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The big U-turn.

Article Excerpt
In the 1990s Continental Airlines was struggling, even more than its troubled U.S. airline peers. As the company's then-president Greg Brenneman explained in a 1998 article in the Harvard Business Review (HBR), "Continental ranked tenth out of the ten largest U.S. airlines in all key customer service areas as measured by the Department of Transportation: on-time arrivals, baggage handling, customer complaints, and involuntary denied boardings." The airline had already been in bankruptcy twice, and was headed for a third round as its cash dried up. In 1994, Gordon Bethune took the helm, with Brenneman becoming president and chief operating officer. They staved off bankruptcy by renegotiating with their creditors. And they launched an organizational turnaround that proved remarkably successful, catapulting Continental from worst to best among big U.S. carriers.

By 1995, Continental was moving up on the Department of Transportation's (DOT's) performance measures (see Figure 1). Its stock price was soaring. And the turnaround stuck. The latest rankings by Consumer Reports place Continental first among the seven big U.S. airlines. Zagat's 2007 survey of frequent flyers found overall ratings for the big airlines were low and declining, with the "notable exception" of Continental. Continental was the only big airline, and one of only five overall, to be a Zagat Top Spot.

[FIGURE 1 OMITTED]

The mid-'90s were also a time for change in New York's police department (NYPD). As W. Chan Kim and Renee Mauborgne describe in their 2003 HBR case study, "Turf wars over jurisdiction and funding were rife. Officers were underpaid relative to their counterparts in neighboring communities. ... Crime had gotten so far out of hand that the press referred to the Big Apple as the Roten Apple." In response, then-mayor Rudolph Giuliani hired William Bratton to lead the NYPD, fresh from a string of successful turnarounds of other agencies, including NYC's transit police.

Though crime rates in NYC had started to decline in the late 1980s, Bratton's arrival accelerated the trend (see Figure 2). Time wrote in a 1996 cover story, "The drop became a giddy double-digit affair, plunging farther and faster than it has done anywhere else in the country, faster than any cultural or demographic trend could explain. For two years, crime has declined in all 76 precincts." As Kim and Mauborgne note, the change wasn't just a flash in the pan or a nationwide trend: "Statistics released in December 2002 revealed that New York's overall crime rate [was] the lowest among the 25 largest cities in the United States."

[FIGURE 2 OMITTED]

Finding the Keys

These turnarounds are classic: rapid U-turns from the brink of doom to stellar success. They may not last forever. But if a failing school could achieve similar results for several years, thousands of students would benefit permanently. How did they happen? This article explains what we know, from plentiful cross-sector research, about how to engineer turnarounds within existing organizations. It then identifies two critical policy issues that states and districts must address to accelerate the prevalence of real, successful turnarounds in education.

Education reformers faced with failing schools and districts tend toward one of two camps: The Incrementalists hold that meaningful improvement can only happen slowly, with soul-wrenching culture change leading to instructional change and eventual student success. The Clean Slate Club believes the only way to fix failing schools is to shut them down and start fresh, with entirely new rules, staff, and leadership.

Both camps have it wrong, but for different reasons. The slow and steady approach won't work for chronically failing organizations. The fresh-start method is much more promising, based on the dramatic success of some newly formed schools serving tough populations. But most start-ups fail or bump along in the purgatory of mediocrity, even in sectors that, unlike education,...

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