An Interview with J. Puckett: Achieving Less for More?

Aug 1, 2012 by

Michael F. Shaughnessy –

1) First of all, tell us about yourself, and your education and experiences.

I have been with The Boston Consulting Group (BCG) for 23 years and have been a strategic advisor to leaders in many organizations, across the public and private sector. I founded BCG’s global education practice in 2005, and have led the practice for the last seven years. I have worked closely with educators and other leaders in K-12, higher education, and vocational education, as well as with leaders of foundations and intermediaries that serve the educational sector. I have a BS in Computer Science and Religion from Duke University and an MBA in Finance and Management from The Wharton School.

2) Now, how much time have you actually spent in the classroom as a teacher?

I have not been a classroom teacher.

We do have former classroom teachers on our teams that support most of our education projects. In addition, we work closely with local educators in all of our consulting assignments with schools and districts. Since 2005, we have worked on over 200 assignments in the education sector, including many in US K-12. We have supported efforts in many urban districts (e.g. New Orleans, Dallas, Los Angeles, Chicago, Cleveland, Philadelphia, Shelby County TN, Hillsborough County FL, Seattle), states (e.g. Delaware, Illinois, North Carolina), and at the US Department of Education.

3) Tell us about this organization and briefly summarize the report.

The Boston Consulting Group (BCG) supports the needs of educational systems around the world, tackling the key drivers of improvement in education. We cover all major educational topics and works with every type of educational organization. BCG is a global management consulting firm and the world’s leading advisor on strategy and transformation. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Founded in 1963, BCG is a private company with 77 offices in 42 countries.

In Achieving More for Less in U.S. Education with a Value-Based Approach, I, along with BCG Education practice experts Reggie Gilyard, Lane McBride, Jeff Shaddix, and Adam Swersky, examine an approach that has the potential to improve student outcomes in an environment of declining resources and higher demands for results. Known as a “value-based approach,” this is a simple framework for increasing the effectiveness of budgeting and decision making in education systems around the world. The value-based framework aims to maximize the impact of available funds, recognizing the tradeoffs inherent in spending decisions across the portfolio of current and proposed expenditures, while maintaining an unflinching focus on learning outcomes among students.

The value-based approach can work in one of two ways: by holding costs constant while improving outcomes or by freeing up funds that can be spent somewhere else. The essential “value test” that district leaders and policymakers can apply to any proposed initiative is this: “Would you be prepared to cut costs or end other programs to pay for it?”

4) Spending seems to have doubled- now let’s get specific- are we spending more on teachers, computers, laptops, books, or ADMINISTRATIVE OVERHEAD AND COSTS?

According to the National Center for Education Statistics, we have seen K-12 per-pupil expenditures more than double over the last 40 years, when adjusted for inflation. In inflation-adjusted dollars, we were spending just over $4,000 per student in 1970. Today, it is well over $10,000 per student.

Ask any school district administrator, and they will tell you that costs in all requisite buckets have increased. The rub here is that while costs are increasing at such a rate, we simply have not seen most states, districts, or schools change how they operate. We still run schools mostly as we did several decades ago, without adjusting to new technologies, new approaches, and new research. As a result, student performance is still where it was four decades ago. Spending may have more than doubled, but student achievement has remained stagnant for nearly a half century.

5) “Student Performance the Same “? Is it really? Can you really compare current student performance to what was being learned in the 1960’s, 1970’s , 1980’s and 1990’s?

These are comparisons that are made by the U.S. Department of Education. According to the National Center for Education Statistics, math and literacy test scores for U.S. students at age 17 have remained flat since the 1970s. Each year, we look to results from the National Assessment of Educational Progress, our Nation’s Report Card, and fail to see the needle move when it comes to student achievement.

Further, the United States continues to fall in international rankings. Among the countries measured by the Organisation for Economic Co-operation and Development (OECD), the United States fell from 23rd place in mathematics in 2003 to 31st in 2009. As we remain stuck, performance wise, the industrialized nations around us are posting real improvement.

6) Taking this a bit further, it seems that there are more and more kids with special needs being serviced than ever before. IS THIS WHERE the additional costs are?

Students with special needs are definitely one piece to the rising costs of K-12 public education in the United States. It also serves as an important area where the value-based approach should be applied. Every dollar that is spent on public education should be assessed based on the impact it is having, particularly the impact it is having on student performance in the classroom. As demands for special education resources, ELL resources, and such increase, our schools and our students would greatly benefit from value-based decision making.

7) AND, there always seems to be a disconnect between Washington and the States, as well as the states and the local schools as to exactly how many kids with exceptionalities are out there- did your report consider the ever growing number of kids with special needs?

There are indeed disconnects between Federal, state, and local authorities, and resource allocation priorities are not always aligned across the entities. Frequently, there is too little attention paid to the connection between spending and outcomes.

In Achieving More for Less, we found that, over the years, some states have managed their funds better than others. When we compare the 10-year period ending in 1998 with that ending in 2008, we see that a top quartile of states in terms of spending efficiency saw every $3,000 of additional cumulative per-pupil spending led to an average increase of 1 percentage point in high school graduation rates. By contrast, a similar spending increase among the lowest-performing quartile of states was associated with a drop in graduation rates, according to our analysis of data from the National Center for Higher Education Management Systems and NCES. Or more simply, how you spend your money, and not how much money you spend, seems to have a greater impact on student performance.

This study looked at overall spending and overall performance. While we did not do a specific drill-down on special education costs, it is a topic that is worthy of pursuit. Looking at special education spending through a value-added lens would be a particularly interesting follow up.

8) How do you define a “ Value Based Approach “ and how will this work for children who are intellectually disabled, learning disabled, emotionally disturbed or who are deaf, or blind or have a head injury, asthma, diabetes or spina bifida?

Rather than focusing only on the level of spending or only on improvements in student outcomes, the value-based approach seeks to improve outcomes at the same spending level or even at lower levels resulting from budget cuts.

Taking a value-based approach means rigorously screening any proposed program, as well as the existing portfolio of expenditures. Questions include:

  • Does the potential gain from a new program compare favorably with alternative uses of the same funds?
  • Can spending differently in a particular area improve the value equation – for example, increasing class sizes of the most effective teachers and paying them more?
  • Are there areas of current spending that add limited value to students’ education – for example, in some areas of central administration? Would this spending deliver more value if it were reallocated to more promising programs?

The value-based approach is not designed to make a specific decision about a specific child. But the approach could be valuable in determining the overall direction of budgetary commitments for special education students.

9) I can hear the teacher’s unions now—Our teachers can improve student performance- simply remove the discipline problems that are violent aggressive assaultive and disruptive (or do you not believe that they exist?)

For at least the past four years, we have witnessed school districts, schools, and classrooms being asked to do more with fewer resources. We have seen a number of states engage in legal proceedings to increase a state’s commitment to K-12 education funding. And we have heard countless organizations state that if only we had more dollars, our schools would improve.

But we know from data across the nation that increased spending does not necessarily equate to increased student achievement. Instead, we all should ask how we can do better with our existing resources.

Strictly from a budgetary perspective, a value-based approach to school decision making has the potential for enormous impact. Maximizing the use of available funds negates assumptions that a bigger budget is the only way to improve. A value-based approach recognizes the tradeoffs inherent in spending decisions and calls on decision makers to continually consider the value that investments create for students as these leaders make spending increases and cuts.

If those school decision makers determine that addressing the discipline issue provides the greatest value to the school, in terms of student performance, the value-added approach would allow leaders to key in on that issue and make the choices that are best for all those in the school.

10) How can someone like me read the ENTIRE report and glean more information?

The full report can be found on the BCG website at: https://www.bcgperspectives.com/Images/BCG%20Achieving%20More%20for%20less%20in%20US%20Education%20with%20a%20Value%20Based%20Approach%20Jul%202012_tcm80-109653.pdf. Achieving More for Less is a short report, written to provide an overview of the topic of the value-based approach. It offers some valuable case studies of where the approach has been used in K-12 decision making and how it has been effective to date. This report serves as a strong starting point for probing how a school district can best make a value-based decision when it comes to budgeting.

Additional BCG reports on education can be found at: https://www.bcgperspectives.com/.

11) What have I neglected to ask?

The value-based approach is not a new idea. It is a concept that some leaders have successfully utilized, ensuring decisions are outcome-based, and not just process-focused.

In too many school districts and at too many schools, spending decisions are made based on history. We continue to spend because it is what we have done. That line item has always been in the budget or that program has been in a school for as long as anyone can remember.

With education dollars in scarce supply, “because that’s what we’ve always done” isn’t a good enough reason for determining how we spend. So much money is spent, and there are weak results for each incremental dollar. Value, and not history, should be our goal.

A value-based approach is not easy to implement. There will always be calls for more spending as a way to resolve conflicts. That is why any value-based program should tightly link savings to spending from the onset. Leaders need to communicate that tradeoffs can be very worthwhile.

Hopefully, this report ignites a discussion of a value-based approach to K-12 budgeting.

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