broad case study

________________________

Copyright 2006 by The Broad Center for the Management of School Systems. Tim

DeRoche wrote this case in the Fall of 2005 under the supervision of Becca Bracy Knight of

The Broad Center. No part of this publication may be reproduced, stored in a retrieval

system, used in a spreadsheet, or transmitted in any way form or by any means –

electronic, mechanical, photocopying, recording, or otherwise – without the written

permission of The Broad Center.

Big Change in the Big Apple: Putting Children First in New York City

In early March of 2004, Joel Klein sat down with Mayor Michael Bloomberg to discuss the

future of the New York City Department of Education (DOE). It had been almost two years

since these two men – both prominent community and business leaders with little experience in

public education – had taken on the task of reforming the largest public school system in the U.S.

And now they were facing multiple crises which threatened to derail their ambitious reform plan

forever.

Billionaire businessman Michael Bloomberg, a Republican, was elected Mayor of New York

City in November of 2001. Within months, he had convinced the State‟s predominantly

Democratic legislature to give him control over the City‟s massive school system. In July of

2002, he appointed Joel Klein – former federal antitrust attorney and Fortune 500 business

executive – as the Chancellor. In the 1990‟s, Klein had gained national recognition as the lead

prosecutor in the federal government‟s anti-trust case against Microsoft, the software behemoth

founded by Bill Gates.

In their first year, Chancellor Klein and Mayor Bloomberg built an impressive amount of

momentum. They had successfully dismantled a bureaucratic structure of 32 community

districts, hired Caroline Kennedy to raise additional funds from the community, launched a

Leadership Academy with pro bono advisory support from former CEO of General Electric Jack

Welch, negotiated a new contract with the teachers‟ union, and offered up an ambitious plan for

the reform of the DOE – Children First – which implemented a series of ambitious

organizational and curricular changes.

But now - in early 2004 – there were still faced with many challenges, and success was not

guaranteed.

Just a few months earlier, the DOE‟s contract with the United Federation of Teachers (UFT) had

expired. Bloomberg had worked hard to negotiate a new contract when he was given control

over the DOE in 2002, and the contract‟s generous raises of 16-22% for all teachers went a long

way toward building a relationship of trust with President Randi Weingarten.

But the City had been unable to negotiate a new contract in 2003, and the teachers had therefore

been working without a contract for several months. Bloomberg‟s once-friendly relationship

with Weingarten took a turn for the worse, and she started to openly criticize the reform effort.

Big Change in the Big Apple: © 2006 thebroadcenter

Putting Children First in New York City

2

"They want to show they are tough guys," she told the New York Daily News. "They want what

they want, but all it will do is backfire."1

In addition, the district had been forced to abandon its new reading curriculum for 49 of the

city‟s neediest schools. Criticized for not adopting a curriculum with a more systematic

approach to phonics, Klein and Bloomberg had faced the reality that the district was likely to

lose out on up to $115 million in federal funds over three years, if they stayed with their original

choice of a balanced literacy curriculum.2

While the district asserted that the new curriculum

was still in alignment with a balanced literacy approach, their decision was seen by many as a

public admission of defeat.

At the same time, Bloomberg faced a decision that would forever define what “mayoral control”

really meant. In January, he had announced that the DOE would end the practice of social

promotion for 3rd

-graders. From now on, students that didn‟t meet the basic level of proficiency

in reading and math would be required to repeat the 3rd

grade. But the Panel for Educational

Policy – the governing board for the DOE – was threatening to veto the controversial policy

change. What‟s more, several of Bloomberg‟s own appointees were leading the charge against

the policy change.

Finally, the district‟s instructional leader was under fire. Diana Lam – deputy chancellor for

teaching and learning – had been accused of nepotism, and the scandal had also embroiled

Klein‟s chief legal counsel. Lam had been an important leader in the effort to implement the

balanced literacy curriculum, and Klein and Bloomberg knew that the controversy threatened

both their moral authority as leaders and the implementation of their reform plan.

Klein and Bloomberg knew that March 2004 would be a critical month. They had to put the

nepotism scandal behind them and re-establish their authority as leaders.

Could they rise to the challenge? Could they re-gain their momentum? Or would they be

swallowed up in controversy, just as many of their predecessors had?

They were about to find out.

A Sizeable Challenge

When Klein started his new job in the fall of 2002, he knew that the Chancellor‟s position in

New York City was perhaps the most challenging K-12 position in the entire country.

As one journalist put it, “If Klein thinks he had a tough time battling Bill Gates and the corporate

legal sharks from Microsoft, wait till he gets into trench warfare over the city's neighborhood

schools. It's one thing to analyze a system on paper. It's quite another to deal face-to-face with

1 Celeste Katz and Joe Williams, “Joel‟s End-Run „Round Randi,” New York Daily News, 28 January 2004

2 Kathleen Kennedy Manzo, “N.Y.C. Shifts Reading Plan In 49 Needy Schools,” Education Week, 14 January,

2004.



3

tough union leaders, cagey bureaucrats, irate parents, parochial community leaders, downtown

business chiefs and editorial boards who want to tell you how to run things.”3

With an annual operating budget of over $12.5 billion4, the New York City Department of

Education would have ranked #162 on the Fortune 500 list of America‟s largest companies in

20025. Serving over 1 million students and employing over 90,000 teachers, the district could

only be described as gargantuan.

What‟s more, this gargantuan system was failing. Only 30% of the city‟s 8th

-graders reached

proficiency in reading on the New York state standards test, and only 30% in math. Fourth-

grade statistics were only slightly less troubling: 46% proficient in reading, 52% in math.

If you looked harder, though, there was an even more disturbing reality in the numbers: The

achievement gap between white students and their minority peers was appallingly large in both

4th

grade and 8th

grade:

4th

-graders 8th

-graders

Reading Math Reading Math

White 71% 77% 54% 54%

African-American 39% 41% 21% 19%

Hispanic 38% 45% 20% 20% Table 1: Percent of NYBOE Students Reaching Proficiency on the NY State Standards test in 2002. By ethnic subgroup.

Perhaps the most troubling statistic was graduation rates. Using the respected Manhattan

Institute methodology, the National Center for Educational Accountability (NCEA) calculated

that only 59% of New York‟s 8th

-graders in 1997-98 had earned diplomas by 2002. For African-

American and Hispanic students, the results were even worse: just 56% and 49%, respectively.

The district organization itself was bloated and inefficient. The district spent an astonishing

$12,000 per student. But – according to district‟s own budget records – only 51% of these

resources made it into the classroom6. The rest was spent at various levels of the bureaucracy.

Over the last century, the Board of Education – the name for the central administration before

Bloomberg renamed it a Department - had gone through waves of management reforms, from

centralization to decentralization and back again. The result was a system in which power was

shared by the district‟s central office at 110 Livingston Street in Brooklyn and 32 community

districts which had direct management authority over local elementary and middle schools. High

schools, in contrast, were organized in separate high school districts by borough, separate from

the K-8 schools.

As a result, the system was overwhelmed by layers of bureaucracy. A study by the consulting

firm McKinsey & Company for previous Chancellor Harold Levy identified over 22,000 central

3Juan Gonzalez, “Chancellor Can‟t Ignore Local Role,” New York Daily News, 30 July 2002

4 School-Based Expenditure Report, New York Department of Education, 2001-02.

5 “Fortune 500 Largest U.S. Corporations,” Fortune, 15 April 2002.

6 School-Based Expenditure Report, New York Department of Education, 2001-02.



4

office employees, including those employed at the district headquarters and those employed by

the community districts.7

The Chancellor position itself was a focal point for all of the system‟s problems and

controversies: financial scandals, bitter fights with the teachers‟ union, recurring waves of

violence in the schools, tension with City Hall, and – above all – an ongoing failure to educate

many poor and minority students, leaving them unprepared for life as adults.

As a result, Klein was the system‟s fourth chancellor in less than a decade. And conventional

wisdom said that he had little chance of distinguishing himself from the “legion of failed

chancellors” who had come before.8

Enlisting Help

In the late summer of 2002, Jim Shelton was walking through the Dulles airport in Washington,

DC. Just an hour earlier, he had accepted an exciting new job, committing to open up the East

Coast office for the New Schools Venture Fund, one of the nation‟s leading supporters of charter

schools. But his life was about to take an unexpected turn.

“I was walking through the airport, and I got a phone call from Joel Klein,” Shelton remembers.

“I didn‟t even know who he was.” Within just a few weeks of that first call, Shelton accepted an

offer to join the Chancellor‟s team, putting his new job at New Schools on hold.

Klein was determined to launch a strategic planning process that would provide a roadmap for

his tenure as Chancellor. “If you‟re going to have the kind of impact that you want to have,”

Klein remembers saying to himself, “then you‟ll really need to do some serious planning.” Not

only was he aware of the challenges inherent in the job, but he was also a newcomer to K-12

education. If he was to get off to a quick start, he would need to absorb a tremendous amount of

information in an extremely short period of time. And he would need to surround himself with

people who could help him make strong, informed decisions.

Shelton was one of those people. A former consultant with the high-powered consulting firm

McKinsey & Company, Shelton had experience running the types of analytical teams that Klein

wanted to launch. And, as co-founder of LearnNow, a school management company that later

merged with Edison Schools, Shelton understood the challenges associated with operating K-12

schools.

With Shelton coming on board, Klein knew that his planning process was in good hands. But he

also knew that such a process would cost money. “It‟s hard to get money for anything like

R&D,” he said, referring to the Research & Development process that many private companies

devote significant resources to. He and Shelton hoped to bring in some of the best minds from

the business world to help sort through the complex operations of the DOE, but that would not be

cheap.

7 McKinsey analysis, 2001.

8 Andrew Wolf, “Mythical Figures and Magic Formulas in N.Y. Schools,” The New York Sun, 16 August, 2002.



5

Knowing that he couldn‟t raid the DOE‟s operating funds for such a process, Klein reached out

to two foundations who were involved in K-12 education reform, The Broad Foundation and the

Robertson Foundation. Between them, these foundations provided $4.5 million, strongly voicing

their support for Klein‟s leadership of the long-stagnant DOE.

With millions of dollars at their disposal, Klein was able to launch a major strategic planning

process that would touch on nearly all aspects of the DOE‟s operations. One of Klein‟s first

steps was to hire McKinsey & Company, Shelton‟s former employer. With experience guiding

corporate clients through periods of major change, McKinsey formed teams to help Klein and

Shelton tackle three of the thorniest issues: (1) organizational structure, (2) operational

effectiveness, and (3) school leadership.

In addition, Klein and Shelton launched seven other “working groups” that would tackle

instructional issues like Math and Literacy, as well as operational issues like Budgeting and

Facilities. Importantly, the process also included a significant Community Engagement

component, led by Michele Cahill, a former executive with the Carnegie Foundation who had

been working with the New York schools for over 25 years. “We engaged in a dialogue with

over 60,000 people through large and small events,” Cahill remembers. “We weren‟t taking a

poll, but we wanted to make sure that people were being listened to.”

“We were able to bring in a significant number of outside experts,” said Klein, “and the process

ultimately gave us a series of integrated recommendations that would guide all of our actions.”

The “Waking Up” Phase

Chancellor Klein proved to be a bold, daring leader.

Jim Shelton remembers the decision-making pattern that repeated itself many times in those first

few months. “On a given issue, I would always tee up three choices for Joel: one conservative,

one radical, and one super radical,” says Shelton. “Usually, being who I am, I would

recommend the middle option. But at least 50% of the time, Joel would go for the most radical

option. He knew we had to shake up the system.”

Maureen Hayes, a former investment banker who joined the team in early 2003, called it the

“waking up” phase. She describes Klein‟s mentality: “You want to do as much as you can as

fast as you can. You want to throw the bureaucracy off-balance, because that‟s the only way you

can make real change.”

Klein and his team had chosen a bold, risky path in which they would confront the bureaucracy

head-on. But one question remained: Would it work? Or would the system simply grind to a

halt, resisting these outsiders who were bringing about so much change in such a short period of

time?



6

A System of Great Schools

While the Children First strategic planning process had produced dozens of recommendations,

Klein knew that he would have to focus on a handful in order to make an immediate, positive

impact on the lives of children. His philosophy was clear to everyone who worked with him:

“We‟re creating a system of great schools, rather than a great school system.”

With this philosophy in mind, Klein and his team decided to focus on five key reforms: (1) a

reorganization of the management structure, (2) creation of a Leadership Academy to develop

new school leaders, (3) adoption of a consistent curriculum across the whole system, (4) a

process for engaging the community, and (5) creation of new schools, both charters and small

high schools formed from the reorganization of traditional large, comprehensive high schools.

Reorganization

In a sense, the reorganization had started the day Mayor Bloomberg had been granted control of

the school district. The legislation that changed the governance of the district also included a

provision that would abolish the 32 community school boards.

Within a month of gaining control of the system, Bloomberg announced that the Chancellor and

all central staff would move to the newly-renovated Tweed Courthouse building, right across the

street from City Hall. It was a bold, symbolic move, signaling to the system and to the City that

Bloomberg was now fully in charge.

But the Children First process pushed these symbolic changes even further. The McKinsey team

responsible for Organization and Management had examined options for a wholesale

reorganization of the school system. They concluded that the cost savings associated with such a

move – approximately $50 million – were negligible given the size of the system‟s overall

budget.

However, the team also concluded that a major organizational change was still desirable, for

managerial reasons: (1) decreasing the “span of control” of local superintendents or cluster

leaders, (2) increasing the focus on instruction by the system‟s chain of command, and (3)

increasing vertical integration of the system by grouping local elementary, middle, and high

schools all into the same organizational structure. (In the existing structure, high schools were

organized separately, in their own districts which reported directly to the Chancellor.)

By making these three changes, Klein could focus the managerial resources of the system on

improving student achievement. In the old system, the superintendent of a CSD oversaw over

30 schools on average, meaning that the superintendents were unable to play a major role in the

improvement of instruction in underperforming schools. “We never saw the old

superintendents,” said one high school principal. In addition, with the organizational barrier

between primary and secondary schools, principals and teachers had no incentives – and few

opportunities – to integrate the curriculum across grade levels.



7

Based on recommendations from the McKinsey team, Klein and Bloomberg created the position

of local instructional superintendent (LIS) which would replace the old position of CSD

superintendent. LISes would oversee just 10-12 schools including both primary and secondary

schools.

The LISes, in turn, would report to ten regional superintendents, and the ten regional

superintendents would report directly to the Deputy Chancellor of Teaching and Learning. It

was, as Bloomberg called it, “one unified, focused, streamlined chain of command,” and the

DOE would no longer be home to “Byzantine administrative fiefdoms.”9

Operational support moved from the CSD offices to 6 Regional Operations Centers (ROCs) that

report to the Deputy Chancellor of Operations.

“The real goal,” says Cahill, “was to allow our instructional people – including principals – to

have more of a focus on instruction.”

A Leadership Academy for Principals

“There are not a lot of people who want to do this job,”10

said one education professor about the

position of principal in the DOE. When Klein took over as Chancellor, he became responsible

for a system in which almost half of the 1,100 schools were led by principals with less than three

years experience. And 260 more were eligible for retirement within a year.11

The McKinsey team had detailed the problem in even greater detail. They described a system in

which the financial rewards for becoming an assistant principal were meager at best and in which

all administrators were constrained by bureaucratic red tape and onerous provisions of the

teachers‟ contract. As McKinsey showed, it was extremely rare for the DOE to hire a principal

from outside the system, meaning that there was no easy way to inject new blood and new

passion into the system. The average number of applicants applying for an open principal

position had dropped from 54 to 12 in just six years, a precipitous 78% decline.12

One of Klein‟s biggest priorities, then, was to create a pipeline that would recruit and develop

outstanding school leaders for the DOE. "As school leaders, principals are the key to overall

school performance,” said Klein, “and to the kind of fundamental change that many of our

schools require." With these words, he launched the New York Leadership Academy.

From now on, the district would seek to hire the best of the best, rather than just promoting from

the district‟s existing assistant principal ranks.

In January of 2003, Klein asked Jack Welch, the world-famous former CEO of General Electric

– renowned for his ability to hire and develop outstanding managers – to chair the advisory panel

for the new Academy, hoping that he would bring private-sector rigor to the professional

9 Karla Scoon Reid, “Mayor Outlines Major Overhaul of N.Y.C. System,” Education Week, 22 January, 2003.

10 Jeff Archer, “Novice Principals Put Huge Strain on New York City Schools,” Education Week, 29 May 2002.

11 Ibid.

12 McKinsey analysis, 2002.



8

development program. In addition, Tony Alvarado – charismatic former superintendent of

Districts 2 and 4 within the DOE – was added to the advisory panel to help focus the training on

instructional issues.

To manage the Academy, Klein hired two outstanding leaders that bridged the business and

education worlds. Bob Knowling, an experienced telecommunications executive, would serve as

CEO of the Academy, and Sandra Stein, an educator from Baruch College, would serve as its

academic dean. “What‟s our idea of leadership?” Knowling asked. “I believe that a leader‟s role

and purpose is to create the environment where people can excel. And it starts with clear vision,

explicit values, and appropriate reward and recognition.”

Another key component of the plan was focused on principal placement. Klein hoped to

implement a plan that would directly impact the leadership of the City‟s most underperforming

schools, those that served mainly poor, minority students and that were consistently producing

appalling test results and graduation rates.

With a $15 million grant from the Wallace-Reader‟s Digest Funds, the DOE would offer $75,000

in incentive pay for high-performing principals to commit their leadership for three years to an

underperforming school, mentoring a young aspiring principal candidate who would be groomed

to take over the school at the end of the three year period.

In August of 2004, the Leadership Academy graduated its first class of 77 aspiring principals.

By 2007, they planned to hire up to 100 outstanding new principals each year from the Academy.

“Principals are now being chosen because they‟re instructional leaders and not because of who

they know,” said Carmen Farina, a former community district superintendent who eventually

became the Deputy Chancellor for Teaching and Learning under Klein. “That was a major,

major shift.”

“School leadership matters,” says Klein. “Having a great principal in a school can really make

an impact. We‟ve seen it time and again.”13

Consistent Curriculum

While many of the Children First reforms were designed for the long term, Klein also believed

that his team could have an immediate impact on student achievement. While New York schools

had been using over 40 different literacy programs and over 50 different math programs, Klein

believed that consistency across schools would address problems of student mobility and make it

easier for the district to provide valuable professional development. “There‟s a real value in

getting everyone in a huge, complex organization on the same page,” he said.

Diana Lam, the deputy chancellor for teaching and learning, led the process to select the new

reading curriculum, which was unveiled in January of 2003. Based on the balanced literacy

13

Gabe Pressman, “Interview: New York schools' chancellor, Joel Klein, discusses some of the major transitions

taking place,” News Forum (WNBC New York), 14 September 2003.



9

approach, the curriculum focused on exposing children to books in classroom libraries. Phonics

would be taught – as necessary – using the Month-by-Month Phonics program.

“Children learn to read and write most effectively by practicing their skills with real books

everyday,” said Lam in support of the program. “Instead of using reading textbooks for

instruction, teachers will use classroom libraries, consisting of children‟s literature and non-

fiction books that appeal to a variety of different interests to better engage students in reading

and writing.”14

The district would support the implementation of the curriculum by funding classroom libraries

for grades K-9, ultimately leading to the purchase of over 8 million books by the beginning of

the 2003-04 school year. In addition, each school would hire two instructional coaches – one

for literacy, one for math – to help teachers implement the new curriculum.

The choice of curriculum, however, was a controversial one. The program represented a step

away from the systematic, phonics-based programs supported by the federal government‟s $6

billion “Reading First” initiative. Even long-time Bloomberg supporter Sol Stern took aim at the

new curriculum, saying that balanced literacy “totally disregards what the scientific evidence

says about the most effective teaching methods in reading.”15

Randi Weingarten, head of the teachers‟ union, endorsed the curriculum at the outset, but later

criticized the process for selecting the new curriculum. "This administration doesn't even want to

know what teachers think about what works for kids," she said.16

But Lam fought back: "I think that the critics think this curriculum is too rigorous and maybe

poor children can't do this," she said. "We did not want to settle for anything but a rich and

rigorous curriculum for our students."17

Politically, however, it wasn‟t possible to implement the program in all schools. The Chancellor

noted that approximately 200 “high-performing” schools would be exempt from the curriculum

changes, presumably because they were already successful. This strategy proved extremely

controversial, though. If the district were to simply skim the top 200 schools off the top, those

exempt schools would almost certainly represent all the wealthier areas of the City, since higher

levels of income are generally correlated with higher levels of student achievement.

In the end, the DOE decided to factor poverty levels into the analysis, so that the 200 exempt

schools would represent a cross-section of the system as a whole. But – in effect – this had the

unintended consequence of sending the message that it was acceptable for schools in poorer

areas to have lower levels of performance.

14

NYDOE press release, 21 January 2003. 15

Sol Stern, “Opportunities Lost: How New York City got derailed on the way to school reform,” Fwd:, 6

December 2004. 16

Alexandra Marks, “One city, one curriculum: Consistency is the goal in New York City's efforts to improve its

schools. But learning to work from one central playbook is not easy for its teachers,” The Christian Science Monitor,

20 January 2004. 17

Kathleen Kennedy Manzo, “N.Y.C. Hangs Tough Over Maverick Curriculum,” Education Week, 15 October

2003.



10

Professor Joseph P. Viteritti of New York University pointed out the danger: "When you start

gearing standards to demographics, you're going down a very dangerous path. It's politicizing it,

so we're going to have different expectations for students based on race and class."18

Ultimately, over 300 schools received a waiver or exemption, although in the end many opted to

adopt the core curriculum.

Interestingly, the DOE would eventually supplement the balanced literacy curriculum in the

poorest-performing schools, as well. In January of 2004, Chancellor Klein announced that the

DOE would adopt a more phonics-intensive program for 49 of the lowest-performing schools in

the system. By adopting the Harcourt Trophies program, the district hoped to increase its

chances of qualifying for approximately $115 million in federal funding from the Reading First

program while still following a balanced literacy approach. According to the DOE, the Harcourt

Trophies program was chosen because it was a program with a balanced literacy approach that

most resembled their original curriculum and it was unique in having a parallel bilingual

component (Harcourt Trofeos).

Cahill, a senior aide to Klein at the time, was reluctant to admit that the district‟s critics had been

right, but she acknowledged that the DOE was influenced by the Reading First guidelines: “We

thought that to have a very strong and competitive application, we needed to have a program that

is considered comprehensive."19

Community Engagement

Following up on his commitment to community engagement in the strategic planning process,

Klein made community engagement one of the pillars of his reform plan.

He made news early on when he brought in Caroline Kennedy to head the high-profile Office of

Strategic Partnerships. In this role, Kennedy became the district‟s chief fundraiser. In her first

year, Kennedy garnered commitments of $49 million for the Leadership Academy, plus $4.5

million for the Fund for Public Schools, the non-profit organization designed to spur private

investment in the public schools. She even secured the Dave Matthews band for a high-profile

fundraising concert in Central Park, raising over $2 million for the schools.

From Klein‟s point-of-view, it was a no-brainer to go after private money. In a time of budget

cuts, the extra funds helped make up the difference. And because the money came from non-

governmental sources, the DOE had more flexibility to spend the money on bold, innovative

programs, like the Leadership Academy. Finally, by bringing in someone with the skills and

name recognition of Caroline Kennedy, the DOE managed to score a public relations coup,

focusing a tremendous amount of positive attention on the entire DOE reform effort.

The Fund for Public Schools, operating somewhat independently of the DOE, even launched a

Citywide advertising campaign, trying to build support for the ambitious reform plans.

18

David J. Hoff, “Complaints Pour In Over N.Y.C. Curriculum Exemptions,” Education Week, 5 March 2003. 19

Kathleen Kennedy Manzo, “N.Y.C. Shifts Reading Plan in 49 Needy Schools,” Education Week, 14 January 2004.



11

At the grassroots level, Klein also placed a high value on community engagement in every single

school. While the DOE tried to implement budgeting reforms that would give schools more

spending discretion, the Chancellor made a high-profile exception to this rule when he mandated

that every school in the system would hire a parent coordinator. It would cost the DOE a total of

$43 million. “Parent coordinators are essential to our effort to make our schools more

welcoming and to actively engage parents in the school community," he said when he announced

the creation of the position.20

Like the hiring of Kennedy at the system level, Klein‟s emphasis on parent coordinators was a

part of a greater effort to overcome decades of apathy and cynicism and to mobilize New York‟s

resources for the betterment of the schools.

“If parents are involved in their kids‟ education,” Klein said, “then it makes everything easier.

We must have community support for our reforms.”

New Schools

In 2002, during his first few weeks as Chancellor, Klein attended ribbon-cutting ceremonies for

several new small schools created by the New Century High School Initiative, a partnership with

the Carnegie Corporation, Open Society Institute, Gates Foundation and New Visions for Public

Schools.

“He was really impressed by the leadership of the new schools,” says Kristen Kane, who would

later become a key player in Klein‟s effort to launch new schools. However, Klein was

impatient with a plan that only called for 75 new schools. “Can we do 150?” he asked Bob

Hughes, the president of New Visions.

By early 2003, the Chancellor had increased the goal to 200, encompassing both new small high

schools and charter schools. He created the Office of New Schools to oversee both prongs of the

ambitious effort: (1) closing large failing high schools and replacing them with new small

schools, and (2) opening up many more charter schools that would operate outside the district

bureaucracy.

Many of the district‟s high schools were monstrous failures, with over 3,000 students and

graduation rates below 40%. “For too long we had two tiers of high schools: one tier for kids on

their way to success and another tier for everyone else,” noted Klein. “And 90% of the kids in

the failing schools are African American and Latino.”

In addition, Klein had a natural affinity for the charter school model. “I wanted to bring

entrepreneurial talent into the system,” he said, “and to create more alignment between

accountability and authority.”

20

Linda Jacobson, “N.Y.C. Puts 1,200 New Parent Liaisons in Schools,” Education Week, 17 September, 2003.



12

Ninth months later, the plan was in full swing. In September, Klein announced that the Bill &

Melinda Gates Foundation would donate $51.2 million to start 67 new small high schools. It

would be the single largest grant ever given to the nation‟s largest school system. Grants would

be funneled through key community partners – including New Visions, Outward Bound, and the

Asia Society – all of whom would help launch the new schools and provide an ongoing support

network for the students.

By the fall of 2005, the DOE had opened up 178 new schools – including 24 charter schools –

meaning that they were almost 90% of the way toward the ambitious goal they‟d set less than

three years before.

Kristen Kane, who would head the Office of New Schools for two years, says that Klein was

focused on one overriding goal: “It‟s all about inverting the system so that schools are on

top…rather than on the bottom.”

“We’re in a war.”

Perhaps surprisingly, Bloomberg and Klein had gotten off to a good start with the United

Federation of Teachers (UFT), one of the most powerful teachers‟ unions in the country. In

2002, within days of gaining control of the system, Mayor Bloomberg had finalized a new

contract with the teachers that offered them raises of 16-22%.21

And Chancellor Klein voiced

early support for an English/Language Arts curriculum designed by the UFT under Randi

Weingarten‟s leadership.

Weingarten, who had fought openly with former Mayor Rudy Giuliani, publicly committed to

work “hand in hand” with Mayor Bloomberg and thanked him “for wanting to be a part of the

solution, instead of blaming people.”22

In January of 2003, she issued a glowing endorsement of

the Children First reforms, calling them “breathtakingly possible.”23

But – within a matter of months – the relationship started to deteriorate. In addition to being

head of the UFT, Weingarten served as the chairwoman of the Municipal Labor Committee, with

responsibility for coordinating all the bargaining efforts of all city unions. In that role, she had

little choice but to object to Klein‟s plan to lay off over 4,500 city workers, including hundreds

of teacher‟s aides in the school system.

Claiming that the teacher‟s aide layoffs were racially discriminatory, she filed a lawsuit against

Chancellor Klein. And she retracted her previous support for the Children First reforms:

“Excuse me, Mr. Mayor,” she said, “but who was smoking what the day this arrangement was

dreamed up?”24

In truth, her anger at Bloomberg and Klein also reflected frustrations with a smaller union role in

the policy-making progress. Previous Chancellors Rudy Crew and Harold Levy had worked

21

Timothy Williams, “NYC, Teachers Reach Contract Deal,” Associated Press, 11 June 2002. 22

Alison Gendar and David Seltonstall, “Mayor Gets Schools Reins,” New York Daily News, 13 June 2002. 23

Abby Goodnough, “Schools Plan Loses an Ally,” New York Times, 15 May 2003. 24

Ibid.



13

closely with UFT on many matters of policy, but Klein relied more heavily on his internal team

of executives and external consultants, many of them from the business world.25

In part, this arrangement reflected Klein‟s beliefs about the changes necessary to improve student

performance. “At the heart of the problem,” he said in January of 2004, “are the three poles of

civil service: lockstep pay, seniority and life tenure. Together they act as handcuffs and prevent

us from making the changes that will encourage and support excellence.''26

As an alternative,

Klein attempted to gain support for a “thin contract” of eight pages as a replacement for the

existing 205-page contract. Weingarten rejected the proposal, and talks broke down in early

2004.

With Klein taking aim at three pillars of union contract, it was clear that Weingarten could never

be a full partner in the reform efforts. Unsurprisingly, her response was less than enthusiastic: “I

am really disappointed,'' she said. ''It's time to stop the rhetoric and roll up your sleeves and work

with us to help the kids.''27

Another union leader was even less diplomatic: In a newsletter to the union membership, Tom

Pappas, chairman of the UFT‟s Unity Caucus, wrote, “We're in a war with the Department of

Education.”28

Culture Clash

The tension was rising inside the DOE as well. Hoping to overcome the system‟s inertia, Klein

had brought in his own team of managers, many of them ambitious young professionals with

little background in public education.

Matthew Onek, a 31-year-old graduate of Stanford and Yale Law School, became one of Klein‟s

most trusted aides. Elisa Mandell, a 27-year-old graduate of Northwestern, served as Chancellor

Klein‟s liaison to the Panel for Educational Policy. And 31-year-old Garth Harries of Yale and

Stanford Law School served as a project manager. The media gleefully reported that most of the

young newcomers earned over $100,000 per year.29

These young lawyers and consultants reported to an even higher level of non-educators who

served as Klein‟s core leadership team: His chief-of-staff Maureen Hayes was a former

investment banker at Wolfensohn & Company, and LaVerne Srinivasan, the deputy chancellor

for management, had come to the DOE with Klein from Bertelsmann, Inc.

Everyone admitted that the new blood brought energy to the system, but critics questioned the

wisdom of putting important policy matters into the hands of people with no background in

public education. “They are so committed and they are so rah-rah-rah,” said Jill Chaifetz, the

25

Ibid. 26

David M. Herszenhorn, “Chancellor Urges Changes in Teachers' Pay,” The New York Times, 28 January 2004 27

Ibid. 28

Carl Campanile, “Klein Pleads for Support as Union Declares War,” The New York Post, 8 September 2003. 29

David M. Herszenhorn, “Not So Long Out of School, Yet Running the System,” The New York Times, 25 March

2004.



14

head of Advocates for Children, a monitoring group. “And they are all so completely

clueless.”30

But Klein defended his hiring strategy. “If you are trying to institute some fundamental change,

which we are, you want people who look at the world from a variety of perspectives,” he said. “I

have tried to surround myself with balance.”31

Several long-time DOE executives retired out of frustration with the new direction. Said one

anonymous former district executive, “They looked upon career educators as being fruitless,

mindless, and helpless.”

Mayoral Control?

While Klein and Bloomberg had made significant progress in implementing key elements of the

Children First plan, there were those who thought the reforms didn‟t go far enough. In

particular, some critics criticized the administration for failing to end “social promotion.”

Social promotion was the practice whereby students would be advanced from grade level to

grade level, even if they hadn‟t met the minimum standards of academic competence. While

Klein and Bloomberg had publicly agreed that the policy needed to change, they had not yet put

a plan in place.

Herman Badillo, former Chairman of the Board of Trustees of the City University of New York

and deputy mayor under Ed Koch, was particularly critical. “Apparently, they abolished the idea

of eliminating social promotion, which means, in my view, there are no standards," Mr. Badillo

said. “I can't imagine why it's tolerated. It makes a farce out of the whole concept of education."

In January of 2004, Bloomberg devoted a major section of his State of the City speech to this

issue: “We‟re putting an end to the discredited practice of social promotion. We‟re not just

saying that this time. We‟re going to do it.”32

Specifically, children who still scored at the

lowest level of 1 on the City-sponsored tests for 3rd

-graders would be held back in third grade.

To prevent the massive retention of 3rd

-graders, Klein created a special summer program – the

Summer Success Academy – to intervene with failing students and help them pass the test and

move on to fourth-grade. 33

But the idea also had its detractors, and they immediately went on the attack. A coalition of PTA

groups opposed the plan, and the teachers‟ union filed a lawsuit demanding that the 2004 test

results be thrown out. Some even accused the Mayor of using the policy to artificially improve

the scores of 4th

-graders (by weeding out children who were struggling) and thereby improve his

30

Ibid 31

Ibid 32

Jeff Archer, “Mayor‟s Firm Hand Over N.Y.C. Schools Sparks New Debate,” Education Week, 24 March 2004. 33

Kathleen Lucadamo, “Summer School Program Unveiled To Keep Failing Third-Graders Moving,” The New York

Sun, 16 January 2004.



15

political positioning. "I am just shocked that this is such a blatantly political use of 8-year-olds

on the part of a mayor‟s administration to stay in power," said one Brooklyn parent.

More importantly, it became clear in the following months that several members of the Panel for

Educational Policy, the governing body for the DOE, would vote against the plan. Three

prominent appointees of the Mayor – all non-whites – appeared to be considering a vote against

the policy change, concerned that it would be ineffective and might disproportionately affect the

educational progress of disadvantaged, minority children.34

If the three appointees - Augusta Souza Kappner, Susan Torruella Leval, and Ramona Hernandez

- did oppose the plan, then it was almost certainly doomed to defeat.

Scandal in the Chancellor’s Office

While the social promotion debate raged on, Chancellor Klein was beset by a mounting scandal.

It started in the summer of 2003 when the New York Sun reported that Diana Lam, Deputy

Chancellor for Teaching and Learning and a key proponent of the DOE‟s curriculum reforms,

had helped her husband get a job as a Regional Instructional Specialist (RIS) in the Bronx, a

position that paid over $100,000.35

When the story came out, the district initially denied it, claiming that Lam‟s husband, Peter

Plattes, was simply a volunteer. "Peter agreed to help out and won't be paid a dime," said a

district spokesman.36

Plattes resigned the position, but then later took a job teaching at a Bronx

high school. Shortly thereafter, he was forced to resign once again when Chancellor Klein

learned of the hiring decision.

A full investigative report by Special Commissioner Richard Condon, released in early March of

2004, revealed that although he had never received a paycheck from the DOE and ultimately

agreed to donate his time as a volunteer, he was offered a paid RIS position, accepted the

position, and had begun to perform the duties associated with that position.37

The report was particularly damaging because Klein and Bloomberg had been so bold in their

effort to “clean house,” laying off hundreds of teacher‟s aides in their first year and replacing

long-time executives with smart Ivy-Leaguers in their twenties. Bloomberg even stated that he

had a policy of “zero tolerance” for conflicts-of-interest in the school system.

"They got rid of everyone in the system because they said there was all this patronage," said one

lower Manhattan elementary school teacher. "Now it looks like they just wanted control for

themselves."38

34

David M. Herszenhorn, “Mayor's Aides Fight For New Standards On Pupil Promotion,” The New York Times, 13

March 2004. 35

Andrew Wolf, “Nepotism Puts Klein in Sticky Spot,” The New York Sun, 8 March 2004. 36

Joe Williams, “Educrat‟s Hubby Snags Summer Job,” The New York Daily News, 2 August 2003. 37

Letter to Chancellor Joel I. Klein from Richard J. Condon, Special Commissioner of Investigation for the New

York City School District, 5 March 2004. 38

Ibid.



16

Swift Action

Thus did Klein and Bloomberg find themselves at a crisis point in March of 2004. They had

been weakened by critics who assailed the wisdom of their reform plans (e.g., ending social

promotion), and the ongoing scandal surrounding Deputy Chancellor Lam threatened to

undermine their moral authority as new leaders for a moribund system.

The Mayor‟s poll numbers – which had only recently shown a slight improvement – still showed

that his approval ratings were lower than 40%. And he had staked his political future on his plan

to remake the school system.

In such a precarious position, what could the men do?

Lam had been the most important champion of the curriculum changes made by the DOE. With

her background in K-12 education, she gave Klein‟s administration badly-needed credibility in

curriculum and instruction. It was difficult to imagine moving forward without her. But, in light

of the scandal, her presence also threatened everything that they had built so far.

Ending social promotion was also a critical, high-profile element of the reform plan. If the Panel

for Educational Policy was successful in blocking the proposal, both Bloomberg and Klein knew

that their leadership would be called into question.

The two men decided to act boldly and decisively.

On March 8th

, Klein asked for the resignation of Deputy Chancellor Lam, as well as chief

counsel Chad Vignola. "I'm sorry this event occurred," Chancellor Klein told the press. "My

decision with respect to Ms. Lam was based on the fact I thought she would no longer be

effective in the job."39

Exactly one week later, on March 15th

, Bloomberg did what was necessary to ensure that the

vote on social promotion would go his way. Just hours before a planned meeting of the Panel for

Educational Policy, Bloomberg replaced two of his appointees who had signaled their objections

to his policy. In their place, he appointed two individuals who supported the policy. It passed

8-5.

Of course, the decision provided fodder for the administration‟s critics, who compared

Bloomberg to a military dictator. "How is this different from what a military junta does?" said

Eva S. Moskowitz, the head of the City Council‟s education committee. "This was a coup."40

But Bloomberg stood strong. “Mayoral control means mayoral control,”41

he told the press.

39 Jeff Archer, “Key N.Y.C. School Official Forced to Resign,” Education Week, 17 March 2004. 40

Jeff Archer, “Mayor‟s Firm Hand Over N.Y.C. Schools Sparks New Debate,” Education Week, 24 March 2004. 41

Ibid.



17

Good News

Within a few months of surviving their biggest crises, Klein and Bloomberg started to see the

political pressure abate, as good news began to emerge.

The first positive signs had come in December of 2003, when the National Assessment of

Educational Progress (NAEP) released data on 10 large school systems in the country.

Somewhat surprisingly, New York was the only major metropolitan system that scored above the

national average for central cities, outperforming districts including Los Angeles, Atlanta, and

Boston42

.

Soon, state and city tests started to show positive trends as well. In June of 2004, the DOE

released test results that were overwhelming positive: In math, three of four grades showed

improvements of six percentage points or more in proficiency scores. And in English Language

Arts, both 3rd

-graders and 8th

-graders showed their highest scores ever recorded, as well as the

biggest one-year gains43

.

When Bloomberg announced that the end of social promotion would be extended to the 5th

-grade

(in September of 2004) and 7th

-grade (in August of 2005), there was virtually no opposition from

the community, partially due to the success of academic intervention and remediation programs

for 3rd

-graders, which prevented a massive retention problem in the elementary schools.

And, in April of 2005, The Broad Foundation announced that New York had been selected as a

finalist for the nation‟s largest education award, The Broad Prize for Urban Education. Based on

a rigorous study of test data, the National Center for Educational Accountability (NCEA) had

determined that New York City was performing at a higher level than other high-poverty districts

in the State and that achievement gaps had narrowed in recent years when compared to the State.

In 2004, Mayor Bloomberg‟s poll numbers started to rise, with his approval rating rising above

40% for the first time since the first few months of his administration.44

In 2005, his approval

rating would continue to improve, reaching the previously unthinkable level of 65%.45

Moving Forward

Upon his election in November of 2001, Mayor Bloomberg had said that reforming the schools

was a two-term job. With a Mayoral election scheduled for November of 2005, it was uncertain

whether the voters of New York would give their team the chance to finish the job.

Even with all the good news, Klein knew that the job was far, far from done. The district‟s high

school graduation rate – as measured by the Manhattan Institute methodology – was just 65%

overall, and the gap between graduation rates of White and African-American and Hispanic

42

Joe Williams, “NY Schools Top the Rest,” New York Daily News, 18 December 2003. 43

NYDOE press release, “New York City Students Show Significant Gains in Mathematics Exams This Year with

Three of the Four Tested Grades Showing Gains of Six Percentage Points Or More,” 3 June 2004. 44

Michael Saul, “Mike Riding Comeback Trail,” New York Daily News, 15 March 2004. 45

David Saltonstall, “Bloomberg Builds 27-Pt. Lead in Poll,” New York Daily News,” 12 October 2005.



18

students had increased. 46

What‟s more, proficiency rates for minority 8th

-graders had improved

only slightly in three years, continuing to lag white students by over 20 percentage points.

With four more years, Chancellor Klein knew that his team would continue to build on the

Children First reforms they had already implemented: (1) launching and expanding the

empowerment schools to provide principals with greater autonomy in exchange for

accountability for student achievement, (2) implementing an accountability initiative to set clear

expectations for schools and measure their performance, (3) recruiting and developing more

talented principals through the Leadership Academy, and (4) continuing the development of

portfolio of high quality options for students and families, including new small schools, charter

schools, gifted and talented programs, and schools and programs for over-age, under-credited

students.

But he also hoped to tackle three specific problems at the Central Office. First was a redesign of

the Department of Human Resources, switching its emphasis from compliance and paperwork to

the recruitment and development of outstanding employees for all levels of the organization.

Second, Klein also hoped to implement best practices from districts that had given more

budgetary discretion to schools, including Edmonton, Canada and Cincinnati, Ohio. And,

finally, he planned to implement a “much richer accountability system” that would focus on the

“value added” by each teacher and school.

However, Klein understood that the system was still resistant to real change: “Because of a

mixture of incentives and economic realities,” he says, “it‟s hard to get people where you want

them to be.” Ron Beller – a former investment banker at Goldman Sachs who led the

implementation effort in 2003 – was even more candid about the problems that remained. “This

is all about the union contracts,” he says. “It‟s the dirty little secret. They make it impossible to

run the organization efficiently and to hold people accountable.”

But – even with all the challenges still in front of them – no one could deny that Klein and his

team had sparked a major shift in attitude among district employees, parents, and even the

community at large. “People thought it was something wrong with the kids,” says Maureen

Hayes. “I don‟t think people believe that anymore.”

Says Beller: “There was an affliction of low expectations. And Joel is a hero for pointing out

that it doesn‟t have to be that way.”

46

Analysis by the National Center for Educational Accountability (NCEA) for The Broad Foundation.

broad case study

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