Book Review: Ray Dalio’s Principles

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How to read it

I just finished Ray Dalio’s Principles and found the book to be both uneven and very useful.

Sometimes I’d read a few paragraphs and think “I should probably spend the next decade trying to get that right” and sometimes I’d read 10 pages and think “that’s a long way of saying something that everyone already knows.”

Thanks to Ken Bubp, our team is also digging into the book together, which I hope will make us better.

Already, there are a couple of areas where the book made me want to get much better – a few of those detailed below.

The point of a work conversations is to find the truth

The point of social conversation is not  to find the truth: it’s to build bonds, have fun, and play status games.

These social habits tend to bleed into work conversations and it takes a lot of deliberate effort to create an environment where truth seeking is the paramount goal of a conversation.

Specifically, truth finding conversations require the implementation of two difficult to reconcile mindsets: not holding tight too tight to one’s own opinions + being aggressive enough to pressure test another person’s opinions.

So team members have to constantly toggle between:

you’re a smart person who shares my values so I need to figure out why you think I’m wrong because I might be wrong

and

I think you’re wrong because of X and I will not back down from this opinion for the sake of being agreeable

This is tough to do.

Normalize and embrace emotional and intellectual pain

In social relationships, we tend to avoid pain. Doing so is often bad for the long-term health of social relationships, and it can be devastating in professional settings.

Too often in work:

  1. It is considered harmful to cause someone else intellectual or emotional pain.
  2. The first reaction of feeling pain is often to attack others and build self-promoting narratives.

Both of these are very hard to unwind.

It’s very difficult to create a cultural where it is ok to cause someone the right kind of pain.

And it’s very hard to have the individual fortitude to build an internal monologue that goes like this: “the fact that I’m feeling a lot of pain means this is a prime opportunity for growth.”

With fluff and abuse at the polar ends of the cultural spectrum, getting this right is hard.

Leaders are defenders of the standard 

The standard for thinking and performance starts at the top, and the leadership of an organization must constantly live the standard and hold all others to the standard (this is also the principle of the great book The Score Takes Care of Itself).

It takes a lot of mental stamina to hold the bar: in 1-1 check-ins, in team meetings, in external conversations with partners…

…to never nod your head unless you mean it is flat out exhausting… to always ask the next probing question is annoying…. to say it’s not good enough yet is tiring…

But if you don’t do it you, your team, your organization will slide into mediocrity.

Getting the balance right between people, processes, and technology

Leaders have a finite amount of energy and capital to allocate across people, processes, and technology.

Different organizations, industries, and time periods require different allocations – as well as different types of expenditures.

Dalio goes deep in how he managed these as he grew his hedge fund, early on relying more on technology than most of his peers. While some his efforts are generalizable, many of them are not.

But the discipline by which he came to his approach is generalizable, and it’s something I want to keep working on as our team, technology, and industry evolve.

Application

After our team conversation, we’ll have to figure out how to apply these lessons. In some cases, it might simply be through consciously applying these principles in our conversations; in some cases, we’ll build processes; and perhaps down the road we’ll build out some technology.

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Liberia is relinquishing. Is it working? 1st year results are in.

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Over the past few years, Liberia has embarked on an ambitious project to partner with non-governmental school networks.

Even more daring: Liberia’s political leadership is parterning with foreign school operators, some of which are for-profit.

Imagine for a second if, after Katrina, New Orleans political leaders had decided to partner with school operators from Singapore, Finland, and Shanghai.

In Liberia, numerous short-term and long-term risks abound – as do extremely high-potential upsides.

Partnership schools achieved .18 SD gains in one year 

Whatever one thinks of Liberia’s strategy, kudos to them for partnering with school networks in a manner that allowed for randomized control trials. Because schools were randomly selected for partnership, we can get a better understanding on whether or not the providers are delving a better education.

In aggregate, the first year effects were large: students in partnership schools scored 0.18 standard deviations higher in English and 0.18 standard deviations higher in mathematics than students in regular public schools. The authors note: “while starting from a very low level by international standards, this is the equivalent of 0.56 additional years of schooling for English and 0.66 additional years of schooling for math.”

Also, teachers are showing up more often: “teachers in partnership schools were 20 percentage points more likely to be in school during a random spot check (from a base of 40% in control schools).”

And teachers are teaching: “…16 percentage points more likely to be engaged in instruction during class time (from a base of 32% in control schools).”

Results varied by provider

The highest performing operators delivered ~.3 effects!: the Youth Movement for Collective Action (YMCA), Rising Academies, Bridge International Academies, and Street Child.

Second tier (very solid .15 effects): BRAC and More than Me.

Third tier (no effect): Omega and Stella Maris.

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Students receiving 2X learning time

This was incredible to me: “students in partnership schools spent twice as much time learning each week, when taking into account reduced absenteeism, increased time-on-task, and longer school days.”

Costs running a bit high (but to be expected in start-up)

The authors note that operators were spending more per-pupil than traditional schools; while this is a warning sign, I don’t read much into it now, as start-up efforts generally run higher and than smooth out. The exact same pattern happened in New Orleans.

What is the impact on traditional educators and schools?

As in the United States, non-governmental school operator growth impacts the traditional system, which has both programmatic and political consequences.

In an odd twist, the government contracts limited the class sizes of networks, which forced some operators to turn away students who then had to find other schools.

Operators also fired existing teachers, which presumably benefited children but caused adult hardship and risks political blowback.

I predict that these issues will only increase in salience. They require solutions that are both programmatic (government regulation of student equity issues) and political (ensuring that adult incumbents don’t derail positive efforts).

Teacher supply issues may get worse

The researchers note that to the extent that operators were able to recruit better teachers – and that the supply of teachers does not change – operators will be unable to scale and achieve the same effects.

In New Orleans we faced the same issue: we failed to grow high-quality teacher pipelines at the same pace we grew operators, and this caused operator growing pains midway through their scaling plans.

I hope Liberia gets ahead of this.

Is it worth it?

The perennial (and reasonable) question asked in such efforts is always: is it worth it? Is the disruption to families and educators worth the gain?

This question was asked a lot in New Orleans. I (as with the majority of New Orleanians) believe that it was worth it in New Orleans.

But I do think the Liberia case is more complicated, as it involves issues of national institutions and sovereignty.

There are numerous risks to outsourcing school operations to international organizations.

What if you end up in a conflict with the home nation(s) of large operators? What if these operators inculcate undesirable foreign values to your culture? What if the outsourcing of your educational operations slows down the overall maturation of your civil society?

These are hard questions.

My guess is that it is worth it, in that the gains of having a much better educated populace are worth the trade-offs of relying on foreign operators.

But I am not an expert in international development and I have not studied the issue enough to have strong opinions.

All that being said, all involved deserve our praise: the government is trying hard to serve their citizens, the school networks are serving students in extremely difficult situations, and the students themselves are getting smarter.

Here’s hoping the positive results continue.

To renew or to relinquish? That is the question for New York City

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Sometimes the research gods shine down upon us. In this case, they gave us two NYC studies, each on a different strategy, within a few months of each other.

The studies tell us much about what’s happening in New York City. They also illuminate the rational for why I believe in relinquishment.

What to do with struggling schools?

Some people believe you should give struggling schools more support. Others believe you  should either replace them with charter schools or close them.

Bill de Blasio is spending $582 million on 78 Renewal Schools, a model built upon the support strategy.

Charter school supporters tend to support the replacement strategy.

Early evidence on Renewal Schools

Marcus Winters of the Manhattan Institute authored a recent study that found that Renewal Schools have seen around a .1 standard deviation increase in math and ELA scores. This is a healthy bump and it’s great to see modestly positive effects.

Winters also notes, however, that Mike Bloomberg’s closure strategy achieved about the same results at little to no cost.

Recent CREDO study on NYC charter schools

CREDO’s research found that charters in NYC achieved about .1 standard deviation effects as well.

And while CREDO did not put a price tag on the charter reforms, most estimates I’ve seen have charters coming in at a lower per school cost than the ~$8 million per Renewal School.

Is it worth it?

It can be painful to close schools and grow charter schools. This process undoubtedly causes some disruption to families and educators.

If I believed the Renewal Schools would continue to improve, I’d be open to the idea that they were worth it. Perhaps spending a few hundred million more dollars is worth the cost to avoid significant disruption to communities.

The Renewal Schools will not keep improving

Sometimes these blog posts write themselves.

Elizabeth Harris ended her NY Times piece on Renewal Schools with the following quotation:

“The thing we’re nervous about is losing any of these resources,” said Mr. Bradley of Renaissance School of the Arts. “Renewal is the bomb. I want to be renewed forever.”

I’m sure receiving $5 to $10 million to improve your school is the bomb.

But of course these resources will not last.

Additionally, because these schools are subject to the whims of changes in district policies, the strategies they implemented will likely fall out of the favor of a future administration.

Charter schools, on the other hand, receive most of the philanthropic support for start-up costs, not continuing costs.

Additionally, charter schools are governed by non-profit boards which can maintain strategic consistency through self-perpetuating boards.

To renew or to relinquish? In the long-run, relinquishment will deliver sustained gains for students. Renewal will not.

Education philanthropists should not take advice from Larry Summers

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Tyler Cowen just interviewed Larry Summers.

In a blog post about the interview, Tyler wrote: “if you think you know someone who is very smart, Larry is almost certainly smarter.”

This may be the case when it comes to economics. While I’m in no position to evaluate his economic policy claims, I found Summers to be reflective, curious, and thoughtful. He seems like the kind of person I would enjoy working with.

But Summers also discussed education philanthropy, and I came away with a strong belief that I almost certainly smarter than Summers on this subject.

I don’t say this because I for sure know that I’m right and Summers is wrong; rather, I say this because I have a firmer grasp of the research, more hands on experience, and a clearer strategic vision for scalable and sustainable change.

Given that Summers likely has a good 20-30 IQ points on me, and that he has risen to the top of an extremely competitive field, the fact that I’m likely smarter than Summers in this area is a testament to the powers of specialization and the domain specific nature of knowledge.

How should you spend a $100 million? 

In the interview, Tyler asked Summers how he would advise a philanthropist in St. Louis who wanted to give away a $100 million to help her city.  After admitting the he knew little about St. Louis, Summers answered the question more generally, and said that he would focus on public education.

As it happens, my job is to advise philanthropists who want to improve public education. Currently, our team manages the philanthropic giving for Reed Hastings and the Laura and John Arnold Foundation.

Given my day job, I was curious to hear how Summers would respond.

Moreover, while he may not remember, Summers was once asked about relinquishment during an interview on education reform (I was in attendance and vividly remember him saying “Ah, relinquishment…”), and I was curious to see if my ideas had impacted him at all.

They have not!

Summer’s advice: avoid charter schools and work outside the system 

In the interview, Summers gave two pieces of advice to education philanthropists:

  1. Avoid charter schools: Too many philanthropists set-up charter schools that cream students, pay teachers salaries that are not sustainable on the public dollar, and then ultimately cannibalize the traditional system of good students, good teachers, and public funds.
  2. Avoid the K12 system: Instead of trying to tackle the core K-12 system, it’s better to fund efforts that work around the system, such as after school or summer school.

I think both of these points are wrong.

Summers ignores a large evidence base on charter schools

I recently summarized the evidence on charters schools on this blog. Summers ignores most of this research:

Achievement: Urban charter schools outperform traditional public schools, posting annual effects of .05-.1 standard deviations. This holds true with both quasi-experimental designs (where researchers try to control for student selection) and experimental designs (where student selection is randomized). Charters are not achieving their impacts because of student creaming.

Funding: Charter schools, on average, receive much less funding than traditional schools. As I previously wrote about, in numerous cities where charter schools receive less money, they still outperform the traditional system.

Teacher Pay: Nationally, traditional school teachers have higher average salaries than charter school teachers. And while some of this is due to the effect that charters hire younger teachers, I have seen no research that indicates that, at scale, charters are picking off the best teachers by offering them unsustainable salaries.

Impact on Traditional Schools: Lastly, most research shows that charter schools have positive or neutral effects on traditional school achievement. Moreover, cities that have improved their educational systems over the past decade have often seen rising charter school enrollment during the same period. Washington D.C. and Denver stand out as primary examples of cities where all schools got better as charter schools expanded.

All boats rising – and not cannibalism – is the norm.

It appears that Summers is reasoning from anecdote rather research.

I am sure there are  some charter organizations that cream students and spend way above the public dollar (I can think of a few!), but these are outliers.

At scale, urban charter schools achieve more and spend less than traditional public schools.

Working outside the system is low impact and not leveraged with existing public funds

Summer’s second piece of advice – work outside the system rather than fix the system itself – is also flawed.

Yes, fixing the system is hard. But kids spend a lot of time in the system. It will be very difficult to improve public education if you ignore what happens to students from 8 AM to 3 PM for 13 years.

Moreover, to the extent that a philanthropist funds an outside the system intervention that works, the only way to scale the intervention is with more philanthropy or increased public revenues. There is no leverage with existing public dollars.

While I am not against raising additional public revenue for things that work, I think we should spend most of our energy improving the effectiveness of the dollars we already spend, especially given that systems level K12 interventions (like urban charter schools), are achieving success at scale.

If there was no evidence that the system could be fixed, I would tend to agree with Summers. But as more and more cities breakthrough and achieve citywide gains, the logic of working mostly outside the system is increasingly flawed. The one exception I’d make to this claim is pre-school, which has a reasonably strong evidence base and is increasingly funded with public dollars.

If you are a philanthropist who wants to improve public education in your city, please contact me 

In the event that Tyler’s question was not hypothetical in nature, and that there is a philanthropist in St. Louis who wants to donate a $100 million, I do hope she contacts me (neeravkingsland at gmail) rather than takes Summers’ advice.

I am a firm believer that philanthropy well spent can forever positively alter the trajectory of a city’s public educational system.

And while those of us advocating for systems level change still have much to prove, we now have numerous examples of cities achieving citywide improvements for their most at-risk students. Philanthropists should double down on their successes, evolve the model based on local conditions, and continue to fund further research so we can keep on learning.

High expectation vs. low expectation parent organizing

This is likely a crude distinction, but I think there’s a real difference between high expectations and low expectations parent organizing.

Low expectations parent organizing occurs when you simply meet parents where they are at, without having much urgency about tackling systems level issues.

For example, organizes might work for parents for a few years on issues like lunch quality, bus routes, and extracurricular activities.

If organizers and parents work hard and a few year later the lunches are a little better, what’s the point if the vast majority of the kids can’t read or do math on grade level, or if the school culture fails to build students with strong values?

This feels like low expectations: working too long on these issues is implicitly saying that parents are not smart enough to tackle the most pressing issues facing their children.

High expectations parent organizing starts with the premise that families can grasp systems level issues, and that the quicker they are engaged on important issues like teacher and school quality, the better.

I’ve had the opportunity to discuss really hard educational issues with families living in deep poverty. And while it’s surely true that they start from a deficit of policy knowledge, they tend to come up to speed quickly and, most importantly, can merry policy arguments with the brutal facts that they see day in and day out when the are forced to send their children to struggling schools.

Based on my experience (and I still have a lot to learn in this area), I’d say the following are the key components of great high expectations parent organizing:

  1. Organizers begin with the mindset that families can grasp and advocate for systems level policy solutions.
  2. Organizers provide unbiased (as much as feasible) educational classes and experiences to families so that families can grapple with systems level policy issues.
  3. Organizers both possess and cultivate a sense of urgency – so that educational experiences start leading to powerful systems level actions.
  4. Family leaders fairly quickly take the reigns in terms of determining the future policy and advocacy agenda.
  5. Family leaders increase their operational chops so that the actions and campaigns they are less reliant on external organizers.

Ultimately, this is a two step high expectations game: first, you need to believe that families can understand systems level issues, and second, you need to believe that they can lead the charge.

I’m still trying to get smarter in this area, so I hope that the organizers who read this blog  will correct errors in the comment section.

If you want to be a superintendent build a school district

I cross paths with many people who want to become a superintendent of a large city school district.

Most of these people feel that this is the ultimate leadership position when it comes to serving children in need.

When I ask why, they say: “that’s where the kids are.”

I usually say: “this is not an immutable condition.”

Charter leaders are building some of the largest school districts in the country 

The most scaled high-performing charter network, KIPP, serves nearly a 100,000 students.

Right now, KIPP is around the 40th biggest school district in the country.

I bet within a decade it will be in the top 10 biggest school districts in the country.

A few other CMOs are on track to serve 100,000 students within the decade as well.

Within 10-15 years, a quarter of the top 25 biggest school districts in the country may be charter networks.

You can spend 15 years building an amazing school district or 3 years trying to fix a broken one 

KIPP is about 20 years old. Given all we know now (thanks in part to KIPP and other early CMOs), new charter founders should be able to hit the 100,000 student mark in less time.

With a bunch of hard and a bit of luck, the best entrepreneurs in the country should be able to replicate KIPP’s success and build 100,000 student CMOs in 10-15 years.

Compare this to being a superintendent: you inherit a struggling school district and have on average about 2-4 years to try and make it better before you are pushed out.

A few incredible superintendents succeed in making a dent, but most don’t.

As a charter founder, so much more of your potential for impact is in your control. And if you get results your board generally won’t fire you; rather, they’ll encourage you to serve more students.

There are about 10-15 million students attending public school and living in poverty

If the high-performing charter community could build 100 school districts that each served 100K students, we could provide nearly all students living in poverty with a great public education.

Are there a 100 people (or teams) in this country that can build a 100K school district? I don’t know.

Leading a major charter network is an incredibly difficult job. We need to do all we can be doing to make it as sustainable as possible.

The future of educational opportunity in this country might depend on it.

[thanks to James Cryan and Norman Atkins for inspiring this post]

CREDO’s school closure research validates portfolio and golden tickets

 

CREDO just came out with a study on school closures. Matt Barnum gives a good write up in Chalkbeat (and continues to far surpass NYT and WAPO in his analysis of complicated research).

Achievement increases when you close low performing schools and students transfer to better schools 

Overall, the research increased my belief in the idea that great schools should expand and failing schools should be closed or transformed (the basis of the portfolio model).

My only reservation with this study is that it defined low-performing schools by absolute performance rather than growth in achievement; however, student achievement still grew when students moved from lower to higher absolute performing schools, so perhaps many of the low absolute schools were low growth schools as well.

The research adds to the body of evidence that shows: if you…

(1) Close lower performing schools;

(2) Increase the number of high-performing schools;

(3) Ensure students from the closed schools get into the higher-performing schools; then

(4) Educational opportunity will increase.

See below from CREDO on the student achievement effect of a student transferring from a closed school to a superior school.

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One other thing: this type of analysis doesn’t capture the positive effect of the failing school no longer existing; a city implementing these strategies should see additional gains from no new students ever having to attend the failing school.

“Golden ticket” policies can ensure students attending closed schools get into better schools

Cities that use unified enrollment systems can easily guarantee that students leaving closed schools have access to better schools by a “golden ticket” policy. This policy gives students exiting closed schools first access to any open seats in high-quality schools in the city.

While I find the policy name “golden ticket” to be crass, it’s a policy that can do wonders for educational equity.

Too often students in failing schools are shuffled from one underperforming school to another; a golden ticket policy can prevent this.

Should we support increased school closures in majority white communities?

Numerous commentators pointed out that schools with +80% minority students were more likely to be closed than schools that had lower minority enrollment.

Most took this as a sign of inequitable treatment toward minority communities.

However, a growing body of research indicates that school closure increases educational opportunity so long as student have access to better schools. And although I wish this wasn’t the case, my hunch is that majority white communities likely have a higher concentration of better schools than your average minority community: this means that school closures are likely to be even more effective in majority white communities.

My guess is a lack of closures in majority white communities is leading to reduced educational opportunity.

School closure is incredibly hard

While I believe that thoughtfully implemented school closure policies will benefit children, I know that closing schools is hard for students, families, educators, and politicians.

But sometimes doing the hard thing can help students.

And a growing body of evidence is pointing to the idea that a well implemented school closures is one of those hard things that can ultimately make things better for students and communities.

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Lastly: thinking of everyone in Houston right now. Really hoping that friends, colleagues, and everyone else in city are ok.

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