Imagination

One little spark, of inspiration
Is at the heart, of all creation.
Right at the start, of everything that's new.
One little spark, lights up for you.

Two tiny wings, eyes big and yellow.
Horn of a steer, but a lovable fellow.
From head to tail, he's royal purple pigment.
And there, voila!, you've got a Figment.

We all have sparks, imaginations.
That's how our minds, create creations.
For they can make, our wildest dreams come true.
Those magic sparks, in me and you.

Imagination, imagination.
A dream, can be a dream come true.
With just that spark, in me and you.

The Sherman Brothers
Journey into Imagination with Figment

houston@figment-consulting.com

One is a lonely number

When parents tell you they are leaving your school due to lack of socialization, they are not asking for more field trips.

Nor are they seeking more clubs to join.

What they are looking for, what they are asking for is connections, not socialization.

Become a human connection virtual school and you create the potential to be a place where families want to belong.

To JP: Know who you are, accept who you are, and be who you are. The world needs what you have to offer.

To AK: Be as committed to your art when no one is watching just as much as you are when on stage. Success is found in the work done off stage, it is merely appreciated when on stage.

houston@figment-consulting.com

The problem with online schools . . .

In a recent article in the Cleveland Plain Dealer, Susan Patrick, head of International Association for K-12 Online Learning (iNACOL), disagreed with Nina Rees, head of the National Alliance for Public Charter Schools, and her emerging belief that online schools should not be charter schools. 

According to Ms. Patrick, "The problem is not that online schools are getting authorized as charter schools. The problem is that the authorizers are not demanding adequate transparency, evidence of quality of work at a college-level ready and are not shutting down or intervening in poor performers."

While I agree with her rebuttal of Ms. Rees' assessment that online schools should not be charter schools, I disagree with her statement of what the problem is with online schools.

Transparency, evidence and intervention are not the problems. They play a role but solving them will not lead to successful online schools.

Now, contrast her opinion with a K12 press release addressing what they see as the problem, also quoted from the Cleveland Plain Dealer article.

"Many families choose online schools because they are fleeing a school or situation that wasn't working for their child, often in distress, or because of other reasons -- bullying, special needs, medical issues, social or emotional challenges, safety concerns, academic problems, etc."

According to K12 in the same release, "For many families, online schools are schools of last resort, the only available public school alternative, thus filling a critical need within the public education system."

Are online schools merely schools of last resort? If so, how would better transparency, evidence of quality and intervention improve them?

Perhaps Susan Patrick and K12 are both wrong.

Better oversight is not what is necessary. Correct oversight is. We need authorizers who understand not the current online model, but rather what the correct model should look like and how to achieve it. Transparency, evidence, and intervention are still being held up by a crumbling foundation. Authorizers need to understand how to construct a foundation that will support success in online schools.

Also incorrect is the idea that online schools are schools of last resort, as K12 would have you believe in their retort to ongoing criticism of their performance.

Perhaps that is the case for many K12 schools, but that has more to do with their messaging, marketing, and recruitment than it does with the reality of online schooling. If you are targeting students who have been bullied, students with medical issues, students with social or emotional challenges, offering them promises that cannot be kept, then the result is what you currently see going on with K12.

See my blog post here for my ideas on what a virtual school should look like -- Virtual School Manifesto: Nine Essential Ingredients.

And, finally, I would also disagree with Ron Packard's (founder and former CEO of K12) way of looking at it as he stated in the same article in supporting the idea he would not want to block students from enrolling in online schools, "Being in the school is a right. Staying in it is a privilege. That's how I believe you have to look at it."

Being in the school is not a right, it is a choice. Staying in it is not a privilege. It too is a choice.

Virtual schools who see both as choices have the opportunity and potential to recruit differently, enroll differently, retain differently, and serve differently.

So, what is the real problem with online schools? The current model is broken, and it is falling apart.

We have to re-imagine the virtual learning experience. It's time.

houston@figment-consulting.com

My office is EPCOT

Thanksgiving is a mere two days away. Today I find myself sitting across from my namesake Journey Into Imagination with Figment conducting executive coaching calls, re-imagining virtual schools, and helping a new client develop a customer-centered culture -- and doing it all while I listen to the EPCOT music overhead, watch people pour into the Figment attraction, and enjoy the reason why I started my own firm over two years ago.

I am in Florida for over a month working on a special Mouse-related project along with my normal consulting efforts. Today though I have the privilege of working from EPCOT, because today this is my office.

Two years ago I chose myself, as Seth Godin would say, because I grew tired of the corporate life and became disillusioned with the evolution of K12. Since then I have had the honor of working with some wonderful clients who are out to truly "do virtual right." They too are weary of the current model, and desiring of something far greater. Those are the types of virtual schools and companies I want to do business with -- ones that want to make a difference, a real difference.

The fun thing about being a consultant is you also get to choose your clients. Oh, I know most would say the client chooses you, and that is true to a point. However, you also get to choose your clients. You determine who you are willing to work with, and who you are not. The selection process is a two-way street, and by seeing it that way it actually increases your potential.

Since leaving K12 I have become wealthy in ways far more than mere financial wealth, though that too has increased dramatically.

The wealth of freedom.

The wealth of independence.

The wealth of doing the work that matters.

The wealth of making a difference.

The wealth of working with clients who are remarkable.

The wealth of providing a service that is appreciated.

The wealth of having my family with me for this journey.

The wealth of being there for my children, and not missing anything in their lives.

The wealth of relocating by choice.

Today my office is EPCOT. The beauty of it all though is that tomorrow my office is wherever I want it to be. And for that, I am grateful.

Now, I have an hour until my next call -- perhaps it is time to experience Journey Into Imagination with Figment.

houston@figment-consulting.com

The K12 Inc. ship is sinking

They say the devil is in the details. The earnings announcement by K12 provided some interesting details, many of which were devils.

In response to the announcement I sent out a Tweet that said the same as my blog title for today: The K12 Inc. ship is sinking. It appears it stirred something within those who actually saw the Tweet because I had a flood of emails arrive yesterday -- on both sides of the argument.

In more than 140 characters, here are the main reasons why it is sinking.

1. The elephant in the room.

K12 management can talk all they want to about double-digit growth in international and private pay schools, and institutional and software sales (even throw in non-managed programs for good measure), but the elephant is managed schools and that is on the decline.

Enrollments in managed schools were down 2.2% in the three months ending June 30 when compared to last year, and down 3.9% yoy. Out of the $948 million in revenue, managed schools accounted for almost $814 million of that total revenue.

Last year K12 was able to increase revenue even with declining enrollment which was a job well done. However, that is not a long-term strategy, nor is it sustainable.

As we look to this academic year, they are already substantially behind in enrollments; Tennessee Virtual Academy will probably have to close doors next year which means a further loss in enrollments; and the states on the horizon (such as Alabama) do not have the population or momentum to provide any measurable increase in enrollments.

So, they are touting the revenue from sources other than managed schools. In fact, CEO Nate Davis referred to FuelEd as "the revenue driver moving forward."  But, when you add them up, they only total approximately $130 million in revenue. And, at their current rate of growth, it will take years for these entities to unseat the managed-school elephant that dominates their revenue stream -- which is on the decline.

Keep in mind, all of these numbers include enrollments from newly launched schools in North Carolina and Maine.

2. The legitimacy of the non-managed school growth is in question.

Agora Cyber Charter School severed their management ties with K12 last year. This means enrollments in Agora (over 10,000) shifted from managed schools to non managed schools. See Note 2 under the Enrollment Data. 

Non managed schools showed a 38.5% increase yoy in enrollments and a 36.4% increase yoy in revenue. Remove the average of 10,000 in enrollments from Agora from the equation, and non managed schools actually show a decline in enrollments yoy (along with revenue decline).

Why do I point this out? Agora's first step was to sever management ties with K12, just as COVA (Colorado) did a few years ago. What some are missing though is Agora's intent to sever curricula ties with K12 within the next two years -- once this final contract runs out. This means that the near-term horizon has K12 under the gun to replace 10,000+ enrollments in non managed schools just to remain where they are currently.

Commonly referred to as a false positive. Growth looks great on paper but in reality it was a mere shift in classification that accounted for much of the growth. Couple that with the impending loss of these enrollments, and the current positive has a glaring negative potential on the horizon.

3. Ongoing academic struggles of K12 virtual schools.

I mentioned earlier that Tennessee Virtual Academy (TNVA) will probably be shut down after this year -- it was only kept open by legal maneuvering this year so it is hanging on by a thread. It could stay open if it demonstrates a remarkable turnaround in academic success.

However, that is highly unlikely. This past year intense efforts were undertaken to improve the state test scores by TNVA students on the TCAP tests. The results were dismal. So, to expect a turnaround this year would be foolish.

My prediction is the recently opened schools in North Carolina and Maine will be under the gun this time next year because of poor academic results. Why? Because the K12 marketing machine has it wrong.

4. Marketing, messaging, and purpose is still off base.

In the earnings transcript, Nate Davis refers to the new K12 marketing strategy of using "data analytics to find those students most likely to succeed." He also stated the new messaging "will result in a student body better aligned to our core curricular strengths and therefore substantially more likely to gain academically over time and stay with the program longer."

Sounds pleasant and nice. But, I began this blog with the idea that the devil is in the details. So, let's see what details emerge when we uncover the "core curricular strengths" of this. The answer (and the problem) is found when Nate answers an investor's question related to the new type of student K12 is searching for through it's marketing efforts.

Nate's reply: " . . .centering around a campaign we call Uniquely Brilliant, communicating with parents that this program is about the individuality of your student, it's not my sitting in the classroom of verified students and everybody at the same age. This really is about your child's unique speed." (italics mine)

WRONG. The K12 virtual schools, especially at the high school level, are not set up around the child's unique speed. Remember, we used K12 high school for one of our children, so I have firsthand knowledge here.

I am not going to dive into what the messaging should be. K12 can call me if they are serious about recruiting the right students. Suffice it to say though, this ongoing off-based messaging will continue the trend of high attrition rates, and it still remains about the number of seats filled.

If K12 wants to attract the right type of students, then they need to become the right type of virtual school. There remains a huge disconnect between what is being messaged and what is reality once families enroll.

So, I end this as I began it. The K12 Inc. ship is sinking. It's not going under this year but it is taking on water.

At some point in the near future the K12 narrative they would like you to believe will be shown for what it is.

Then, perhaps we can get on with developing virtual schools that matter, ones that serve their customers the way they deserve.

houston@figment-consulting.com

When virtual school families experience buyer's remorse

Many virtual schools utilize email nurturing campaigns, or behavioral campaigns, to help move new leads toward purchases (or enrollments when it comes to virtual schools). The level of sophistication associated with these campaigns is astounding. Thousands, even millions, of dollars are spent on these campaign efforts to increase conversion rates for new students.

And when the new leads convert?  -- the sound of silence occurs. It could be weeks or even months before families hear from the schools. And when they do it is typically school-related information provided to families in a cold, dry manner - meant to inform not to inspire.

Retention rates at virtual schools are astoundingly low heading into the academic year because so many of these schools forget there are two "buying" seasons. First, the new family goes through the initial decision process -- to enroll or not to enroll? Once they do commit, the new family then undertakes an entirely different route centered on the concept of remorse, specifically buyer's remorse.

Virtual schools that understand this, and truly care about their new families, will not only conduct a nurturing campaign to convert to enrollment, but they will also conduct one that helps families overcome their remorse in "buying" the virtual school. And remember, with virtual schools being free (tuition-free) it is much easier for families to step away from their recent decision.

The first step in developing a buyer's remorse nurturing campaign is to understand the key fears families go through when experiencing this remorse.

Do you know them? If not, don't start your nurturing campaign just yet or else it will be a waste of time and money.

houston@figment-consulting.com

The back door exodus of virtual schools

35%, 40%, even 50% of students in virtual schools currently leave sometime during the school year. I have seen this churn rate occur and I call it the exodus out the back door.

Most virtual schools spend all of their time trying to figure out how to keep students from leaving through this back door to no avail.

What they tend to forget is the critical element in this churn is not the back door, but the front door.

Spend more time on messaging properly, recruiting the right type of students to come in through the front door, and then you are off to the right start in reducing the churn rate.

houston@figment-consulting.com

Should we "put students first" in virtual schools?

What if the current virtual school providers have it wrong?

What if we should not put students first after all?

If we do not put students first then what should be there instead?

In order to find solutions that work, we must first make sure we are asking the right questions.

houston@figment-consulting.com

An early bird, a worm, and virtual learning

The well-known saying goes, An early bird catches the worm.

And while I know the meaning behind the phrase, I have often wondered about the worm. He too got up early and look what it cost him.

It's about perspective, and it's all relative really in that it is reference dependent. If you are the bird, well, rising early might prove beneficial. However, if you are the worm, perhaps there is validity in sleeping late.

When it comes to virtual schools, too many times we build them from one perspective -- starting inward and looking out. I recently read a blog post titled The Top Five Attributes for Online and Blended Learning that mirrors this inward-outward perspective and provides a glimpse of why virtual learning is falling short of its original promise.

In the post it posits that rigorous and engaging curriculum, tracking student progress, teacher availability for intervention, training and clear expectations for the students, and well-trained instructors able to deliver the online courses are the five most important attributes for success.

It all sounds great, and I am sure Fuel Education has the products for each of these attributes, however they are all from the bird perspective, and they forget about the worm.

Show these to educators and it would be hard not to agree with them. Show them to students and I wonder if the reply would be the same.

Or, perhaps the students would see them as good reasons to sleep late.

It is time to re-imagine virtual.

houston@figment-consulting.com

Reader questions on my recent K12 post

I recently posted a blog discussing a few main reasons why K12, Inc. will continue to struggle. I spent over eleven years with the company, opened the State of Georgia for the company where it now serves over 11,000 students, and assisted in the opening of 14-15 other states, along with developing marketing strategies, consumer outreach efforts, marketing partnerships, and more.

I share this because one of the first questions I received on my post was "did I leave on good terms?" The answer was, and is, yes. I look back with fond memories of my time spent with K12, impacting hundreds of thousands of lives, and making a difference in education. What I lament is the direction K12 took when they went public, and what I call the lost potential of what K12 could have been. But, there were no hard feelings upon leaving and I am grateful for my time spent with them.

As expected, my post generated some insightful questions. Normally I simply answer them directly but this time I thought I would share some in a post, along with some of my answers. And, for those who did send along questions -- thank you.

Someone once said, "I am full of questions, short on answers, yet have many opinions." So, feel free to take my answers as opinions.

1. Are you saying the main reason K12 struggles is because they went public?

Actually no. My belief is there are many little reasons that add up to be a main reason. Going public was and is a key reason because it transferred their focus from the customer to the investor. Public companies struggle all the time with serving two masters -- customers and investors. The great ones find ways to support both -- but they seldom do it all the time. The Walt Disney Company is sitting at an all-time high in stock value, and pleasing billions of customers via movies, theme parks, products, etc. However, stroll down memory lane only 30 years ago and the story is a different one to be told.

Or, look at Starbucks. It took the return of CEO Howard Schultz to right the ship that had quickly gone off course when he stepped away. So, the struggles of K12 are not isolated to them simply because they went public. However, it should come as no surprise that quarterly reports to investors interfered with long-term decision making that is best for the customers - in this case the students.

2. You say they are not putting students first but failed to give any specific points of reference. What would you point to support your claim that they are not putting students first?

Such a fair question. Let me point you in several directions:

A. The primary issue at hand, the prime directive you might say, is student test performance. Yet last January the CEO was given a substantial raise. And, one might argue that it was deserving in terms of added responsibilities (Nate had assumed some of Ron's responsibilities), or you might argues as K12 did that it was justified because Nate's salary was below a few other K12 executives. Perception is reality and this demonstrates where the priorities appear to be.

B. Next, again recall the prime directive is the lack of student performance on state tests. However, K12 proceeded to release late last year educational apps, and a curriculum dedicated to pre-K children (embarK12). While there is nothing inherently wrong with expanding product lines, in what ways do these products help their existing families? How will educational apps improve test scores? How will a pre-K product improve student test performance in middle school and high school? How much time did product developers have to take in order to build out these product lines and could that time have been better spent putting existing K12 students first?

C. Finally, look at the underlying argument from K12 in the annual academic report. It states the longer students stay in one of their schools the better they perform on state tests yet they spend very little money on retaining students. The enrollment center at their Herndon office takes up an entire floor (hundreds of people), they recently opened a new enrollment center in Tennessee to much fanfare, yet their "Customer Care" team has very few members and a non-existent budget. Yes, they may call it a Family Support Center, but one simply has to read the fifth paragraph in the story to understand the families they are supporting (prospective students).

3. Do you really think if Agora leaves it will have that kind of impact on the K12 stock?

Agora constitutes approximately 14% of K12 revenue according to their annual report. Last year they reported over $900 million in revenue -- while this demonstrated yoy growth, it also has begun to show signs of slowing. First quarter results are due out soon and it will be interesting to see how they compare to last fiscal year's first quarter.

And, if you listen to the investor call related to last fiscal year, the positioning has already begun. What I mean here is their CEO, Nate Davis, is anchoring the thoughts toward K12's desired move to a more blended learning model going forward, perhaps in anticipation of the Agora situation since this was in response to a question related to Agora's anticipated departure.

In addition, as I mentioned in my blog post, I believe Agora is the lead that will allow others to follow. It would make it easier for Ohio Virtual Academy to do the same thing if they have a roadmap from their neighboring state.

Then, what would this do politically to K12 in other states such as North Carolina (where they are attempting to be one of two providers selected) or Tennessee (where the TN Ed Commissioner has threatened to close TNVA due to poor performance).

4. Why are you so intent on being negative toward K12? Think about the thousands of families they have helped.

It is such a great question and yet I believe a distinction is needed. Sharing news that is negative does not make the one sharing it a negative person. The news of student performance, Agora leaving, TNVA closing, COVA separating, and market value decline of over 15% are all negative, yet they are all true and well-documented.

Predicting a large stock price/market value drop upon the departure of Agora is based on the history of the K12 stock, statistics, behavioral economics, and common sense.

And I do think about the thousands of families K12 has helped over the years and in no way am I implying that K12 has done nothing positive. Heck, I was a part of it for over eleven years. However, my thoughts quickly turn to what I refer to as lost potential -- what about the thousands of families they could have helped had they maintained their original course? What about the thousands of families who exited out the back door of the schools because more attention was spent on the ones coming in the front door?

My intent is not to be negative toward K12, or any other provider. My intent is to transform virtual/blended education so it can fulfill its original promise. I have seen it from both sides (professionally and personally) and I intend to spend my time developing learning experiences that truly put the students first, engage them in personal ways, and launch them into their next endeavor.

5. What would a virtual school look like if you built one from the ground up?

Thanks for asking this. For a quick answer, it would not mirror what is currently out there. However, for a more in-depth answer, I would ask you to stay tuned. In the meantime you could peruse many of my blog posts to capture a glimpse of what I would build. However, I am working on a blog post dedicated to this idea and intend to publish it soon. Or, I have been invited to write for several online publications, and may end up sharing it there instead. Not sure just yet where it will end up, but I will let you know and hope you will provide your comments to what I post.



These were just a few of the questions submitted to me after my K12 post and I thought it best to share my answers in this format because they were all good and fair questions.

I launched my consulting firm last year to focus on the idea of serving customers in remarkable ways. And while I work with clients in a variety of industries, my passion is in the world of education -- specifically virtual and blended.

What is out there is not working and tweaking it will not achieve better results. I believe there is a better way, a transforming path (or in today's parlance -- a disruptive path) that can build a virtual/blended school from the inside out. The product should be the story, not the marketing. The existing students and families should be the priority, not the prospective ones. I am currently working with some providers across the country that grasp this concept and we are in the process of building something remarkable -- something worth talking about.

Thanks for reading. Promise the next post won't be so long.

houston@figment-consulting.com

The power of choice in education

Virtual schools spend millions in an annual attempt to have families choose to go to their schools.

However, once families have chosen them, they tend to forget they are schools of choice and families can also choose to leave them -- which an alarming rate of them do each year.

Choice can go both ways and too many virtual schools focus on bringing people in the front door while thousands exit the back door.

Imagine a virtual school obsessed with serving its existing families instead of constantly looking for the next one to enroll.

houston@figment-consulting.com

Tuition-free, online public school

It's a conundrum for virtual schools. They know the word "free" will attract interest and bring in more leads. Nothing wrong with that, especially if you believe any lead is a good lead.

However, when virtual schools are losing 30-40% of their students each year, one has to wonder if the problem begins with the students being attracted to the school?

"Tuition-free" is a lead-capture phrase, and last time I checked all online public schools are "tuition-free" so I am not sure how that sets one apart from the others. It would be similar to the colas touting themselves as liquids.

However, virtual schools are stuck on features and benefits -- and "tuition-free" is one they just can't get away from because the word free supposedly drives leads.

The question then becomes, is it driving the right kind of lead? Do you want a student to enroll in your virtual school primarily because you are free?

houston@figment-consulting.com