in July 2002 and his reforms have been largely successful.

Since coming on the job, Klein has utilized Ouchi’s research, and relied on the Anderson professor as a trusted consultant.

“When I was appointed chancellor, I started doing a lot of reading in the field, including some articles Bill had done,” Klein explains. “I found that he was focused on school autonomy and the leadership of principals. Once we started doing the work on our first overhaul, I met with Bill about how to improve our schools.

“Bill understands organizational theory and the alignment of incentives – and the effect of those on human resources and on an organization’s culture. This was critical to me, because, in my view, if you have the wrong organizational culture you’re not going to succeed. What Bill deals with goes to the heart of reform.”

Klein’s efforts in New York focus on three principles: leadership, empowerment and accountability. He offers principals performance agreements with measurable targets and then gives them the authority to meet their goals. School leaders control their own budgets, choose which administrators they work with and decide which other schools comprise their “network.”

It’s all designed to move authority from a behind-the-lines central administrative source to the educators in the field. And it’s all straight out of the Bill Ouchi handbook.

“Bill understands how to align organizational structures in ways that lead to innovation and differentiation, and that begins with more authority at the school level,” Klein says. “Organizations that succeed have an alignment between authority and accountability.”

The New York chancellor’s relationship with Ouchi is ongoing. Most recently, Klein asked the professor to look at how dollars follow students through the school system.

“Right now, budgets go to the schools,” he says. “We’re now starting to look at whether or not dollars actually flow in an equitable fashion based on individual student need.”

To that end, Klein has appointed Ouchi to his advisory committee on Weighted Student Formula, the next phase of his reform. It should be noted, meanwhile, that all of the work Ouchi does for Klein is pro bono.

Closer to Home
In Los Angeles, Anderson alumnus Marcus Castain (‘98) says he also sees how Ouchi’s research has informed the public debate on school reform. Castain is the associate director for education, youth and families for Los Angeles Mayor Antonio Villaraigosa, whose term kicked off with a controversial pledge to take over and reform the Los Angeles Unified School District.

The LAUSD is fighting the effort, but Villaraigosa’s office continues to move forward.

"We would like to see more decisions move from the central bureaucracy down to the school site,” Castain says. “Resource and staffing decisions should be decided by a strong principal who is working in concert with teachers and parents.”

Castain cites the LEARN movement, which Ouchi chaired, and the Los Angeles Annenberg Metropolitan Project (which also featured involvement by Ouchi) as reform efforts whose principles still resonate to many educators and parents in Los Angeles.

Running With It
Ouchi can be – and often is – critical of the politicians and bureaucrats whose thinking he hopes to transform. But he is gratified to see school reformers apply theories he introduced, whether he is credited with or involved in their implementation.

“I help anyone who is serious,” Ouchi says. “But when an idea gets traction, I lose control of it. It becomes an idea that people run with and they don’t necessarily need me. I just hope the fundamental concepts withstand the variations that will be brought into the implementation.”

At the most fundamental level, Ouchi’s provocative work is raising questions. The August 2005 All-Academy Symposium presented in Hawaii by The Academy of Management Journal explored two key issues. First, do management scholars have something to contribute to the subject of school reform? And second, have management scholars done enough — not only in the area of public education, but regarding public policy issues in general? On hand to discuss were Ouchi; Richard Riordan, former mayor of Los Angeles and former secretary of education for California; and Hawaii Governor Linda Lingle, among others.

Subsequent to the forum, The Academy of Management Journal commissioned a series of papers on the subject, noting that “Professor Ouchi’s work is so unusual and raises so many pertinent questions about the role of management research in contemporary society” that the AMJ editorial team asked 15 scholars to comment on the panel discussion. Each was asked if management scholars should become more involved in public policy and how this would best be accomplished. The scholars’ work was published and summarized in a special issue of the journal.

As of now, Ouchi is planning a new treatise on schools. Then, he says, he’ll close the book on that subject. He’s not sure what’s next … but if you’re concerned about health care policy in this country, rest assured that a certain chaired professor at a top-ranked school of management is looking into it.

About UCLA Anderson School of Management
UCLA Anderson School of Management is ranked among the top-tier business schools in the world building the next generation of leaders for institutions across the globe. A faculty ranked #1 in “intellectual capital” by Businessweek and renowned for their research and teaching, highly selective admissions, successful alumni and world-class facilities combine to provide an extraordinary learning environment.

The mission of UCLA Anderson School of Management is to be a global leader in advancing management thought and practice through education, research and service. Established in 1935, UCLA Anderson provides management education to more than 1,600 students enrolled in MBA, Executive MBA, Fully-Employed MBA and doctoral programs, and more than 2,000 executives and managers enrolled annually in executive education programs. UCLA Anderson alumni number more than 35,000 graduates around the world dedicated to continued networking, professional development and educational activities.

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