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Comment by Henry Levin

Schools operated by for-profit educational management organizations (EMOs) have been around for only a decade. They were established with strong optimism about the potential of business solutions to problems in education, in a climate of acute concern about how to improve poor educational results for urban youth. It was argued that in contrast to the failures of public school bureaucracies, business acumen and incentives to succeed would provide innovation, intense focus on educational achievement, more efficient school organizations, and superior results. Venture capitalists were attracted by the promise of making inroads in an industry accounting for hundreds of billions of dollars a year and the assumptions that large profits could be extracted by eliminating bureaucratic waste. A decade later, it is clear that these early expectations have not come close to fulfillment. The industry has lost hundreds of millions of dollars, and as Steve Wilson reports, the evidence on academic effectiveness of EMOs is scant.⁴⁶ Although Wilson also discusses one not-for-profit organization, the heart of his analysis is concentrated on the for-profit EMOs.

Wilson's analysis is innovative in two ways. First, he has interviewed executives in the major EMOs to get a picture of the obstacles they encountered in their quests for success. Second, he uses this information and other insights to suggest directions for renewal and potential future success of the EMOs. To my knowledge, his is the only study that has sought information from key officers in the EMOs as a means to understand the effect of management organization involvement in education over the past decade.

Inherent Conflicts

Among key findings from Wilson's interviews are themes that have not emerged in the past. The most interesting of these, for me, is what Wilson calls the leadership challenge. It is a dictum of educational reform that strong and proficient school leadership is at the heart of an effective school. The educational literature suggests that leadership is premised not only on the personal attributes and skills of the principal but also on his or her commitment to ideas about what works, based upon experience and research evidence, and willingness to seek continuous improvement.

Educational management companies face the difficulty of selecting school principals who are entrepreneurial and willing to take risks but are also willing to adhere religiously to the rules, procedures, and school design that define the school's brand identity. As Wilson aptly notes, the hiring of school principals who accept blind allegiance to every company practice and regulation is not consistent with the entrepreneurial, risk-taking, improvement-seeking model of school leadership. This conflict is so fundamental that Wilson refers to it as a "paradoxical requirement" that has not been satisfactorily resolved and has created continuous problems in finding good school management.

In large measure, this conflict arises from the principal's requirement to address the needs and concerns of his or her clients—students and their parents—while simultaneously attempting to maintain the site-to-site uniformity and consistency required by company policy for brand-name schools. Meeting client expectations in a consumer-driven market often requires some adaptability to demonstrate responsiveness to perceived educational needs. For example, decades of experience with nursery schools has shown that it is difficult for brand-name or corporate chains of preschools to eke out market share when competing with large numbers of small, individual schools that are highly personalized and thereby better equipped to address family concerns. The mom-and-pop operations inspire considerable loyalty from their students' families because of personal relationships with teachers and administrators and school practices that they believe meet their needs.

Adaptability of educational practices to local needs and preferences, within an overall philosophy, is a prominent feature of such markets. For example, Montessori schools have a specific philosophy of child development and education. Personnel must be trained and certified by approved Montessori agencies, and schools are monitored to meet Montessori practices. Yet...