The Responsibility Of Business Leaders To Public Education

James J. Renier, Ph.D.
Retired Chairman and COE of Honeywell

I'd like to add my welcome to the 17th Annual Meeting of the Minnesota Center for Corporate Responsibility, and to thank you for coming.

We're very pleased to have with us four well-experienced and distinguished corporate leaders to discuss corporate responsibility and education. I think I know them well enough to say their thoughts will be challenging.

I will provide a backdrop by beginning with a proposition I think we'll all agree on: healthy communities need productive companies to generate income that pays the taxes, pays salaries and supports local vendors.

The flip side is that successful companies need a good social environment - communities with efficient government, responsive public services, good schools and citizens who are productive, educated, self-sufficient and responsible.

In Minnesota, our workforce has helped make us successful in businesses that produce the greatest wealth. For example, in manufacturing, which demands brainy people and also produces the highest value-added, we rank in the top 20 states.¹ And the value-added of our high-technology manufacturing is nearly double the next highest category.²

We export close to a third of our manufacturing output and most of that consists of high-tech products.³ I don't think that it's just a coincidence that in 1993, Minnesota ranked 18th in the nation in value of exports⁴ and 18th per capita income.⁵

In the service industries that support manufacturing and exporting, our fast-growing jobs are not pumping gas and flipping burgers. They are high value-added jobs like computer programming, engineering, finance and communications.⁶

We have much to congratulate ourselves on. But we also have much to be concerned about. We have achieved a quality of life that is the envy of other states. But we are not immune to the social problems that infect other states.

In the past 10 years, the average income of Minnesotans has grown, but so has the number of us who live in poverty. During the 1980s the number of people in poverty increased by 16 percent. Of course children are always the most vulnerable,, and since 1985 childhood poverty in Minnesota has gone up by 20 percent.⁷

An important reason for the increase is that during the same period the number of children living with a single parent increased by more than 50 percent. That is caused at least in part by the fact that at the age when men normally marry, a forth of Minnesota men earn less than the poverty level for a family of four.⁸

Homelessness in Minnesota has increased by two-thirds in only six years. And the number of children who are homeless has more than doubled.⁹

The rate of violent crime in Minnesota has been growing almost twice as fast as the national average¹⁰ and of the people who wind up in the nation's prisons, about two-thirds are high school dropouts.¹¹ That's one indicator that an effective preventive of social problems is a complete education.

It's a Minnesota tradition that education is the ladder out of poverty and the life preserver for self-sufficiency. And in education we're recognized as a national leader. When the British minister of education came to observe American schools recently, he came to Minnesota.

But again, while we have much to be proud of, we have much to be concerned about. Minnesota education is not living up to its reputation.

That should surprise nobody, considering what is happening to Minnesota children. The Minnesota Business Partnership found that teachers report that an increasing number of children come to school with learning disabilities; that underachievement is spreading and student depression is increasing.

Although the drop-out rate for the nation had improved in the most recent study, it has grown worse for Minnesota.¹² The latest report shows that the 4-year cumulative drop-out rate for the class of 1995-96 is an alarming 21 percent.¹³

I'm sure many of you have noticed the result. In the Twin Cities half of employers say that today's job applicants do not have adequate skills in reading, writing, and math. Half also report that they lack the decision-making and problem-solving skills that are needed in today's business environment.¹⁴

Minnesota education can't coast along on its reputation - not if we want to create and maintain competitive businesses and successful communities. Superior education is perhaps the principal reason Minnesota is headquarters for 33 companies on the Fortune 500 list - on a per-capinta basis, we are fifth in the nation.¹⁵

We have not "bought" these businesses. New legislation on workers' comp has just been signed into law, but that's like water running up hill - Minnesota is not known for bending over backwards to please business. Yet business likes Minnesota - only 17 states have a higher industrial output. ¹⁶

Consider two business-friendly states that have about the same population as Minnesota: In one of them, corporate and individual taxes are less than half of ours and in the other they are only one third. Still, both of these low-tax states have a substantially smaller gross state product than Minnesota and both have realized slower production growth in the 10 years from 1980 to '90.

While some companies have left Minnesota, the majority have chosen to stay rather than going where taxes are lower. The obvious reason is that our skilled workforce has made it more productive to do business here. We invest a third more in public schools, per student, than the other two states.¹⁷

Educations pay high dividends. Department of Education data shows that a 10 percent increase in educational attainment increases workforce productivity by 11 percent, while a 10 percent investment in plant and equipment raises productivity by only four percent.¹⁸

Minnesota business people are consistent supporters of the schools. The Minnesota Business Partnership found that all but 10 of its 96 members companies have school programs going.¹⁹

They include mentoring, adopt-a-school programs, training for teachers, and business orientation for students. And they're fine - they can be encouraging to teachers and stimulating for students who take advantage of them.

But except for a few, they are academic programs which focus primarily on improving classroom instruction and educational equipment. Business people wish that improved academics would improve education. Then we could concentrate on a nice, neatly-defined, self-contained problem and solve it.

That's the kind of problem we like in business, too - but how many do you find that actually come that way? Not many - business problems are a lot messier than that. And problems are not a bit simpler in education.

The result is that the three most important problems in education have gotten too little attention - although they are, in fact, problems that are familiar to you in a business context.

The first is governance - that is, what it takes to run the business effectively.

The second is process optimization - getting quality with efficiency and cost control.

And the third is the customer - in education they are the parents.

Governance

In the governance of education, the major obstacle arises from the social dislocations that have created widespread learning handicaps. Society has not accepted responsibility for them. Instead, we have loaded the schools with students' personal problems and a growing agenda of human services. And that agenda, opens the schools to terrible political pressure.

Hardball politics now backs everything from sex education to religious observance, and from depression counseling to exclusive concentration on the three Rs.

School boards are besieged by special interests of every persuasion. Single-issue zealots are harassing boards, and political haggling shortens the tenure of board members. The turnover is now estimated to be a fourth of members every year.

One superintendent told me he now attends more than 50 board meetings a year. How'd you like to run a company with a board meeting every week?

A number of school superintendents have told me this is the most serious problem they face. It is a leading cause of short tenure of superintendents, which is now estimated to average less that 3 years in the large city schools that have 30 percent of all students.

The worst example may be New York City. When Ramon Cortines resigned as Schools Chancellor the other day, after two years in office, the city lost its sixth superintendent in 12 years.²⁰ In a school system with nearly a million students and a budget of more than $7 billion,²¹ that's a fast track to oblivion.

If we want schools to accomplish their educational mission, we have to stop pulling school boards apart and hassling school administrators and teachers to point where they simply cannot do their job.

You can help by getting to know your school board and school officials, and giving them your support.

Your companies can help by encouraging employees to run in school board elections. We used to do this as a matter of policy, but most companies have grown away from it. It is time to reinstate the policy.

In addition we should lobby the legislature for more power for school officials. This could help superintendents and principals stand up to the political pressures they're facing.

Process Optimization

The second challenge is process optimization - and on this subject you are experts. I expect all of your companies have instituted programs to improve quality and efficiency.

To get quality in education, you do the same things you would do in business. You standardize the input at a high level. You introduce new systems and improve existing systems to increase productivity and quality. You measure the quality of the output, and keep tuning the process to keep quality high and improving.

There was a time when the education process had a standard input. The system was built at a time when families could be counted on to send children to school ready to learn - ready physically, emotionally and intellectually.

That's no longer true, but cities everywhere are coming to understand the problem and how to fix it. Programs like Success By 6 - here and in 120 other cities - are working hard to help communities prepare every child to learn.

We're working on ways to standardize output, as well. An ongoing program of the State Department of Education is developing standards and measuring methods for students achievement. Pilot studies for the new Graduation Rule have been underway for a couple of years.

In the process phase, the experience of business people can be invaluable. Your experience in cost control and improving efficiencies can provide important leadership. The creativity you have had to apply in your job has a lot to offer in the job of administering schools.

Charter schools represent that kind of creativity, and the first one was opened in Minnesota. Now they're popping up everywhere. We need the same kind of leadership in teacher certification, new funding systems and other administrative innovations.

I hope that many of you will elect to participate in some way. Your local school system is a good place to start.

Customer

Now I want to say a few words about the customer of the education process - the parents.

In the whole process, they along with their children are the most important element. That becomes clear when you realize that schooling and education are not synonymous.

School is five hours a day for 179 days a year. But education is a 365-day, 24-hour process. It includes all the steps that parents take to nurture and develop and motivate children, preparing them to learn and providing guidance and encouragement.

So an important step to improve education is to adopt employment policies that enable working parents to participate fully in their children's education.

We all know how a job can stretch you out. When you add family responsibility to that, it gets to be a real pressure cooker. That's life for the 7 out of 10 Minnesota mothers who have children younger than six and who work outside the home. Seventy percent of children under 18 have both parents or the only parent they know in the labor force.²²

The Bureau of National Affairs describes their situation this way:

"Working parents find themselves entangled in a tug-of-war between their desires to be successful, productive employees and their commitment to being competent parents. ...it's a no win situation."²³

Perhaps you have seen the report on Work and Family that was published recently by the Center for Corporate Responsibility.

The report notes the competition in the market place and the demand of investors for greater and faster profit. This pressure often brings longer working hours and wrecked family routines, plus the insecurities of down-sizing, re-engineering, and reassignments. However, the study finds that thoughtful companies can make it easier for employees to resolve conflicts of work and family.

This helps companies accomplish two things in their own self interest. First, companies are most successful when employees are emotionally and mentally prepared to be productive. Second, healthy families are an important part of the answer to education problems, the issue that concerns business people so much.

Any discussion of education reform should also include changes the schools must make to become more family-friendly. For example, teachers conferences have to be held when parents can get there.

The point is that schools and parents have to work together. If schools are barriers to that, they have to change. If businesses are a barrier, they have to change.

Families look a lot different today. But whatever form it comes in, the family is still the best way - in fact the only way - to prepare children to learn and keep them in school. Many families need our help, and business is the catalyst that can create community action to provide it.

You've all heard me talk about New Vistas, our high school for teenage mothers at Honeywell headquarters, so I won't go into detail about it. But I do want to make two points:

First, the babies of the students are just as important to us as the students themselves. We see the school as a way to help the parent, that is the s student, give her child a decent start in life.

Second, business was the catalyst - it happened only because business took the initiative. In the public sector, the political booby-traps, the public questions and budget problems alone would have taken years to resolve.

But with business initiative, participants were brought together, problems were discovered, answers were found, and working together we got underway.

Helping business leaders become effective change agents is an objective of the Minnesota Center for Corporate Responsibility. A program for businesses to promote parent involvement in education is now being organized. It has a research piece that will help us determine where attention is needed most critically. And it has a participation piece in which CEO's will be invited to become a school principal for a day - and then to follow up by helping to design and action plan and getting it underway.

Then plan will provide a route that each of us can take to apply both time and energy most effectively to an enterprise that we urgently need. I promise we'll be calling on you as details of the program are mapped out.

Again, thank you for giving us your time and your interest today.

1. Statistical Abstract of the United States, 1994, Table 689. Gross State Product in manufacturing is $22 billion (1990); second place is a tie between Finance-Insurance-Real Estate and Services with $17 billion each.

2. Minnesota Department of Trade and Economic Development, Compare Minnesota: An Economic and Statistical Fact Book 1992-1993. High technology industries value added equals more than $6.2 billion (page 31).

3. High-tech goods are two-thirds of manufacturing exports. Minnesota Technology Magazine, First quarter 1992, page 6.

4. Statistical Abstract of the United States, 1994, Table 1326.

5. Statistical Abstract of the United States, 1994, Table 669.

6. Minnesota Business Partnership, Enhancing Minnesota's Economic Competitiveness, 1992, page 6.

7. Kids Count Data Book 1995.

8. Childrens Defense Fund, Minnesota Office, "You Should Know...", May 1995.

9. Center of the American Experiment, A Minnesota Index of Leading Cultural Indicators, 1994 page 11.

10. Center of the American Experiment, A Minnesota Index of Leading Cultural Indicators, 1994 page 1.

11. Bureau of Justice Statistics, Survey of State Prison Inmates, 1991.

12. Kids Count Data Book 1995. Most recent report is for the year 1992.

13. Minnesota Department of Education, Data Management "Information on Minnesota School Dropouts 1992-93."

14. Minnesota Business Partnership report, Transformation: What Minnesota Business Needs from Education, 1993, page 4.

15. Minnesota Department of Trade and Economic Development, Compare Minnesota 1992/1993.

16. All data from Statistical Abstract of the U.S., 1994. State taxes Table 479. State populations Table 26. State gross product Table 688.

17. U.S. Department of Education, Digest of Education Statistics 1993, Table 164. Figures reported are for the school year 1990-91.

18. U.S. Department of Education, The Other Shoe: Education's Contribution to the Productivity of Establishments.

19. Minnesota Business Partnership, Business and Education: A Necessary Partnership, 1991.

20. New Your Times, June 16, 1995.

21. National Center for Educational Statistics, Digest of Education Statistics 1993, Table 91.

22. Kids Count Data Book 1994.

23. The Bureau of National Affairs, Inc. "Implementing PSPs" (Parent Support Programs).

James J. Renier's speech on "The Responsibility of Business Leaders to Public Education" was given before and MCCR Annual Meeting on June 21, 1995. Dr. Renier is Retired Chairman and CEO, Honeywell Inc. and Chairman, MCCR Board. MCCR thanks Dr. Renier for giving his permission to present this speech.

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