Those of us who were heads of school in 2008-9 probably remember all too well the pain of school downsizing and some may still bear the scars to show for it.

It was a tough time all around. And that’s what made it easier. The whole world was struggling and any particular school or enterprise or person was not alone. That context made the suffering of dramatic cuts/ shifts/ changes /re-allocations a little more palatable. In that sense, it was comparable to the wartime deprivations of UK food rationing. They were easier to endure because everyone was in the same boat. Furthermore, there was a clearly defined existential threat and shared purpose-driven by necessity: Fight back together or get invaded by Nazis and experience much worse.

These remain tough times for many independent schools and especially the smaller ones. Based on the data in the last NAIS Trendbook  – enrollment of 350 seems to be the watershed.

So – whether you’re doing OK right now – or just not making budget – it’s time to do something. In the first instance because it is prudent to look ahead and be ready for whatever’s next and in the second from necessity.

If it’s a budget gap and you’ve done all the quick fixes and you’re still got a way to go you have two basic choices: One is to look again at the budget and cut again. The other is to go to loans, reserves, and endowment – something that may be necessary but is ultimately akin to eating your own seed corn. A stop to funding depreciation and deferred maintenance can be a good quick budget fix but it’s not a practice that can continue forever. (To get a dose of cold water reality, figure out: All things staying as they are: How long have you got? )

In any event, you need a longer-term solution. Planning for downsizing in order to strengthen the solid base from which to then grow is one way to approach the problem. A better way to put that is right-sizing.

And it’s worth remembering that – luckily – you don’t have the ability to throw money at problems. That’s an advantage because it compels you and your team to be resourceful and imaginative. It allows you to move with greater agility and compels you to look hard at the underlying issues and seek real solutions that have a chance of being more creative and enduring.

So – what to do?

Step One

Talk to the Board Chair and then senior administration. Convene a small working group to identify, define and tackle the task of looking at options, prioritizing choices, and thinking through how to bring others into the process and communicate decisions made. Collect and look at the data from your school. Where are you spending the money?

Step Two

Double down on revenue sources.  And that probably means enrollment, enrollment, enrollment. Stay optimistic but clear-eyed about enrollment prospects by checking demographics, understanding trends, communicating your story effectively, and tending your reputation.

No reason not to maintain the hope of an increase in enrollment. And maybe you have specific reasons for that optimism. (School down the road closing, new marketing initiatives, massive neighborhood influx of best-fit families, investment in magic fairy dust about to pay off.) Even so  – best to stay cautious. Expanding expenditure later is always easy!

Step Three

Do what is simple and obvious and don’t hold off. Tackle the sacred cows and white elephants and all other mythical and actual beasts that are draining resources in ways that no longer serve the school and its mission. Take a look and raise the Why? and What for? and Do we really need? and Is there another way? questions. A fresh set of eyes from an outsider or recent addition to the team can be helpful with this.

Step Four

Decide to downsize. Refer to that as right-size because that is what it is.

Step Five

Is all of the above and everything else.

Some ideas to pursue if you’ve not exhausted all of them already.

• Think of the budget as the expression of your Mission. What is truly critical? What needs to go? What needs to shrink? What needs to be expanded?
• The needs of the institution should determine your decisions.
• Focus on getting better at what you do to deliver on your mission and your commitments to families
• Look at your financial aid policies. Switch the mindset from financial aid as an expense to financial aid as a revenue source and means to further your school’s mission.  What’s the impact of rebranding financial aid as flexible tuition?   What are the working number for average tuition revenue at various enrollment numbers? What accounting fail-safes do you need to keep an eye on when discounting tuition to enroll and build your school?
• Think of your assets – your people, your location, your campus and facility, your reputation, and the needs of your community. Any ways to do something interesting there? Evening, weekend and summer school. Become a “thought” center for something that you are known for and/or good at.
• Scrutinize the budget. Go back to Step One and the data you collected. Where are you spending the money? Is it all well spent? Scrutinize and question every line looking for opportunities to use your resources in better and more effective ways.
• Look at your structure. If your school has divisions – are the break points in the right places? Are there opportunities for changing the divisional structure to reduce administrative costs without losing divisional integrity and service to families?
• Employee changes. Do you need to replace those who leave or retire?  Could you continue core functions without them? Are there other options?
• Early retirement. Decide whether a once-in-a-lifetime retirement package – legally constructed – can enable people to make the decision to retire. Would that actually be helpful? Or would that deprive the institution of experience and expertise?
• Trim here and cut there  Can you do that without undercutting your promises to parents and perceptions of value? If you’re wise you long ago stopped promising small classes but rather intimate learning environments where every child is known and supported as an individual. Delivering on that may allow the freedom to vary class size without triggering outrage.
• Build in flexibility whenever you can. If your enrollment is unstable and unpredictable then the importance of organizational flexibility grows.  Flexibility can take many forms and it includes people, facilities, and the use of time. Individuals may have to take on different tasks and this can provide an opportunity for faculty and staff to work collaboratively and cross-train each other.  A drop in enrollment in X grade?  Does that mean undersized classes throughout that grade’s program? What can you play with to mitigate the impact of an under-enrolled class in terms of staffing as well as the student social group? How can this become an opportunity for students? How flexible are your teachers? How flexible is your schedule? How can you use your space to create agile options for classes and the potential for combining grades? Think through how you can truly see and communicate the advantages for students of such a program.
• Outsource key functions or bring them In-House. Sort through the opportunities for outsourcing and consider the potential savings, the alternatives and the impact.  Are there any outsourcing options that would be cost-effective and or add value? Conversely, does it make sense to insource some of these – enabling the school to retain good people and expand the scope of their responsibilities? Here’s a shortlist of areas to look at and assess: Cleaning, maintenance, grounds keeping, technology, transportation, HR, business, college counseling, learning support, psychological services, food, marketing, fundraising, security.
• Look at the Program. Do you need to offer it all? Is it all running as well as you would like? Could changes be made that enable the school to focus and shine? Small specialized classes are expensive. Are online options an alternative? Or a partnership trade-off with a neighboring school. (They do the B/C calculus you do the biology or the fencing class and ceramics.) Beyond that – what partnerships with other organizations, schools, and colleges would help broaden the school’s horizon as well as enable cost reductions? Who in your community can help with forging those partnerships?
• Textbooks Do you really need them? And what about the library budget?  Any opportunities there while not depriving students and faculty of the services and materials they need?
• Consolidation. Any way to consolidate staff functions and create efficiencies in areas like building reception and building security?
• Athletics. And what about that athletics budget. Take a long hard mission-driven look at that. (Professional refs and umpires for lower/ middle school games?) Any way to deal with that transportation issue?
• Benefits should be a big piece of the budget. Are your benefit plans right-sized, industry-standard and fair? Do they serve your employees well? What can you add that will not break the budget?  Annual financial investment advice session? Retirement planning help for those over 50? Exercise classes before and after school? Flu shots? Child care?
• Tuition remission benefits for children of faculty and staff. Are they right-sized, industry-standard, and fair?
• Professional development How might you maintain high levels of professional development expectations at a lower cost? Are you making the best possible use of internal and local association resources and online options? Do you have internal professional growth structures like Critical Friends Groups, instructional rounds, study groups, focused lead-and-learn teams. Any way to work with other schools to share events, workshops, speakers, and presenters?
• Review the program. What could be dropped? What should be dropped? How to focus on and double down on the programs at the core of the mission and let the others go. Where are you on the philosophy spectrum and where do you want to be? Use this as an opportunity to move along the line in the direction you want.
• Part-time school. Homeschooling on the rise. Find ways to connect and offer a menu of part-time enrollment or evening and weekend options for classes like advanced lab science, the arts, drama, choir, orchestra, rock band, Model UN and team sports.
• Become known for something. Become a “thought? center for something mission-consistent.  Think of ways to generate revenue while bringing the community onto campus beyond the spring festival.
• Start or expand revenue-generating summer, evening, and weekend options. Be the answer to your community’s problems and needs. Put your buildings and facilities to work and keep them busy. To what community problems is your school the answer?
• Dream up big, bold out-of-the-box options including those which may initially seem out of the question, impossible, and quite bonkers: Sell or lease school property; merge with a competitor; open a satellite campus regionally or abroad; open up part of the facility as a workspace for start-ups and entrepreneurs; open a day center for the elderly; build a dorm; change who you serve – go co-ed or specialize in learning issues or the arts; offer different diplomas; grow an apprenticeship program; use your school’s reputation for educational excellence as leverage.
• And – whatever else you do: Craft a credible vision of the future. One grounded in reality, that resonates with your community and conveys optimism and hope.

And – for whatever ideas you decide to pursue – figure out a plan for implementation that includes dealing with the human impact of the decisions you make and communicating them to your community. Don’t forget the alumni. Remember – every change is a loss and every loss must be mourned.

Some Final Thoughts

Perception of loss of program or cuts to services can be a killer – triggering the very death spiral you were hoping to avoid. So choose words wisely and communicate around strengths and the core is worth the investment of imagination and effort. And the truth is – it can be the truth!

We all know the threats to independent education as we have known it are real and growing. They include the shrinking middle class, rising tuitions in a time of economic anxiety;  worry about the future; competition from start-ups and low-cost/ no-cost alternatives; and the simple fact that the phone in your pocket gives what was – in earlier generations – unimaginable access to information and learning. So the pressure is real. The competition is fierce.

Concentrate on Culture

Your school culture should be your greatest asset. Make sure it is one that makes caring and community the heart of the enterprise. Figure out a free way to assess your current culture. Are you actually the place you say you are? (How do you know?)

Students don’t just want to enjoy school they want to belong and feel it is their school. Work to make that a reality and make sure it applies to everyone and not merely the chosen few. Creating community is really worth investing in. And the good thing is, once you get that engine cranking it can become just who you are and how you do business. 

Make sure that culture is about learning and that means understanding change is inevitable, new thinking is welcome, and that caring about each other is paramount.

That context and emotional milieu also include a growing understanding that the future world of work will be very different. Making the case for your school in such a time is not easy as any realistic assessment of the future means raising anxiety rather than calming concerns.

Above I urged you to put the needs of the institution first. I know that sounds like heresy to some but no one is served by your school grinding slowly into oblivion. Putting the school on a sound financial footing serves everyone.

These are tough and transitional times for schools of all kinds as we try to think into the unknowns of cyber systems and the ever yet faster pace of digital transformation.

So what about those kids? And what about their futures? What can we say for sure about what they need now in order to thrive in their future and not our past?  Building a case for your school around that idea has lots of potential. So as part of your rethinking, resizing, reimagining, and restructuring engage your community in discussion of questions like these:

1. What new skills, literacies, aptitudes, and dispositions will students need as they face the future and how will they thrive in a transformed work world?

2. How do we develop an entrepreneurial and resilient, problem-finding, the solution-seeking ethically-driven mindset in our students?

3. To what extent are we helping students discover, develop, clarify and articulate their strengths and passions and connect those interests and predilections with the needs of the world as we find it in order to pursue meaningful and rewarding work?

4. Is our school a happy place? For whom? Can joyful be an organizing principle for learning in your school? What does that look like? 

Do the discussions lead to any considerations of things you should stop doing? Are there any redundant programs or out-moded practices and approaches? Think Strategic Elimination.

The Risk Factor

As with anything radical, there are risks and potential downsides.

Among the risks are these: When experienced employees leave you lose valuable specialized knowledge and expertise. This can create gaps that remaining employees may struggle to fill particularly if workloads increase. This limits the time they have to learn new skills, try out new ideas and go the extra mile in delivering on the mission. Change can be a relief but it can also be unsettling, leading to a drop in morale, commitment, loyalty, and trust. This can have a long-term effect weakening the institution’s capacity to keep moving forward.

Work hard to mitigate those risks. Think too of the risks of inaction. What happens if you just hope for the best and do nothing?

Rightsizing that is seen as a series of cuts and reductions to personnel and services can be a powerful negative factor for students and parents. Families can begin to wonder whether you are worth the tuition and employees feel insecure and stressed. To head this off figure out low-cost and meaningful ways to offer people more. What do faculty need to help them do their jobs better? Ask them. Go back to your HR benefits package. What can you add? Look at the list in the bullet above. What else can you do to show genuine appreciation and provide support?

How can you have parents feel more included and welcome in the school? Ask them. Deliver what you can. Surprise them with the unexpected. Create experiences that are welcoming and memorable. Like students, they want a school they can believe in and a school they can belong to. Work to be that school.

In the ideal scenario, right-sizing isn’t just about “doing more with less”. It’s about managing a situation that everyone understands needs to be dealt with for the common good. It’s about being better at what you do and hewing more closely to your mission. It requires work to future-proof the organization by creating flexibility, encouraging innovation, and improving communication.

The Why Precedes the What

So back to the process. Think of it in four stages.

Stage 1: The decision to rightsize. Why do you need to do this? What happens if you don’t? What alternatives are there? How seriously have you tried them? Are they realistic?

Stage 2: Planning the rightsizing program. Deciding what you will do in the short term and the longer term.

Stage 3: Communicating and creating common sense of purpose, necessity, urgency. Thinking through the impact on people.

Stage 4: Implementing the rightsizing program. What will you do when and how will you do it? Who do you need to help you minimize the agony and maximize the opportunity?

And take every opportunity to celebrate positive change and new thinking.

The featured image is a multiple of Dollar Sign by Andy Warhol 1981