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Gerstner Signals I.B.M. Plan To Increase Focus on K-12 Giving

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New York

The nation's largest computer-manufacturing company plans to focus more of its corporate giving on K-12 school reform, its chairman and chief executive officer says.

The International Business Machines Corporation, which dedicates about $100 million a year to philanthropy, will put more emphasis on "true reform'' in its grants to education, Louis V. Gerstner Jr., the company chairman, said in an interview last week.

That emphasis comes as Mr. Gerstner, one of the most outspoken American C.E.O.'s on the subject of education reform, has set forth a blueprint for how to improve the schools in a new book, Reinventing Education: Entrepreneurship in America's Public Schools.

"The nation's public schools stand at a historic juncture,'' he writes. "They are moribund institutions because they are organizations hopelessly out of sync with the realities of modern economic, social, and political life.''

Mr. Gerstner, who led one of the country's highest-profile corporate initiatives in education during his previous job as the top executive at RJR Nabisco Inc., took over the reins at I.B.M. last year.

"I.B.M. has been a leader in education philanthropy for a long time, both in terms of money and equipment,'' Mr. Gerstner said last week. The interview in the corporation's building here was Mr. Gerstner's first in-depth interview on education since he joined I.B.M.

The walls of Mr. Gerstner's midtown Manhattan offices on the building's 40th floor are light gray, the carpeting a slightly darker shade. Combined with the plain, modern office furniture, it creates a sleek yet stark effect.

"We're not talking about a radical shift in the priorities of our philanthropic program,'' he said, "but a much more intense [emphasis] within our education program on true reform, as supposed to simply writing checks that support the status quo.''

Lessons From Nabisco

Mr. Gerstner began his stint as the chairman and C.E.O. of RJR Nabisco in 1989. That was shortly after the company was taken over by Kohlberg, Kravis Roberts & Company in the largest leveraged buy-out in U.S. history.

With Nabisco in need of an image as a good corporate citizen, Mr. Gerstner refocused the company's giving from a scattered range of issues to target precollegiate education, an issue that had interested him since the 1970's.

Under his leadership, RJR Nabisco unveiled the $30 million Next Century Schools grant competition, one of the largest corporate cash gifts to individual public schools. Between 1990 and 1992, it awarded three-year grants of up to $750,000 each to 42 schools. The money was seen as venture capital for educators to test innovative ideas. (See Education Week, June 10, 1992)

Whether RJR Nabisco will continue its support of K-12 education remains to be seen. Although the new chairman, Charles M. Harper, has pledged to fund the Next Century Schools through the program's scheduled end in 1995, the corporation dropped most of the RJR Nabisco Foundation's full-time staff and consultants last fall.

In Reinventing Education, Mr. Gerstner analyzes what RJR Nabisco learned from this experiment and how its lessons can be applied to help all schools improve. The book, published by Dutton, was written with Roger D. Semerad, the foundation's former president; Denis P. Doyle, an education consultant and senior fellow at the Hudson Institute; and William B. Johnson, the executive vice president at the public-relations firm Burson-Marsteller.

"From the beginning when we first started the Next Century Schools, we knew that these 42 schools were not the end objective,'' Mr. Gerstner said. "We were trying to create models that then would be replicated in other communities in other schools. So this book is very much an obligation we felt to that replication process.''

Frustration and Complacency

In the book's foreword, Mr. Gerstner writes that his interest in education reform "is not just philanthropic, it is fueled by intense anger and frustration as well.''

"What bothers me is we have a fundamental crisis in our society that has been recognized for over a decade,'' Mr. Gerstner added in the interview. He chooses his words deliberately--pausing to search for the right expression or phrase.

"What frustrates me is that we keep talking about it; we keep throwing money at it. But we refuse to see that the fundamental reforms take place,'' he said.

Complacency is at the heart of the problem, he said, singling out three groups for their failure to act.

"The first group--that is the most surprising to me, and has been for the two decades I've been working in education reform--are parents,'' he said. A key reason for their failure to get involved, he said, is that they have not been mobilized, and he blames the media's inattention to education.

He also faults universities. "While some have been providing outstanding leadership for K-12 reform, the vast majority simply absorb unqualified candidates and do what they can to provide some remedial training,'' he charged.

"Finally,'' he said, "there's the business community. ... Until very recently the business community has been talking a lot about the problem but has been engaged in the solution in a relatively superficial way, primarily by providing money, adopt-a-school, perhaps equipment.''

While such endeavors are all useful in Mr. Gerstner's opinion, they support the existing system rather than fundamentally changing it.

But he said he is pleased that there are "more and more businessmen and -women who are coming to the table of true systemic reform.'' He cited the New American Schools Development Corporation, of which he is a board member, as one example. NASDC is a private, nonpartisan corporation created by business leaders at the behest of President George Bush to foster "break the mold'' schools.

Mr. Gerstner praised President Clinton and U.S. Secretary of Education Richard W. Riley for creating "bipartisan continuity'' on education that has advanced the cause of national goals and standards.

New Strategy for Giving

As he begins his second year at I.B.M., Mr. Gerstner and his colleagues are beginning to examine what role the corporation should play in the reform movement.

"While American business has no place telling educators how to run schools, we have two very legitimate roles: The first is to say that the output of your schools is not good enough to do the work we need done; secondly, to roll up our sleeves, and provide some models of how you go about changing large enterprises that have ingrained work habits, cultures.''

In the past, I.B.M. has awarded education about 45 percent of its $100 million annual budget for giving, but most of the money went to higher education, said Stanley S. Litow, the new head of I.B.M.'s corporate-giving program and a former deputy chancellor and chief operating officer in the New York City schools.

Next fall the company expects to unveil a new giving strategy in which it will focus "more heavily'' on precollegiate education, Mr. Litow said.

It also hopes to play more of a role in bringing together top minds in education to brainstorm and plan.

"There's a huge opportunity to bring information technology into the classroom,'' Mr. Gerstner said, "and the biggest concern I have is not that it won't be done--because it will be done--but that we're going to create haves and have-nots.''

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