Value-Based Strategy for Christian Schools

As we reflect on the past 15 months of schooling in a pandemic, it’s easy to recognize that our decision-making has had a markedly different cadence than in years past.  In some ways, we have been able to use the crisis to accelerate necessary change.  As one Head of School told me, “it would have taken 18 months, $150,000 in consulting fees, and I would have lost half of my faculty if I would have made these changes without the pressure of the pandemic”.  Christian schools have fared incredibly well in this regard. The laser focus on our missions, the high degree of trust that exists in our institutions, and the tenacity on the part of our administrators and faculty have allowed many of our schools to provide an exemplary education during these times, especially when compared to many of our competitors.

However, the intensity of the pandemic has also forced us to ask much, much more from our teachers and our staff; these godly men and women have delivered, working harder than they ever have, and doing so without the expectation of any increased compensation.  At the same time, we have asked our parents and students to be content with less.  Parents are unable to be in classrooms volunteering; the bleachers of our gymnasia and stadiums cannot be full of families supporting our student-athletes, and our arts performances have often been scaled down and the audiences streaming rather than standing room only.  It is that combination of asking more of our employees and delivering less to our families that is dangerous in the long term.

At this moment, it seems that thinking through a simplifying strategy to optimize the experience our schools offer- to families and to our employees- is needed to ensure our schools are sustainable in the long run.  In his recent book Better, Simpler Strategy, Felix Oberholzer-Gee, the Andreas Andresen Professor of Business Administration at Harvard Business School, uses his observations from studying hundreds of business’s strategic management to theorize that “selecting fewer initiatives with greater impact” are at the heart of what he calls a value-based strategy.  He argues that simplicity will avoid burnout and result in a greater value and therefore a more sustainable organization. This strategy requires discipline and commitment to a framework of thinking that allows leaders to see possible strategic initiatives as “value drivers” for employees and “customers” in the context of the organization as a whole.  This framework will benefit Christian schools as we emerge from pandemic-influenced leadership and move into an era which provides greater satisfaction for our stakeholders and a more sustainable future.

In Oberholzer-Gee’s framework, success is achieved by creating value for customers, employees, and suppliers.  In our Christian schools, we are committed to our Christian mission and to ethical, Biblical principles in our practices.  Therefore, as we think about this model as it relates to our schools- the families who choose our schools and the employees who commit to our missions every day- we recognize that creating value for these groups is not just a good business practice focused on profit, but it is also centrally important to the ways in which we model Christ to the world.  The framework we can explore as a model for strategic management- one that avoids strategic overload- is simple:  create unmistakable value for our families by 1) increasing their “willingness to pay” (WTP), and 2) ensuring that our schools offer a high value for our employees by making work appealing, which reduces their “willingness to sell” (WTS). The more we do both of these things, the greater our margins become, and the more effective our missions can be.

 

Value for Stakeholders

Families

In a value-based strategy, organizations seek to increase a customer’s willingness to pay, or “the customer’s walk-away point:  Charge one cent more … and that person is better off not buying”.  No doubt, as school leaders consider sustainability and tuition increases, understanding this “walk away point” is paramount. We know that if a company increases the price without increasing the value of their product, customers simply will not buy the product.  But it is important to note that price and  WTP are not interchangeable.  We can easily recognize in our communities that tuition varies wildly at competing schools, and while a family may be willing to pay a premium for the elite prep school across town, they may not be willing to pay the relatively modest tuition of the faith-based school across the street, as the VALUE of product is more important than the PRICE.

So, how does a school increase WTP?  In this model, rather than thinking about “selling more,” a value-based strategy increases WTP at every step of their current customer’s journey by “earning the customer’s trust and loyalty,” which in turn has been shown to result in growth and more tenable margins. This might be a substantial shift for schools to make, as we often drive to increase enrollment gains by targeting a wider audience with our focus on attracting new families to our mission.  Many times we do this by adding more strategic initiatives to entice a wider range of families to consider our schools. Clearly, the cost to replace families who leave before graduation is high, both in terms of the admissions staff that recruits and walks new families through the admissions process, but also in the negative word of mouth that follows, which reduces, rather than increases WTP. So, it seems, having a greater focus on your current families’ value and ensuring your school is executing at a high level in those areas is the most crucial piece of the foundation for a healthy, sustainable school, which we know increases our families’ WTP. Knowing and marketing your value differentiators in a clear and compelling way will ensure we are attracting the families we will best serve, and as a by-product our organizations will encounter less resistance and our families will experience higher overall satisfaction.

 

Employees

In Christian schools, we recognize and even celebrate, that the people we have doing the work in our schools are our “secret sauce.”  Our model of education is inherently relational, and it works when each student is known, loved, and discipled.  It is also widely known that Christian schools and, in fact independent schools at large, compensate their teachers below that of their local public school counterparts. The National Center for Educational Statistics reported that the average base salary for a public school teacher was $57,900, which is over 30% higher than the average base salary of a private school teacher, $45,300.  However, as noted by the primary CESA Standard 3.3, “We pay teachers and administrators a competitive and professional wage benchmarked against other comparable schools,” and most of our schools are committed to continuing to increase salaries for our employees.

While we can certainly attribute some of the willingness of Christian school teachers to accept lower salaries to a deep sense of vocation and a commitment to the Christian mission, there is very likely more to the story.  This is where an understanding of the distinction of an employee’s “willingness-to-sell” (WTS) and their compensation is helpful. What the value-based strategy recognizes is that the joy and satisfaction employees derive from their jobs creates value for employees, and therefore compensation is just one part of an employee’s willingness to contract with an organization.  Therefore, creating value for our employees should be a central part of both our short-term and long-term strategies.

To create value, leaders must deeply understand what it is that their employees do, going beyond the job-description to their daily experiences- those things that bring them joy and those that also bring frustration.  While many of these value drivers might be professional in nature- better professional development, for example, there are others that might be tangential to an employee’s job description.  One example of this would be ensuring there is a great option for employees’ children on days when students are not in session but employees are on campus. Understanding the employee’s journey as a whole person- as mothers and fathers, husbands and wives, members of a church, AND professionals can increase the value of employment at your school by reducing barriers to job satisfaction and investing in those things beyond compensation that contribute to high degrees of contentment with and commitment to one’s job. In fact, when businesses clearly convey their core values, they attract the workers who align with those values, which reduces WTS.  Since most people would like to make more money, compensation alone can sometimes detract from a cohesive organization by attracting the wrong people.  But, being transparent and forthcoming about value propositions that exist outside of basic compensation serves as a selection effect, bringing like-minded people to your organization who will be productive, have a high level of job-satisfaction, and choose to stay. By attracting the employees you best serve, your organization will be on course to thrive.

To be clear, while underpaying the people in our schools is neither ethical nor the purpose of this argument, we can decrease employees’ WTS by thinking more broadly about the needs of our employees and providing them with jobs that they value which engage and satisfy them.  This total compensation model ensures our schools are attracting and hiring the very best people to execute our God-ordained missions.

 

Shifting to a value-based strategy

So, how do we move our organizations toward a value-based strategy?  Here are a few steps to begin the work.

  1. Be present and available, as this disposition personifies the value our schools place on relationships and community. It is crucial for our leaders, including the Head of School, to not just be visible, but be intentional in their interactions by making an effort to engage with students and faculty in the hallways, in the dining hall, on the bleachers, and in the audience.  This way they are known by the community and the community members feel known as well since the leaders are continuously seeking to better know and understand them.
  2. Utilize high-net promoter (NPS) families to develop a robust understanding of what your most loyal families value. If you are not measuring your net promoter score, now is the time to start. Then, after identifying your NPS families, talk to them to better understand the specific details of their experiences at the school and in the community to determine what they value and reflect on how these families’ values are aligning with your strategic priorities and investments.
  3. Walk a day…or several in your employee’s shoes.  Knowing what gives your employees the greatest joy and the greatest frustration will help you provide an excellent working environment, and therefore a better ability to execute the intricate mission of Christian schooling.  When we can both provide- and augment- the value drivers that make the very best mission-aligned employees choose to stay at our schools, our missions inevitably stand stronger.  When we know what our value differentiators are, we can better attract the very best talent to bring our missions to life.
  4. To avoid strategic overload, choose a small number of strategies to execute at the highest possible level. Understanding what our families and employees care about can allow leaders to choose clusters of related strategies that will increase value for our families, employees, or both.  Knowing that we need to avoid playing catchup with our competitors -that makes us more similar and forces price to become the differentiator- and instead focus on distinctiveness in the market by implementing strategies that create value for our families and our employees rather than deploying a wide range of strategies to make us more similar to our competitors.

In today’s crowded market, it seems to be counterintuitive that simplifying is the key to generating a higher value for our families and our employees. But as Oberholzer-Gee observes, “It’s an unfair advantage, really. Value-focused companies get to serve the very customers who like their products best, they attract talent that values the organization’s strategy and culture, and they boost corporate performance.”  This is what we are in the business of doing… boosting our performance in delivering  on the God-given missions of our schools.


 

wiensDr. Kathryn Wiens

Dr. Kathryn Wiens is the Executive Director of the Council on Educational Standards and Accountability and a Fellow at the University of Virginia’s Institute for Advanced Studies in Culture. Along with her teaching at Kennesaw State University, Gordon College, and Cairn University, she has done extensive research and writing on independent and faith-based schools as well as single-gender education. She holds a doctorate in education from Boston University. Having worked in both public and independent schools, Wiens has served as Dean of Curriculum and Instruction, Director of Admissions, Science Department Chair, and has taught chemistry and biology. Her publications include a book on single-gender education, multiple journal articles, co-editor of a book on school leadership, as well as the most comprehensive study done to date on Christian education.

 

 

 

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