Friday, February 04, 2011


Business model for Education -- A pipe dream

My entire career the boards of administration (mostly successful business persons) have been convinced that there is a business model for mass education.

They have never been successful but they continue to preach the possibility.

The difference between service in business and service in education is that there is no control over the top line (gross income, funding, endowments) in education -- regardless of the quality of service, the income to the school or district remained the same -- political.

Therefore the bottom line becomes the argument. "What has been delivered for the money available?" And what is left. In business, if expenses can be cut (people being the most expensive) the bottom line (profits) can improve without an increase in top line. In education political will determines the amount of money given to the top line. There is no profit motive because it is all gone when the service has been rendered.

Two premises must be defined:
1. When there are profits to be made then the business world is the most efficient.
2. When there are not profits to be made the business world fails.

If you have gone to a 5 star hotel, then you understand how effective the business world is when delivering services. The obvious observation is that there are no poor people there. They poor have no money to spend and therefore deserve no service (and it is great service).

So who delivers services that do not generate income? The government. The business world insists that if we had better civil servants (teachers, firemen, etc.) then schools would excel and be more successful. The problem is that the top line does not increase with greater service. If the government (business?) does not give more for better service (measured by whom?) than more cannot be paid to the "better employers". Then, the result is that civil servants will produce what they feel is necessary. Being fired for less sounds like a threat. To ask these workers to motivate is laughable. And believe me, motivation from the working class is short lived and shallow.

So there are two categories of service.

1. Service that can make you rich.
2. Service that is given by the government to those who cannot pay.

Mass education is only profitable at the post secondary level where schools can convince parents and teachers that their product is better than what the government can provide. Again, if you have the money you can take advantage of these schools (if it really is an advantage).

There is one thing all business world individuals agree upon.
If you can't make money while serving, then discontinue the service. Here again is the reason for government feeding the top line.

It is more than understandable that those in government want to cut "entitlements" because they are the non economically producing segment of our population. So they are labelled "free loaders", "lazy", etc. so that they can be labeled as not having value worth supporting. In this way, the poor can be written off as not deserving any support from the business community.

So in politics, the business types (congress) want to cut entitlements because those that are served "have no money".

Solution: the middle class and poor need more money to oil the machine. How do they get money? The cards are stacked against them. It is time to re-distribute the wealth in some manner. The wealth has been moving to the top for too many years. If the poor get too poor and see the wealth at the top -- Egypt

The only arm of the poor and middle class against the powerful elite is to unite and force wealth into the middle class. Unions?