Trench fighting: former business leaders are trying to fix our troubled schools

Chief Executive, The, Nov, 2005 by Pamela Mendels

Back when Don Gaetz was running a health care company with annual revenues of $500 million, school buses were never an action item. But on a drizzly Friday this past August, the school superintendent of Okaloosa County, Fla., was preoccupied with a thunderstorm in the area and was planning to make sure the rain didn't disrupt student transportation on the second day of the school year.

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Gaetz oversees the instruction of about 30,000 students in 40 schools, working from a windowless office in an old school building--an unlikely setting for a businessman who co-founded Vitas Healthcare, the nation's largest private hospice company, and used to have an office overlooking the Bay of Biscayne.

But Gaetz, whose involvement in public education began when he grew concerned about the district where his children went to school, offers a quick answer to why he sits in a superintendent's chair rather than reclining in a hammock. "I became interested in what we could do to bring in business practices, not just to improve [school] finances but also academic achievement," he says.

Gaetz is a member of an unusual group that he--and other peers in the business world--would like to see expanded: top executives who leave the private sector to try to fix the broken K-12 public schools dotting the U.S. map in large swathes, particularly in urban areas. It's hardly an easy undertaking. "I don't think there are many tougher jobs than being a superintendent or chief executive officer of a large public school system," says Ken Kring, who has handled major searches for superintendents as a managing partner of Heidrick & Struggles, an executive search firm. "The multiple constituencies, the stakeholder base, the difficulty of resources, the performance gap and the challenges of meeting No Child Left Behind [the federal government's stringent public education law enacted in 2002] make for a pretty harsh setting."

Still, CEOs and senior managers alike have joined retired military officers, top lawyers and even politicians in recent years to become what are known as "nontraditional superintendents." That is, school officials who did not rise to their jobs through the ranks of public education. At any one time since the mid-1990s, there have been about a dozen such leaders, according to Bruce Hunter, associate executive director of the American Association of School Administrators, a professional organization. While that represents only a sliver of the 13,500 superintendents nationwide, their impact is outsized, because a number of them have led--and are leading--some of the country's largest school systems.

In New York City, for example, Joel Klein, former chairman and CEO of Bertelsmann (and onetime antitrust czar at the U.S. Department of Justice), today serves in the slot known locally as schools chancellor. Since 2002, Paul Vallas, who earlier leapt from budget director of Chicago to that city's widely praised schools chief, has headed Philadelphia's school system. And Los Angeles is home to Superintendent Roy Romer, the former governor of Colorado.

If a group called the Broad Foundation has its way, there will be many more such transplants. Several years ago, the foundation, based in Los Angeles, was established by Edythe and Eli Broad--founder of both AIG Retirement Services (formerly SunAmerica) and KB Home--to improve public education, and it set out to push greater management expertise and leadership skills into the senior levels of K-12 school systems. The group's Urban Superintendents Academy seeks to transform what it describes as "outstanding leaders" from the public, not-for-profit and business sector into outstanding school officials. A number of business people have been through the 10-month program.

The Academy graduated its first class of 23 in 2002, and already, Broad Fellows (as they are called) have parachuted into school systems. They obviously attempt to establish some business notions. In July, Broad Fellow Nate Levenson, a Harvard MBA and former CEO of North American Industries, a family-owned manufacturing company, became superintendent of Arlington, Mass. He wasted no time installing a well-known management technique: pay tied to results. At his request, his contract stipulates that his $135,000 annual salary be raised by 10 percent if students perform well--and cut 5 percent if they don't. "It's the best way to put my money where my mouth is," he says.

The executives-turned-education-leaders have a number of reasons for making the switch. Some believe that only an overhauled system of public schools can close the growing gap between the wealthy and the poor in the United States--a threat, they believe, to the fabric of American democracy. Others cite a desire to "give back," a repayment to society for their own good fortune in their work lives. "I always attributed [a successful career] to the strength of my education in the early years, and many minorities just don't get that start," says Gasper Mir, co-founder of a Houston public accounting firm who took a top post in the Houston school system.