Excerpts from an interview by Leah Thayer
From the March/April 2018 Net Assets magazine
Net Assets: The Mastery Transcript is almost revolutionary in its goal of replacing the traditional grade-based approach to assessing high school students. What’s wrong with the old model?
Scott Looney: This is my 32nd year in education and my 30th in K-12 education, and every year I’m more convinced that we’re working off the wrong model. It’s a model full of wonderfully motivated, dedicated, hard-working people who are striving harder and harder, but the net outcomes are getting worse, in part because the world we’re putting kids into has shifted in so many ways.
For example, Hawken was founded in 1915 by a disciple of John Dewey to bring progressive education to Cleveland. For about our first 40 years, we were a progressive school. But as we got bigger — eventually becoming the largest independent school in Ohio — we got more traditional, swept up in the standardization movement and a sense of “we’re going to out-AP everyone else.” All of this has put high schools and students in a subordinate position with selective college admission deans. As admit rates drop, our kids are pushing out more and more applications, which forces admit rates to drop more. It’s creating a generation of neurotic perfectionists at the top of our academic scale.
Net Assets: What drove you, as a head of school, to take the lead?
Looney: When the Hawken Board of Trustees hired me in 2006, they were explicitly looking for a change agent. They realized that the school had drifted from its progressive moorings, and they wanted somebody to return it to those progressive educational ideals. The Hawken I inherited was a great school populated with terrific teachers, but it took some heavy lifting to really move in that direction. In my first two years, I turned over 25 percent of the upper school — faculty who either couldn’t or wouldn’t make those changes. It was hard, but we were soon getting traction and doing things that distinguished us as a progressive school, maybe even the leader in that effort.
For example, about seven years ago, we began exploring the idea of creating a second high school — a laboratory for achieving what an ideal high school might look like. Rather than making incremental change, we imagined taking a cohort of brave souls and building a completely new school, tabula rasa, that would benefit from the larger flagship school. Students would still be able to be on the debate team and perform in plays and have hundreds of peers, but they would have a completely different educational experience. I workshopped the idea with faculty, who approved it 60-40, and then with the board of trustees, who approved it 90-10. The board was more progressive than my faculty!
Our next step was to try to build a proof-of-concept for this ideal high school. We began by creating a three-credit interdisciplinary honors course called entrepreneurial studies, which provides project- and problem-based learning through direct apprenticeships with startup businesses. We very quickly realized that the traditional assessment system — letter grades and Carnegie units [a time-based standard of student progress] — was getting in the way of giving kids feedback that applies to real-world, problem-solving, group-oriented work. We realized that none of the elements of a traditional transcript made sense in our ideal high school.
Learn more about Hawken’s nationally recognized Entrepreneurial Studies Program.
The biggest problem is the oldest problem in education: efficiency. The more thoroughly you want to do anything, the less efficient it becomes. So our challenge is to create a way to assess high school students for mastery, but synthesize all of that achievement so that college admission officers can read it in two minutes or less. That’s the whole ball game.
Net Assets: How did you get started?
Looney: There are 37,000 high schools in the United States, so we assumed there had to be at least one that had something close to what we wanted. We hired a research company to scan the industry, and after two complete searches they identified that somewhere around 1 percent of U.S. high schools don’t necessarily produce letter grades, and there are almost none that don’t use Carnegie units.
So we started creating our own transcript models. I shared them with some college deans, and their reaction was, “This is really interesting. I can see why you’re doing it. We’re going to hate it.” I asked why, and they said, “We can’t stop everything just to train our admissions offices to read a unique transcript used by one school.” They said they would probably ignore it and just look at SAT scores and a teacher reference.
We gave up for a while until I ran into an Ivy League dean I know. I asked her, “What if I got 25 or 50 other schools like mine to go in with us — would you consider transcripts like this?” She said, “From schools like yours? Absolutely.”
Net Assets: What gave the effort momentum?
Looney: I spent six months calling 30 different independent school heads, begging them to come to a two-day retreat in Cleveland to explore the idea. Maybe 60 or 70 people came from 30 schools. When the retreat was over, 28 of the 30 schools signed on to the effort.
I also knew the EE Ford Foundation was offering a collaborative leadership grant of $2 million to encourage schools to work together. We got the grant, and because it required a match we set up our structure so that you could be a member, through annual dues, or a founder, through annual dues plus a one-time capital commitment. We now have $2.25 million of pledges from founding schools in addition to that $2 million of grant money.
Net Assets: When will the Mastery Transcript be ready?
Looney: This is going to be marathon, not a sprint. It requires a relatively sophisticated software platform that will cost between $4 and $8 million to build; that’s why we have to raise capital. The new transcript and the platform that supports it probably won’t exist for three to four years, and even then, most schools will introduce it to 9th graders. Basically, we’re six to eight years away from the Mastery Transcript showing up in college admissions offices.
Net Assets: What’s been the market reception within the independent school community?
Looney: It breaks down into three kinds of reactions. The most common is, “Wow, that’s a great idea. I wish my school would do it, but they never will.” They’re mostly watching and waiting, sitting with their arms folded to see how it plays out. The negative reaction is, “That’s crazy. What’s wrong with grades?” Many of these are unmovable. And the reaction that gets us members is, “Thank God. Finally.” In our first 10 months, we secured about 8 percent of the market share for independent schools.
Net Assets: Do you see adoption of the Mastery Transcript beyond independent schools?
Looney: Our goal is to open it up to all high schools, including public. Independent schools make up only 1 percent of all U.S. high schools. I think we’ve got a good shot at several thousand schools being part of our membership as soon as we develop a platform and transcript model that people can see and touch.
But I started with independent schools for three reasons, two of them pragmatic and one strategic. One pragmatic reason involved simply having a lot of friends in the independent school world. It was easy to convince them to come to the retreat in Cleveland. Another was the fact that independent schools, ironically, have a lot fewer variables than public schools do. We rarely use our independence.
The last reason was strategic. Independent schools have 1 percent of the total U.S. student body but produce 10 percent of the enrolled study body in Ivy League colleges and more than 20 percent of full-pay students in private colleges. We have a much bigger footprint than our actual size. The practical truth is that if we aggregate and tell colleges we are going to be presenting kids this way, they won’t have much choice except to work with us.
Net Assets: What impact will the Mastery Transcript have on schools’ operations?
Looney: Not much. We’re intentionally designing it so that a traditional school can offer the mastery assessment model as an option. We knew it would fail if we required schools to go all or nothing. You can even have kids take the exact same classes, with some of them being assessed for grades, some for mastery.
Net Assets: Let’s talk about Hawken’s merger with Birchwood School in 2016. How are things going?
Looney: Neither school’s enrollment has ever been this strong. Birchwood was this lovely little preschool-8 program on the west side of Cleveland, in a rented old parochial school building and with a tuition that is 50 percent of Hawken’s. They were kind of invisible because they didn’t have the money to really do any marketing. They had their first fall admission open house two weeks after we merged, and four times as many families showed up as ever before. By affiliating with Hawken, they got a pretty big endorsement and became much more visible.
Read about Hawken’s merger with Birchwood School (along with other school mergers) in “Stronger Together” (March/April 2017).
A little more than a year later, it’s going really well. We agreed that in order to keep Birchwood’s tuition down, they had to run a separate, balanced budget as a unit. If they ran a deficit, it would go on their books as a debt to Hawken. So they’re not really financially dependent on us, but they do get affiliation with our brand and a lot more administrative expertise.
Net Assets: What were your motivations for the Birchwood merger?
Looney: I believe the 50- or 60-year history of raising our tuitions faster than the rate of inflation is coming to an end. For about 25 years, the average income of the top 5 percent of the U.S. tracked identically with our tuition growth. Basically, we were not getting more expensive in real dollars for our core market. That stopped in 2002. The income growth of the top 1 percent kept going up, but the top 5 percent flatlined. This, combined with the fact that the public system is failing in many places, invited low-cost competitors to the markets. Many of these schools can do 70 percent of what the Hawken Schools do for 50 percent of our price. That’s super-attractive to many families.
In thinking about what this trend meant for Hawken’s future, we realized there was already one of those schools in Cleveland: Birchwood. It had a very high-quality academic program and great faculty but no frills — no co-curriculars, no after — school activities, a very modest building. We thought that if we were to start a micro school, it would look just like Birchwood, and it would be on the west side of Cleveland, the part of the city that’s experiencing the most growth among young professionals.
The idea first came up about five years ago, when I was having lunch with Chuck Debelak, the founder of Birchwood. He mentioned a long-held dream of making Birchwood a division of Hawken. I kind of filed it away until we were doing strategic planning and began exploring whether Hawken could compete as both a luxury brand and a value brand. There does seem to be proof that luxury brands can have sub-brands at lower print points without hurting the value of the brand mothership — examples include some automakers, state university systems and hospital systems. Even if the perception is that the satellites aren’t as good or as comprehensive as the mothership, somehow this doesn’t hurt the brand’s relative reputation.
Net Assets: Do you see more mergers and “satellites” ahead for independent schools nationally?
Looney: Yes, for a couple of reasons. One is basically economies of scale. The best academic programs are inefficient; they have lower student-teacher ratios, for example. The best way to find the money for these inefficiencies is through highly efficient business operations. As a 1,300-student school, everything we do on the non-instructional side is cheaper for us on a per-student basis than it is for smaller schools. In theory, this means we can redirect more money to instruction and teachers. So my ethical argument for becoming a satellite-based school specifically is that the bigger we get, the more each of our entities gets residual benefits they can redirect back to instruction.
Scaling up also creates more resilience. If you have five campuses, and one of them is struggling, they’re not just going to go out of business.
More broadly, there’s an inverse relationship between size of schools and attrition. On average, big schools have an attrition rate around 6.5 percent. For small schools it’s more like 15 percent. And it’s even worse in oversaturated markets, where the economy has shifted and there just isn’t enough demand for all the seats. Everyone is fighting over a shrinking pie. I can list 10 mergers that should happen right now, but politics and history and ego get in the way. There are schools that will go out of business before they merge. That’s really sad, but it reflects the challenges of ego and job insecurity. We really need a neutral third party to facilitate those marriages — a Match.com for school mergers.
Net Assets: Turning to staffing, you mentioned that there was quite a bit of turnover in your first few years at Hawken. What’s your approach now to hiring and retaining the best faculty and staff?
Looney: When the Hawken board hired me, I said that if I could only achieve two things in my entire tenure, most everything else would work out. The most important is alignment: getting everybody aligned around the school’s central mission and direction. Then it’s just talent. If you have a team of super-talented people who are mission-aligned, almost everything else is a detail. This has been an obsession for me. Now that faculty and staff are highly aligned our only real challenge is composition. Like all schools, we would like to have a more diverse faculty.
Net Assets: Prior to becoming a head of school, you worked in enrollment management. What changes do you see in store for this function?
Looney: We’ve got to pool our resources and collectively tell our story better. Each school spends a ton of money trying to tell its story, when in fact 80 percent of its story is the same as its competitors. If we spent more to articulate the value of independent education, everybody’s inquiry pool would go up, and only then would we fight over those kids. The biggest untapped market for private schools is people who don’t know enough about independent schools to know why we’re valuable. They get confused when they hear all these individual schools trying to tell that story.
The second thing — I’m still stunned by how many significantly underenrolled schools treat financial aid as real dollars. For them, financial aid is not real money; it’s just a discount on revenue. It’s terrifying to me that they don’t understand how to properly use discounts. Net tuition revenue — a strategy for variable pricing— is by far the most effective enrollment management tool there is. The only reason not to do it, in fact, is if you have surplus demand.
Read about net tuition revenue on NetAssets.org in “NTR: The Only Number That Matters” (Nov/Dec 2017).
Think about it: Other than schools and colleges, there is no other luxury service provider in the world that doesn’t discount pricing if they don’t have enough demand. The vast majority of our costs are fixed. If you’re a day school, basically those last marginal kids cost you lunch and school supplies. For example, we’re a 15-grade day school. If we happened to be three kids short in every grade, that’s 45 seats we could fill at half tuition. We would get 22 tuitions and 45 students who might bring in more diversity and talent and become alumni donors for the next 60 years.
Net Assets: Let’s look ahead. What makes you optimistic about K–12 independent schools?
Looney: The kids we’re educating right now. There’s a lot of critique around overly pampered kids, but the flip side is that this generation of kids — at least the ones I’ve worked with — have had more engagement and better relationships with their parents than any generation in the history of the United States. This group of parents has been very involved in their kids’ lives, and that’s helped create the nicest, most empathetic generation of kids that we’ve seen in a really long time. I think they’re going to want to do good in the world.
Download a PDF of this article.
Stronger Together: the Case for School Mergers
Net Tuition Revenue: the Only Number That Matters
The Innovative Imperative: Two Schools' Entrepreneurial Approach
2018 NBOA Annual Meeting: the Ambassador of New Learning: Yong Zhao
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