Is Downsizing the Route to Rightsizing or Capsizing?

Central offices are a favorite political target. Often seen as the obstacle between effective schools and failing schools, central offices have been termed "bloated," "tradition bound," "bureaucratic," or worse.

In some Colorado school districts, the response to these claims has been to downsize central offices. Downsizing proponents see it as a way to be more fiscally accountable while moving the locus of decision making to school sites. One major consequence is a reduction in force focused on district-level administration.

Downsizing, a buzzword adopted from corporate America, refers to "reducing the number of employees through attrition or layoffs in an effort to operate within a target budget." While the phenomenon is fairly new to public education, American corporations have been plagued by wave after wave of downsizing. Five of every six companies have downsized in the past decade, according to a Laborforce 2000 study, yet The Wall Street Journal has reported, "Corporate downsizings have failed to produce what was expected."

Two-thirds of the companies that downsized one year did it again the next year because the process set off a downward spiral of reduced sales and profits. Business and industry now acknowledge that corporate downsizing has its repercussions. Mitchell Marks, author of the 1993 work Building the Competitive Work Force, said downsizing exacted an especially "heavy toll on organizational effectiveness and employee wellbeing" that led, in some instances, to the onset of what has been termed "corporate anorexia," and a psychological phenomenon called "layoff survivor syndrome."

To better understand how restructuring and downsizing of school district central offices evolve, we conducted a multiyear study of selected school districts. The primary study sites were four medium-sized school districts in Colorado that have been under pressure to downsize for several successive years. These districts are characterized by annual budget cuts, increasing enrollments without parallel increases in funding, stability in the position of superintendent, and boards that have not succumbed to extreme conservative elements.

We reviewed documents and interviewed personnel in the central offices and schools. In addition to the superintendent, we talked with central-office administrators, certificated staff, and support staff. At the school sites, we interviewed principals, assistant principals, and office staff. Planning documents and related office memoranda were compiled and reviewed.

Strategic Options

School districts used a variety of strategies to respond to pressure to balance their budgets and address public demands for a leaner central office. In selecting a strategy, school system leaders considered several factors: how long was the situation likely to last, where would the loss be felt the least, what likely would be the impact on classrooms, and how would the changes be perceived. One tendency with unforeseen consequences was for districts to delay cutting two areas: pupil/teacher ratio and teacher pay.

We observed a fairly standard and, in hindsight, predictable sequence to the options selected. One more adventuresome strategy was to immediately transform key structures and functions. This approach would begin by examining what currently is done, deliberately abandoning some things and developing entirely new ways of staffing and operating. Instead, the districts we studied instituted an evolutionary set of strategies on an annual basis as budget and public pressures continued.

Brief descriptions of these strategies are presented below along with examples of the tactics used to pursue each strategy.

* Strategy 1: Picking up "loose change."

Typically the first strategy involves reviewing all accounts. School districts, often through their fiscal services staff, begin the systematic search for unspent dollars in the previous six months to two years. A district internal audit group may be established to comb every line item for potential savings that will result in little or no change in actual service delivery. The decision then follows that those areas were not in need of the unspent funds. However, since 85 percent of most districts' budgets are spent on wages and benefits for staff, usually the loose change fund is limited and has only a one-year impact.

* Strategy 2: Instituting tighter budget control.

Strategy 1 is followed closely by implementation of new budgeting systems and procedures. In this phase managers are asked to find ways to save dollars but leave services intact. Tactics used here include purchasing new computer systems and implementing revised accounting procedures in an effort to gain tight control over spending.

Improved systems to keep track of funds encumbered and spent also are incorporated. One result is up-to-date and accurate-to-the-minute budget reports for administrators and the board. As one central-office administrator put it: "There sure won't be any more accounts with large sums of unspent money in them."

One school district hired a comptroller from business as a new assistant superintendent for finance. This person introduced a tight fiscal control system. Funds made available to school sites and the newly established budget management systems kept careful control over how funds were spent.

* Strategy 3: Rightsizing the central office while "holding classrooms harmless."

Once surpluses have been wrung out and a general tightening of services has occurred, real cuts must be made. After much discussion and elaborate planning by stakeholders, the usual next step is to cut the size of the central office.

One school district, despite significant growth in the student population, today has nearly 50 percent fewer central-office administrators compared with 10 years ago. In this strategy, similar to business, rightsizing really means downsizing. Tactics include offering early retirement incentives, reducing employment contracts from 12 to 10 months, leaving positions vacant, assigning additional professional duties to the remaining certificated personnel, increasing the responsibilities of long-term classified staff, privatizing support services, and using volunteers to fill in the gaps. In addition, these school districts tended to create and perpetuate myths about superhuman efforts on the part of remaining personnel.

* Strategy 4: Targeting the classroom.

If downsizing pressures continue even after Strategy 3, no choice remains but to make spending decisions that directly affect classrooms. For several reasons we believe this strategy should be implemented sooner than later. We identified a hierarchy of common cutbacks that affect the classroom.

Level I: Freeze or decrease funds for supplies, texts, and staff participation in conferences. Eliminate or reduce teacher aide positions to cover only essential supervision duties.

Level II: Increase pupil/teacher ratios. This not only results in larger classes (perhaps 25-30 elementary, 30-35+ secondary), but also eliminates special or low enrollment classes.

Level III: Freeze or roll back salaries through negotiations. While one-year freezes in salary were common, no district actually rolled back salaries. Also common was a freeze in teachers' base pay that permitted raises for a year's experience or additional graduate education hours.

* Strategy 5: Finesse back in the necessary.

Sometime after Strategy 3 or by the time Strategy 4 is implemented, the central office may acknowledge that "perhaps we cut too far in some areas." In

this strategy, a few functions and/or roles that were reduced or eliminated are restored. However, the case still can be made for budget savings since new staff will be hired at lower salary levels and be assigned a larger number of duties.

A related tactic is to bring back retired administrators to do specific tasks, e.g. coaching a first-year principal who is having trouble or guiding the planning of a project with an immediate need such as a comprehensive districtwide discipline code. An other tactic at this juncture is for the district to exert itself politically. One district worked with state legislators to modify the state school finance systems in ways that would get the district increased revenue.

* Strategy 6: Transformations.

When there is likely to be multi year pressure to reduce the budget, it may be wiser to transform how the central office does its business earlier rather than later. Thought must be given to how to reconfigure roles and functions of the central office. Consideration needs to be given to which functions and roles should be dropped.

If one assumes most central-office personnel already are overworked, with diminished operating resources it is not possible "to do more with less." New ways of organizing to do what is most important need to be developed and implemented.

Unconvinced Public

When central-office tasks and services are moved to the sites, principals often feel challenged to meet their roles relating to teaching and learning. Some practitioners and researchers have identified an erosion of broad-based equity as policy makers sanction "every tub on its bottom." For example, compliance mandates, particularly the related paperwork, do not always get addressed.

At the same time that many school districts strive to become "mean and lean," the public continues to believe that K-12 education is top-heavy. However, in our study districts, the latest round of demands for greater efficiency have not targeted central offices. In fact, in one district an independent evaluation suggested that a number of central-office roles be reinstituted, most prominently, to support curriculum and public relations.

Education policy makers, fascinated as they seem to be with strategies of the corporate world, might consider Peter Drucker's commentary on corporate downsizing when he suggested that he is "seeing way too many amputations before the diagnosis."

Judith Berg and Gene Hall are an assistant professor and professor, respectively, in the department of educational leadership and policy studies at University of Northern Colorado. Gerald Difford is an assistant superintendent in the Cherry Creek, Colo., School District. The authors acknowledge support by The Dan forth Foundation for their research.

The Human Toll of Downsizing: Sweet and Sour 

For personnel, the implications of downsizing at the district office and school site have two distinct tastes: sweet and sour.

Central-office administrators now see colleagues deemed peripheral or even passe. Site-based administrators see a shift in priorities and comradeship. Some see the golden ring of opportunity in the reconfigured job responsibilities; others scurry about to compete and not be found wanting in an environment that appears to hold no loyalties.

Among those who remain, an initial response to the newly reconfigured tasks and responsibilities is to adopt a superman/wonder woman mythology. This is characterized by a "can do" attitude demonstrated in 10- to 15-hour work days. In one district, an assistant superintendent voluntarily drives the snow plow at 5:20 a.m. to save overtime costs for regular drivers. Asked about his family's reaction to this schedule, he responds with a grin, noting, "They are asleep."

In the same district, the superintendent's secretary delivers student expulsion letters on her way home each evening to save the cost of certified mail. In fact, secretaries with experience frequently are asked to make administrative decisions. Their knowledge of past practices gives them insight into how to keep existing subsystems going as long as things are routine. Another survivor, a district administrator, confessed, "It's overwhelming and a compliment that they think you can do so much. But there is a reason no one says it is not working--fear. A lot of good people aren't here any more."

Multiple Expressions

Other survivors perpetuated this myth in alternative ways:

* "For two years we were all out three nights a week and worked Saturdays. Some Saturdays you'd find a long line at the copy machine. It's exhilarating."

* "Three years ago I supervised 15 principals. Now I have 45."

* "We have 20 supervisors for 600 staff. "I can't convey what it feels like to know there are needs out there (and) I'm notable to respond."

The duality of perspective affects principals, too. They feel "free," released from close supervision and able to make more decisions. On the other hand, principals suggest they feel deserted, unsupported, and vulnerable.

Here's how some site administrators put it:

* "A decision gets made at central and we're asked to implement it. But there's no one there to help, to question."

* "The quality of relationships principals now have with their teams ... everybody pitches in."

* "We've shifted from instruction to responding to the public."

* "The task load is frustrating. We're all going in different directions... We're constantly asked to leave the building."

The majority of site administrators say they feel "hammered," "bombarded" by issues while having "lost the charge." Although they still sense the mission, an equally palpable feeling of desertion exists. The central office's message is "we've empowered you, so handle it."

Privatization, the mantra for "lean and mean," also has a toll. Says one personnel administrator, "The specter of privatization sits over many heads. We are, for sure, abusing loyal employees." He notes that the remaining classified employees, custodians, bus drivers, and cooks are working harder, and receiving no raises. They know their jobs can be terminated at any time.

Temporary Euphoria

From district office to school site, athletic office to bus garage, there is a pervading sense of "things being out of control." People are "desperately asking for help, focus, centralized decisions." Some recognize growing emphasis on creativity and efficiency.

In the long term, several questions arise. When the euphoria of feeling super-able turn to hi burnout? Do staff retirements and resignations finally leave the organization with no internal memory to guide it? Will increased health costs result from the stress placed on the downsizing survivors? Will there more litigation due to overlooked procedures?

It's too early to answer these questions, but anecadotal evidence suggests that a common answer to these questions will be yes.

Strategic Maneuvers for Downsizing

Various tactics can help when you negotiate the narrow path between public calls for fiscal accountability and genuine efforts to move decision making to school sites.

Our research of school districts undergoing central-office downsizing identified ways that these districts carried out the strategies described in the accompanying article.

* Identifying "loose change." Comb maintenance budgets that often contain funds for several snow days, boiler/air conditioning breakdowns, and anticipated utility rate increases. One district found $900,000 in unspent special education accounts, $450,000 in transportation, and $300,000 in maintenance, all of which could be used to balance the budget with no service-level reduction.

* Tightening control. We also call this strategy "leaning the mixture." Tactics include watering and fertilizing only the grounds in front of schools and playing fields; prioritizing staff development budgets and funding only the most critical needs; consolidating bus stops; computerizing transportation scheduling to minimize route miles; and installing automated telephone systems.

* "Holding classrooms harmless." In one district, when the director of athletics retired, a senior secretary with 20 years of experience assumed the responsibilities under the mantle of "empowerment." Another district contracted with a third party to handle benefits administration. A district abandoned its centralized process for screening teaching applicants and turned the task over to principals and their staffs as part of decentralization. The sites now are directly responsible for recruiting and selecting new staff.

* Targeting the classroom. One district eliminated all classes with enrollments of less than 15 students, although advanced placement classes were preserved. At the elementary level, this district eliminated instrumental music but maintained art, music, and physical education since these classes provide planning time for regular classroom teachers. Another tactic: decentralize substitute teacher budgets through incentives to discourage sub-day usage.

* Going political. Legislative advocacy brought forth a coalition of the lowest-spending districts to argue their case of equity. Another coalition of districts, heavily impacted by low socioeconomic status, pleaded their case before the legislature on greater student need. Another group, labeled "hold harmless" districts, argued they had received no per-pupil funding increases for several years. The effect of going political was a rewrite of the state's school finance laws in which some districts gained at the expense of others. To the benefit of all, per-pupil funding was increased 2 percent for the current school year.

* Transforming. One district developed a new role for staff--a building resource teacher. A master teacher was assigned to each elementary and secondary school with the sole function of instructional leadership, including mentoring new teachers, staff development, and related functions. Their mission was to accomplish the work that had been handled by a cadre of traveling central-office consultants.