Like many educational leaders who are familiar with books on leadership and management, I am greatly indebted to Jim Collins’ Good to Great (New York: Harper Business, 2001) for my understanding of how to take an organization to the next level. In this #1 bestseller, Collins identifies through longitudinal research the seven characteristics of business outliers who jumped from good to great while their comparison peers did not.
A few years later, Collins wrote a short sequel, this time targeting a nonprofit audience, entitled Good to Great and the Social Sectors (2005). In this monograph, Collins thinks through how the seven characteristics apply to nonprofits like churches, hospitals, charities, and schools. He is careful to note that the goal for nonprofits is not to pretend they are businesses, but rather, to become “great.” He writes, “We must reject the idea–well-intentioned, but dead wrong–that the primary path to greatness in the social sector is to become ‘more like a business” (1). The solution, he believes, is to leave modes of mediocrity behind and replace them with habits of greatness.
In this article, I will explore what Collins has to say about making the jump from good to great in schools. In particular, I will explore the first of five issues Collins suggests educational leaders might encounter as they seek to apply the seven characteristics of great companies in their schools. This is the issue of defining “great” and calibrating success without traditional business metrics.
Seven Characteristics of “Great” Companies
To begin, let me briefly define the seven characteristics of companies that made the jump to greatness in Collins’ research. Collins and his team studied twenty-eight companies, eleven of them qualifying as “great” companies in contrast to the other seventeen. To distill the characteristics, his team of researchers carefully studied what the eleven great companies all had in common that distinguished them from the comparison companies (7).
The results of the research are the following characteristics:
- Level Five Leadership: Leaders with a paradoxical blend of personal humility and professional will
- First Who, Then What: Getting the right people on the bus before finalizing the business model
- Confront the Brutal Facts: Unwavering faith in the future of the business coupled with the relentless pursuit of current reality
- Hedgehog Concept: Getting clear on the core business through reaching the center of three concentric circles (see below)
- Culture of Discipline: A work culture blend of integrity, humility, ambition, and entrepreneurship
- Technology Accelerators: The careful selection of technology to advance the company
- The Flywheel: Trusting the slow process of doing the right things to build momentum over time
It is interesting to think that the secret to greatness could be boiled down to seven relatively simple characteristics. And yet, this is exactly what Collins and his team discovered. Of course, applying these principles is easier said than done. There is a reason why the companies he studied were true outliers. But the silver lining is that any organization, including schools, can increase effectiveness and get on the path to greatness through the careful study and implementation of these organizational characteristics.
Five Issues for Social Sectors
With the business framework of Good to Great in view, let us begin to think through how the seven characteristics might apply in social sectors, like schools. When engaged in this task, Collins observes five issues that tended to come up in light of the difference between for-profits and not-for-profits (3). Here they are:
- Defining “Great”: Calibrating success without business metrics
- Level 5 Leadership: Getting things done within a diffuse power structure
- First Who: Getting the right people on the bus within social sector constraints
- The Hedgehog Concept: Rethinking the economic engine without a profit motive
- Turning the Flywheel: Building momentum by building the brand
In the remainder of this blog, I will focus on the first issue: defining “great” and calibrating success without traditional business metrics.
Defining “Great”: Inputs and Outputs
In business, the outputs for evaluating effectiveness are fairly straightforward: financial returns and achievement of corporate purpose. A business at the end of the day is evaluated by its financial margins. In the social sector, however, it is significantly more complex. You cannot measure the success of a nonprofit by the size of the budget, efficiency of expense ratios, or breadth of donor circles. To be sure, these can serve as helpful metrics for governance purposes, but they do not get at the heart at gauging whether the mission is being achieved successfully.
To evaluate “greatness” in nonprofits, Collins advises to make this crucial distinction between inputs and outputs. In the corporate world, money serves as both an input and output of greatness. Companies are evaluated both by how much money enters the company (the input variable), and, more importantly, how much money is produced (the output variable).
For example, if I were to start a snow cone company, I would certainly need an input of cash. The more capital I possessed up front, the more ice, syrup, and freezer storage I could acquire for production. The goal, of course, is the output of cash–how much revenue I can generate from sales. Therefore both monetary input and output play a key role in measuring the greatness of my snow cone aspirations, but especially monetary output.
Like my hypothetical snow cone company, an independent school requires an input of cash to cover expenses–items like payroll, facilities, and curricular materials. There will also be an an output of cash–the revenue generated from tuition primarily. But the difference between selling snow cones and educating students is that, for the latter, the tuition dollars themselves do not serve as the measuring stick for how well the school is achieving its mission.
Delivering on the Mission
So if money is not an appropriate output for measuring the greatness of a school, then what is? Surely there are ways to measure greatness. As Collins writes, “To throw our hands up and say, ‘But we cannot measure performance in the social sectors the way you can in business’ is simply a lack of discipline (7). So how do we do it?
For Collins, it is the effectiveness by which the nonprofit delivers on the mission and makes a distinctive impact. For schools, therefore, it is how effective the school achieves its mission of preparing its students for whatever kind of impact they hope to have in the world.
Still, measuring mission delivery can be difficult. To repeat, we cannot simply reduce mission effectiveness to a dollar amount. Collins advises nonprofits to use both quantitative and qualitative means, acknowledging that all measurement indicators are flawed to some degree. So quantitative metrics like test scores, faculty evaluations, parent surveys, annual giving, financial margins, and re-enrollment metrics can and should be used, but we must acknowledge their limitations in telling the full story. The key, writes Collins, is not to find the single perfect indicator, but to land on a consistent and intelligent method of assessing your output results and then tracking your trajectory with rigor (8).
Boards and leadership teams, therefore, need to get clear on what is meant by great performance for their particular school. What is the baseline for delivering on the mission? What are the big-picture goals and how do you know if you are making progress? These are the questions school leaders need to be asking.
Three Outputs of Greatness
Collins suggests three ways for nonprofits to measure outputs of greatness relative to their mission. “Superior Performance” measures the results and efficiency of the organization. “Distinctive Impact” gauges the unique contribution the organization is making to the communities it touches. And “Lasting Endurance” tracks exceptional results over a long period of time.
Applying this framework to schools, here is one way to put meat on the skeleton:
Superior Performance: Results and efficiency on the school’s mission
- Enrollment Over Time
- Student Retention
- Faculty Retention
- Annual Fund YTD Progress
- Stories of Student Growth
- Stories of Alumni Impact
- Alumni Survey
- Parent Promoter Score
- Inquiries Per Week
- Observations Per Week
Distinctive Impact: Unique contribution to the communities the school touches
- Like-minded schools visiting for inspiration and guidance
- Contagious families spreading the word about the school
- Alumni increasingly sought for leadership roles and perspectives at work, church, and in the public square
- Partnership with the local community
Lasting Endurance: Exceptional results over a long period of time
- Multigenerational families: Alumni enrolling their children
- Excellence sustained across generations of teachers
- Supporters donate time and money, investing in long-term success of the school
- Strong organization before, during, and after the Head’s tenure
In sum, to recalibrate the measurement of school success, educational leaders must think through the key ways they can measure mission effectiveness, distinct impact, and lasting endurance. How do these relate to the seven characteristics of “greatness”? Collins writes, “You can think of the entire good-to-great framework as a generic set of variables that correlate strongly with creating the outputs of greatness…Any journey from good to great requires relentlessly adhering to these input variables, rigorously tracking your trajectory on the output variables, and then driving yourself to even higher levels of performance and impact” (8-9).
Conclusion
Educational leaders must understand that endowment, revenues, cost structure, and income statements are input variables, not output variables, of school greatness. For schools to make the leap, boards and executive teams should think seriously about what variables they want to use to measure the degree of effectiveness in fulfilling the mission of their institution. It is difficult work to be sure, but the effort is worth it. There are generations of children awaiting to be equipped, and it is exciting to think that our schools can play a significant role in this transformative process for the glory of God.
