March 5, 2024
Background/Introduction
Most school leaders didn’t get into the business of independent schooling for the business. They got into it for the mission, for the students, for the sense of adding something valuable to the world, for the community that so powerfully grows in schools that change lives.
At the same time, someone has to mind the cash register at each school if it is to deliver its mission, create value for its community, and so on. Luckily, for school leaders without past experience in business management and development, there are ways to acquire proficiency about what a school’s business model is in general, and what your school’s business model is in particular, in about an hour. This article shows you how to complete a rough draft of your business model that is visually clear and easy to communicate to a team, a division, or a whole community.
If you remember the parts of a cell from high school Biology, you are ready and able to grasp this approach because any business, for profit or not, exists as a system of parts, functions and relationships that can be drawn out and intentionally adjusted.
Current condition
The winds of change blowing across the independent school world have been strong at least since the Great Recession. The challenges to many schools’ business models have been many, including rising prices for almost everything, a proliferation of schooling options in many markets, and the need to cover persistent tuition dollar undersupply with fundraising.
Combine this turbulent operating environment with the significant churn in leadership that most schools have experienced since Covid began, and we can see why there is often a lack of continuity and business experience in schools that creates pressure on the Board’s strategic vision for each school, to say nothing of the operational capacity to tactically execute the school’s strategy.
School leaders report being caught in a whirlwind of competing stakeholder demands and needs, including vast amounts of communication about a range of organizational issues and goals, including finances and the strategy implied by having a business model.
Goal
Communicating transparently, in varying degrees for varying audiences, about the school’s business model and how it works can remove significant uncertainty within a faculty, a Board, a parent body or a funding group. To that end, it behooves school leaders to develop a clear business model which can be explained to any stakeholder group in the amount of detail appropriate to that group’s location and place in the school community.
Having a widely understood and clear business model is necessary to align a school or a group within the school before starting deliberate improvement activities. Without a visible and easy to understand business model, a school is basically competing against luck — not what anyone wants. Leaders need to know what experiments to run on which parts of a school’s business model if their school is to thrive through the changes in their local market. To improve financial outcomes, and all the other important outcomes, a shared mental model is what allows leaders to maximize the brain power of their Admin Team, their Board of Trustees and any other friends of the school.
Countermeasure
School leaders are lucky that many other minds outside of schooling have focused on this problem and offer an elegant solution: the Business Model Canvas. I have used this tool since 2017 and recommend it highly for its ease of use.
By employing a visual organizer like the Business Model Canvas with an Admin Team or Board of Trustees, Heads and other leaders can create a common language for what is happening now with the business model and what to do next.
After developing and refining a draft of your business model with the Board [see next week’s post on a deeper dive into the BMC for schools] a Head can then begin talking about it and sharing it with other stakeholders, like faculty and staff. This allows leaders to streamline and focus conversations around spending priorities, target markets and operational adjustments — creating conditions for change making to arrive more easily because everyone can see it and understand how it works. When people can see the moving parts of an organization’s business model, alignment across an organization can improve and the trust that alignment creates can be more durably built.
One common antipattern I have seen, especially first-time heads, arises when the head wants to be polite to the Boards that have hired them and not seem ungrateful for the job. Because of this they may not want to share bad news about the underlying business model’s weakness or ‘fitness to purpose’ for the current market.
Action Plan
Before gathering your key stakeholders together, there are a few steps to consider and prepare.
- Get comfortable with the canvas’ parts and relationships
- Make your first draft of a complete canvas
- Show it to one other person and start explaining it to them
- Refine your canvas and your explanation of how it illustrates your school
- Begin opening up the conversation with your canvas as a focusing tool to other key stakeholders: what is working, what isn’t, what assumptions need to be tested or retested if they have sat for a while
- Use the canvas to guide improvement efforts, strategy pivots or strategy persistence, and all the other hard things heads need to lead and communicate about
Even though heads have so much on their plate, nothing lessens the leader’s imperative to develop and deliver a working strategy with the Board. Leverage the power of visual thinking and storytelling to create a shared story with the business model canvas. The canvas is meant to allow heads to worry alone about one less thing: their business model. The next post will also cover more discussion of each of the parts of the business model canvas and how to start taking action.
You may also be interested in reading more articles written by Simon Holzapfel for Intrepid Ed News.
