Competitive Strategy for Public Schools

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Imagine the educational options that may be available for children in 2010.

  • Charter technology schools—private, but publicly funded (could also be funded by a software or Internet company).
  • Religious schools—private, perhaps publicly funded for secular curricula.
  • Charter cultural/ethnicity schools—publicly or globally funded schools for children whose parents want them to retain their heritage or learn about another.
  • Home schools—private, publicly funded, many selections from the cable/Internet channel. Instructional sites could be anywhere in the world, such as Sydney, Australia; Palo Alto, Calif.; or Bali.
  • Public-university collaboration—publicly funded for college-track 5-year-olds.
  • Private-industry charter schools—private, sponsored by business and industry alliances to produce "home grown" school-to-work information specialists.
  • Crafts-apprentice charter schools—public, designed to offset the shortage of electricians, carpenters, plumbers, and other craftspersons.
  • And, of course, the local public schools—publicly funded for the remainder of the school-age population.

Impossible? Hardly. With the rise of charter schools, school choice, and wireless communication, the reality of such a list is closer than many may think. Add to these developments the general concerns voiced by public officials about the quality of public schools, and the reality becomes closer still. It is clear, then, that leaders of public schools need to create a competitive strategy to survive the intense rivalry for dollars inherent in these diverse educational options.

Public schools no longer have a monopoly on public education, and to survive, they must compete more effectively. They must choose their strategy and develop congruent internal mechanisms to effectively implement that strategy.

Broadly speaking, schools may compete either on cost leadership or through differentiation. The nettlesome question is, what would it take for this generic competitive-strategy model popularized by the Harvard Business School's Michael E. Porter to work for U.S. public schools?

A school competing on cost leadership promises to offer standard education at a minimal cost. Characteristics of this school would include basic educational curricula (the three R's), large class size, low administrative component and other overhead costs, intensive screening of budget requests, and employee participation in cost-control efforts.

Public schools no longer have a monopoly on public education, and to survive, they must compete more effectively.

Efficiency is the primary focus in organizational decisionmaking at this kind of school. Management's role is to continuously standardize curricula and pedagogy and to install volume "resource procurement" strategies to derive economies-of-scale benefits. Management also will periodically re-engineer tasks and activities for efficiency, and will creatively tighten the value-adding chain to minimize waste. In public education, cost leadership may become the retrenchment strategy for districts devastated by a deluge of exiting students, taking their "voucher" funds with them.

On the other hand, public schools may find success by imitating schools of choice and charter schools through differentiation strategies. Differentiators create value for their products by distinguishing them from rivals'. They meet or exceed customer expectations for products and services offered. Differentiators may offer, besides the basics, specialized subjects, such as foreign languages, informational technology, business management, and global economics, all areas that have singular value for some students.

Schools may compete either on cost leadership or through differentiation.

Differentiation may be pursued using alternative themes—"Unconditional satisfaction or money back" (like L.L. Bean) or "More for your money" (like Wal-Mart). Schools may boast of technological leadership (like the 3M Corp.) or superior service (like Federal Express). They may use the "top of the line" image approach (like Ralph Lauren or Rolex). Or, they may just support a "different taste" approach (like Dr Pepper). Customization in subject offerings and flexible hours are additional ways of differentiating the product.

Tomorrow's successful schools will be built on the shifting sands of competition. They will consciously elect to compete for student and staff resources based on price or product differentiation. Choosing a strategy will require schools to analyze their internal resources, to identify an appropriate competency, and to select a choice that is congruent with that competency. Schools will systematically evaluate customer needs and, like businesses, make internal modifications to meet those needs. Essential to the success of tomorrow's schools will be administrators who understand and demonstrate strategic leadership.

During the early and mid-1990s, schools allocated a large portion of their resources to embrace strategic planning. They wrote mission statements, belief statements, and organizational philosophies for their schools. They scanned their external and internal environments using so-called SWOT analyses (Strengths, Weaknesses, Opportunities, and Threats) to gain insight into their terrain. Choosing a competitive strategy was not on the agenda. Now, with increasing globalization and the emergence of choice as a dominant theme in social and economic matters, schools must take that next step in strategic planning. Public school leaders must offer a choice to a public that demands it, and they must be able to implement that choice more effectively than their competitors.

Jan Hammond chairs the department of educational administration in the school of education at the State University of New York at New Paltz. Suzanne Tingley is the superintendent of the Sackets Harbor Central School District in Sackets Harbor, N.Y.

Vol. 19, Issue 25, Page 44

Published in Print: March 1, 2000, as Competitive Strategy for Public Schools
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