Saturday, December 4, 2010

Organizational Mediocrity

Why is it that mediocrity is a pervasive rather than an isolated trait in a company? Riding the 3 back to Brooklyn a couple weeks ago, I was struck by a flashy-looking ad campaign for Delta Airlines that took up half my car. The tag lines ranged from meaningless ("The only way up is up") to impenetrable ("Sleep is not a perk") to baffling ("Our newest international destination: California") to downright alarming ("An ounce of humanity can outweigh five hundred tons of metal," over a close-up of a jet engine during take-off—don't they realize that when you read "five hundred tons of metal" the first thing you think of is five hundred tons of metal falling out of the sky? Don't they realize that people contemplating trips through the heavens in giant combustion machines don't want to think about humanity being measured in ounces?!)

That Delta, a company with a lousy reputation and a history of poor service and financial instability, should plaster the New York City subways with such an ill-conceived ad campaign must be more than just coincidence; yet the direct relationship between poor publicity decisions in 2010 and lousy air-travel service for the past thirty years is hard to figure. It implies that the problem is somewhere deep in the structure of the company. It is not one or two bad executives; it is not one or two bad decisions—it is a culture of mediocrity, which a bankruptcy and subsequent reorganization have failed to eradicate.

JetBlue has also been running ads in the subways lately. The tag lines ("You eat the snacks. We'll eat the cost." "Watch TV while you work. We won't tell.") are clever, warm, and reassuring. They talk about the things you want to think about when contemplating air-travel: not 500-ton flying machines zooming up into the sky—but snacks, television, leg-room. Instead of the foreboding black-and-white photography of the Delta ads, JetBlue's friendly ad-copy is accompanied by colorful, stylized cartoons. Thus an airline whose service is excellent, whose employees are warm and helpful, and which consistently turns a profit also produces effective advertisements. At JetBlue, quality is endemic.

Really, I just wanted to write about those Delta ads, cause they crack me up—but there is an education tie-in here. If failure and success tend to be pervasive qualities of companies, then they are probably pervasive qualities of schools and school systems as well. I happened to read in the Times a couple days ago about the superintendent of the Baltimore school system, who has drawn criticism for shutting down 26 of the city's worst schools. Closing schools, the critics contend, just shifts the problem to other schools and fails to address the underlying issue—poverty. Of course, poverty and underfunding are a big part of the problem in America's worst inner-city schools, and no responsible observer would blame the schools for everything that goes wrong inside their walls, but the problem may also be organizational mediocrity.

If you talk to people who have worked in these schools—or read the numerous books that former inner-city teachers have written—you get the sense that mismanagement and inefficiency are deeply entrenched in some these schools and perhaps in entire school systems. At what point does it become more efficient to replace something than to repair it? In the long run, those organizations too large, too old, and too inflexible to be reformed will be replaced. Maybe the No-Excuses charter networks are already doing that.


  1. Most businesses fail in the first five years, which doesn't mean that the resources of which they were comprised are deficient, just that their model was somehow flawed. Are the servers at McDonald's better than their less successful fast food rivals? So with schools. Government, through mandates and subsidies, can ossify the absurd - the ethanol industry, or schools whose graduates can't read Stop signs. Not sure what the Finns are doing right, but the American way is competition if you want to turn out a competitive product.

  2. When I write that mediocrity seems a pervasive quality of certain organizations, I do not mean that the individual employees and other resources are deficient; indeed many of those same employees might be valuable assets in a more effective organization. I am suggesting that the culture and management structure of the company are bad; that they create an environment in which good resources are squandered, competence goes unrecognized, and initiative is discouraged. I think that anyone who has dealt with large organizations has encountered such cultures.

    Bad employees can be fired and a bad business-plan rewritten, but a bad company culture is difficult to alter. The individuals within the company propagate it, even as it stymies them. Culture, even organizational culture, is insidious; it defines us, empowers us, oppresses us, infects us; if we are part of it we cannot see it, and if we are outside of it we cannot understand it. Thus, sometimes an organization that consistently fails in its endeavors is better replaced than reformed.

    It seems to me that when you talk about competition, you are suggesting a particular way to reform and replace schools and to decide which is which. I discussed the impact of competition on school quality in a post back in July; my point then was that market forces are effective motivators only if the consumer is well-informed. Few goods are as difficult to assess as education (see my latest post) and we should not expect our consumers (parents and students) to pick good providers (schools) all by themselves. What will be selected by the market may not actually be good schools.

    With good assessments, of course, competition becomes more appealing, but there remain complications. First of all, to date, initiatives to increase school-choice—and thereby competition—have been ineffective in improving educational outcomes. Certain types of charter schools have been highly effective, but all evidence is that the formula for such success is a whole slew of pedagogical methods and school-design principles that have nothing to do with school choice. There is a certain amount of friendly competition within the No-Excuses movement, which may or may not be productive of better schooling, but there’s certainly nothing resembling market conditions.

    For a better example of market forces operating in education, we can examine for-profit schools. I don’t have a ton of data on these, but the data I have is unpromising. For-profit colleges frequently have higher tuitions and poorer results than their non-profit counterparts. According to this article, for-profit colleges graduate only 22% of first-time students enrolled full-time in a bachelor program; that's as opposed to 55% at public colleges and 65% at private non-profits. Medium loan burden for graduates of for-profit colleges, meanwhile is $31,190, as opposed to $17,040 at public colleges and $7,960 at private non-profits.

    I have even less data on for-profit charter-schools, which constitute about 20% of all charters. I do know that New York State has changed its rules over the past few years to ban for-profit charters, because of concerns over abuse. Governing authorities in Ohio recently sued the state’s largest for-profit network, White Hat Management, over misuse of public funds. Also, it’s worth noting that the major success stories of the charter movement—KIPP, Uncommon, Achievement First, Green Dot, the Village Academies, etc.—are all non-profits.

    Please consider the possibility that education is not a widget, and that the market forces that can lead to great efficiency in the production and distribution of widgets cannot do so in the production and distribution of education.