Education on a National Scale

Published February 1, 2001

Although in a number of U.S. cities the teacher unions may rail against the privatization of public schools, two announcements from Edison Schools, Inc. last December showed that some local union affiliates are adopting a more participatory approach to the development of new models for the delivery of public education.

In Pennsylvania, Edison said it will submit a proposal with the two unions representing teachers and school support personnel to manage all public schools in the troubled Chester-Upland School District. And in Florida, Edison announced it will create nine new charter schools in partnership with the United Federation of Teachers in Dade County.

Edison also announced in December that it had been exclusively selected to pursue the process of managing five low-performing schools in New York City, with anticipated per-pupil revenues of approximately $10,000 per year. Last fall, the company began the management of its first entire school district in Inkster, Michigan.

Established by media entrepreneur H. Christopher Whittle in 1992, Edison opened its first four schools in August 1995. The company currently manages 113 public schools with a total enrollment of approximately 57,000 students. Through contracts with local school districts and public charter school boards, Edison assumes educational and operational responsibility for individual schools in return for per-pupil funding that is generally comparable to that spent by other public schools in the area.

Whittle first became involved in education while he was a student at the University of Tennessee in the late 1960s, when he started Whittle Communications, a publishing company that specialized in student magazines for the K-12 and post-secondary markets. Whittle’s involvement in student publishing continued after his graduation in 1969 and expanded into student broadcasting with the development of Channel One, which supplies student news to about 12,000 of the nation’s schools.

By 1989, Whittle’s involvement with students and schools prompted him to consider a more dramatic expansion, this time into student education, using the private sector for delivery. The Edison Project, as it was initially known, was established three years later, and Benno C. Schmidt Jr. was hired away from the presidency of Yale University to become the company’s chairman and chief education officer.

Although Whittle sold his communications company in 1995, he retained control of Edison and secured additional capital for the start of the company’s growth to its present 113 schools. Whittle recently spoke with School Reform News Managing Editor George Clowes.

Clowes: What is the basic thrust of Edison Schools’ approach to education?

Whittle: If you want to go to what I call the cornerstones of the concept, I think there are two. The first is that research and development is a critical part of making good schools, and that schools in the United States have largely been deprived of the benefits of R & D. The reason is that schools, for the most part, have been organized in relatively small groups.

There are 15,000 school districts in the United States and the average district has only six schools. Even the larger systems are relatively small by business standards. The result has been that there’s really very little R & D going on because most of these organizational units don’t have the scale to conduct meaningful research and development. One idea that Edison brings to this is to have a national system of schools in partnership with local entities, and to use that national scale to conduct ongoing R and D. That is a big piece of what we stand for.

The second thing that’s critical to what we do is the idea of national scale for another reason, which is the building of state-of-the-art systems to support these schools. So those are two things that have driven the development of the company at the system level.

In terms of the school level–meaning what is different and unique about our schools–I would recommend going to our Web site ( to see the features that each of our schools has. There we show the ten fundamentals behind our school design and show what makes the educational experience at our schools different from that in other public schools.

What we did from 1991 to 1994–and what we now do on a continuing basis–is to put together our school design, or what we think goes into running a good school. We looked at each aspect of schools and tried to identify “best practices” that are used in schools all over the world. We then assembled them into our school design. It’s not exclusively best practices, since there are things that we’ve created that didn’t exist anywhere else, but there are lots of best practices in our design.

We’re now the largest operator of charter schools in the United States, and we’re the largest operator for what we call contract schools, which is where we manage schools under contract in public systems. Contract schools are involved in both Chester-Upland and New York City, while in Miami we are dealing with charter schools. We only run public schools.

With charter schools, charters typically are not granted to us but to community groups, which then recruit us to manage the schools for them. There, we’re partners with the community group: They hold the charter, and we are their management company. With contract schools, we’re partners with the school district, which has recruited us to manage existing schools. With charter schools, we start from scratch. With contract schools, we convert existing schools to the Edison design.

Clowes: Some people contend that a profit-making concern shouldn’t be involved in education. Is that an issue?

The Ten Fundamentals
Behind Edison’s School Design
1. Schools organized for every student’s success.

2. A better use of time.

3. A rich and challenging curriculum.

4. Teaching methods that motivate.

5. Assessments that provide accountability.

6. A professional environment for teachers.

7. Technology for an Information Age.

8. A partnership with families.

9. Schools tailored to the community.

10. The advantages of system and scale.

Whittle: Though you hear this periodically, I don’t think it’s something that’s widespread. You may see it in commentary, but the great bulk of people aren’t concerned about it. With parents, it doesn’t tend to be an issue because parents are basically interested in whether the school is a good school for their children, and they don’t care whether it’s non-profit or whatever. Oftentimes, they don’t even know.

In policy circles, there is debate about whether it’s a good or a bad thing to have for-profit entities running public schools, but I would say that it’s a diminishing issue as people understand it more and more. They understand that it’s really not new, that for-profit entities have been operating in and around public schools for a century or more, providing virtually every service you can imagine, from food service to bus transportation to the building of schools, and providing textbooks, technology, and all sorts of training. The only thing that Edison does is to offer these services in an integrated fashion instead of piecemeal.

Clowes: How can privately managed schools achieve high student outcomes cost effectively, particularly in light of past increases in spending on public schools with little or no improvement in student achievement?

Whittle: First of all, I would agree that there’s no evidence that spending and outcomes are inextricably linked. In fact, if you look at 20-year data points on both spending and outcomes, there’s not a great correlation. Nevertheless, I do think that there are going to be demonstrations of a relationship between outcomes and spending, and I do think that education funding is going to have to increase if we want certain things to occur.

I’ll give you an example. The typical U.S. corporation spends on the order of $3,000 per year per employee on technology. That goes for hardware, software, communications, and anything related to putting a computer in the hands of an employee. Now, the typical public school spends about $100 per child per year on technology. Edison spends about $500. So, even though our spending on technology is five times what you’d see in a typical public school, it’s only one-sixth of what you would see in a typical U.S. company. There’s just no way that we’re going to have schools be part of the Information Age at the level of spending that we currently have. You just can’t do it.

At Edison, we’re doing the best we possibly can with technology, but our computers are on a five-year replacement cycle. Nobody in business has their computers on a five-year replacement cycle. When you look at the 24-7 service capabilities of most businesses compared to what you can do in a school, there are just long roads to go.

The average U.S. school today is spending in the zone of $6,500 per student per year. So, even in this one example, you can’t take half of that and spend it on technology. I think policymakers in the U.S. are going to have to confront a variety of spending issues on education if they really want our schools to get where they should be.

Clowes: So it’s not just a matter of more resources but also a matter of changing the way that resources are directed in the delivery of education?

Whittle: It’s that, but it’s in other areas, too. Let me give you another example. Average teacher pay in the U.S. today is somewhere around $35,000 a year. We as a country are going to have to confront what that means. We’re going to have to ask ourselves, “Is that number going to attract and retain the talent that we want in our schools?” The point I’m making is that we do have spending issues that have to be addressed. But I also agree with your point that if there are increases in spending, they’ve got to be directed to the right places.

Clowes: What is different about the way Edison organizes its schools?

Whittle: Our schools are more or less the average school size in the U.S., where there are 88,000 public schools and somewhere north of 45 million children. So you’re looking at school sizes of around 600, on average. We’re very close to that. We have 113 schools and 57,000 children, so our average school size is between 500 and 600.

There are two or three critical economic and structural differences between what we’re attempting to do and what is typically done. The first is that we’re trying to radically reduce the amount of administrative spending in education. Our target over the next few years is to get what we call our “central spend” down to 8 percent.

Our central spend includes not only traditional items like curriculum and assessment but also things that typically are not in school budgets, such as R & D spending, our marketing costs, and school start-up costs. Since we’re the fastest growing school system in the U.S., our start-up functions are quite significant.

Eight percent is roughly one-third of the 25 percent that you would see going for central spend in a typical U.S. school district. There are a lot of critics–and I think they’re wrong–who claim that the public schools are fat and bloated in terms of bureaucracy and that their central spend is as high as 50 percent. We have not found that to be the case.

If you go to the typical public school system, it actually is run rather leanly. The problem is that they don’t have enough scale to spread their central costs across lots of sites. It’s more of a structural issue than an issue of poor management.

So the first big structural variance is that we ramp down central spend. The second big difference is that we have dramatic spending in teacher training, in the professional development of teachers. I would guess that we’re spending five to seven times what you would see a typical public school spending on teacher training. It’s a huge part of what we do.

All of the training that we’re doing is very specific and relates to what we want to happen in our schools. It’s definitely not generic. It’s things that literally we would want our teachers to use the next day in their classrooms. And it’s not just for teachers. We have leadership training for principals, we do training for the secretaries in the front offices, and we run approaching 20 different national training conferences. We also are planning to open teacher colleges, which you should think of as a vertical integration of what we do.

The third big difference is significant spending on technology, not only for the students but also for administrative systems. The data that private companies have for assessing their operations just dwarfs the data that you see in most educational enterprises. In most large business organizations, you’ve got daily and real-time data to track what’s going on. Yet in schools, lots of children do not get formally assessed in core subjects even on an annual basis. You just cannot get the kind of results that you want with assessment data being received one or two or three years apart.

We just launched a national, monthly, electronic assessment system in our schools so that every child is assessed monthly in core subjects. Now, each teacher gets a report of how their children are doing against state standards on a monthly basis. The only way you can do that is with the technical infrastructure.

Clowes: What one message would you most like to communicate to our readers?

Whittle: I’m not sure that there’s just one. One message is that improving public schools is something that has to be viewed in a 20- to 30-year time frame. We’re not going to get where we want to be with quick fixes. There has to be serious systemic work done. For example, we’ve raised $400 million of capital in our first decade to invest in what we’re doing. It’s going to continue to require that level of seriousness to get to where we’re going.

A second point is that this is extremely difficult work. There are going to be failures and successes. We are generally very pleased with what we’re doing, but it’s hard and we’re in no way perfect.

A third thing is that although we are for-profit and a private company, we do view ourselves as a member of the public education community. I think we’re increasingly being seen that way, and the partnerships that we have developed with the teacher unions are indicative of that. We are conscious of the difficulties that all public educators face, and we let that be known. We don’t go around bashing.