case study assignment

9B16C002

SPARK SCHOOLS: KINDLING INNOVATION IN SOUTH AFRICA’S

PRIMARY SCHOOLS Margaret Sutherland wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) [email protected]; www.iveycases.com. Copyright © 2016, Richard Ivey School of Business Foundation Version: 2016-01-22

In May 2015, Ryan Harrison and Stacey Brewer, co-founders of SPARK Schools (SPARK), were yet again debating at their weekly meeting whether they had put sufficient practices in place to ensure the quality of teachers at their innovative primary schools. It was 2015, and in the past three years, they had opened four schools attended by 1,000 pupils, but were aiming to open 60 more schools within 10 years. They realized that scaling up rapidly would be hugely complex, and they wondered whether their model for managing the teachers was optimal, responsible and replicable.1 THE EDUCATION SYSTEM IN SOUTH AFRICA Harrison and Brewer had completed their MBAs a year apart, and both had learned from their macroeconomics professor about the problems plaguing the education system in South Africa. South Africa consistently ranked among the worst performing education systems in the world. Every year, the World Economic Forum’s Global Competitiveness Report2 ranked 144 countries on 114 variables. In 2014, South Africa was ranked 56th overall but the quality of the education system was rated 140th; the quality of primary school education, 133rd; the quality of maths and science education, 144th; and Internet access at schools, 117th. A May 2015 Organisation for Economic Co-operation and Development report3 on human capital had ranked South Africa’s education 75th out of 76 countries, further illustrating the country’s education challenge.

1 Information was collected via interviews with Ryan Harrison (founder and chief operating officer), Stacey Brewer (founder and chief executive officer), Amanda Venter (director of leadership and development), Beverley Slyper (human resources officer) and Nicole Gaspar (teacher) on May 20, 2015. Further information was obtained via the SPARK website (www.sparkschools.co.za) and a presentation given by Harrison and Brewer at the Gordon Institute of Business Science, University of Pretoria, Pretoria, South Africa, on May 19, 2015. 2 World Economic Forum, “The Global Competitiveness Report 2014–2015,” Switzerland, 2015, www.weforum.org/ reports/global-competitiveness-report-2014-2015, accessed January 19, 2016. 3 BusinessTech, “South Africa’s Education System vs the World,” May 14, 2015, http://businesstech.co.za/news/lifestyle /87310/south-africas-education-system-vs-the-world/, accessed January 19, 2016.

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Page 2 9B16C002 All of these rankings indicated a crisis in education, which had severe ramifications for all aspects of life in South Africa, which, as measured by the 2015 Gini coefficient, was the world’s fourth most unequal society.4 A wide range of world-class private schools served the upper classes, while an increasing range of private schools offered an alternative schooling option for middle-class and upper-middle-class parents, many of whom viewed public schooling as undesirable;5 yet the government made no provision for lower-middle-class parents who were dissatisfied with the government-funded public education system. According to Brewer, “the wound of the state of education in South Africa is so deep and so big that a plaster [bandage] will not solve the problem.” The key stakeholders in this failing educational sector were the teachers. The deputy chairperson of the South African Council for Educators commented that “Recognition of the centrality of teachers is the key to improving the quality of the education system. Teachers are both the problem and the solution . . . [in] an education system largely hostile to the achievement of quality educational goals.”6 The macroeconomics professor, after having discussed the ramifications of the failed public education system, had challenged the class: “So what are you going to do about it?” THE START-UP Harrison and Brewer, who knew each other through Brewer’s husband, decided to respond to the challenge, despite having had no experience in the education sector other than as learners. They believed that a fresh approach to education, combined with their newly attained business acumen, could offer a sustainable, high-quality solution to the education crisis in South Africa. They both saw an opportunity to simultaneously benefit society on a large scale and to be profitable. They believed that a for-profit organization would be more sustainable than a non-profit organization, which would always depend on donors, and that a model that relied on donations could not work on a national scale — the level at which they wanted to make an impact. Their dream was to bring about systemic change in South Africa’s education system — not by lobbying the government but by creating low-fee, high-quality, scalable, sustainable schools, which could act as a role model for government; they wanted to create a ripple effect. They aimed to run the schools at the same cost per pupil as the government’s cost per pupil in the public education sector. They opened their first SPARK school in 2013 (while both were in their 20s), intending to build a network of primary schools built on the belief that quality and affordability were not mutually exclusive for lower-income families. After an “angel investor” decided to fund their investigation and design phase, they decided to implement a new successful system of education being run by Rocketship Education in California’s Silicon Valley. This schooling system was differentiated by an innovation that was a blended learning approach, where, in addition to the typical face-to-face classroom experience, each child worked for 90 minutes a day on adaptive computer-delivered education in the literacy and numeracy fields in self-paced learning; each child would learn in the learning lab at their own ideal rate, with their progress being continually monitored. The system then provided the teachers with intensive data on each pupil, which enabled differentiated class teaching to meet each child’s needs.

4 Human Sciences Research Council, “Income Inequalities and Limitations of the Gini Index: The Case of South Africa,” Pretoria South Africa, 2015, www.hsrc.ac.za/en/review/hsrc-review-november-2014/limitations-of-gini-index, accessed October 24, 2015. 5 Centre for Development Enterprise, “Affordable Private Schools in South Africa Report,” Johannesburg, South Africa, 2013, www.cde.org.za/wp-content/uploads/2013/07/Affordable%20Private%20Schools%20in%20South%20Africa.pdf, accessed January 19, 2016. 6 A. Cereseto, “How Are the Teachers? Focus on Learning and Teachers,” The Journal of the Helen Suzman Foundation, 2010, 56, pp. 26–30.

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Page 3 9B16C002 One of the many spinoffs of the blended learning approach was that it reduced both infrastructure and human resources costs, the major financial components of running schools. Through careful, detailed scheduling, the infrastructure was used at 100 per cent capacity. Some classes started their day with physical education, others ended with it. Similarly, with the students working on computers for a quarter of classroom time, the teachers’ jobs were redesigned so they could focus on their expertise (for example, teaching only literacy or being only in the learning lab instead of teaching the full range of subjects). This teaching approach, combined with eliminating nearly all administration work from teachers’ duties, led to a significant increase in the utilization of the teachers’ capabilities. Harrison and Brewer not only wanted to bring about systemic change for learners in the country but also realized that doing so would require systemic change in the way teachers were developed; they wanted to professionalize teaching. THE FIRST SCHOOL The first low-fee school opened in 2013 with 160 young learners and 20 staff members. The biggest problem with launching the first school was attracting teachers, as Harrison and Brewer could not show them a school. “We were recruiting for an organization that didn’t exist,” said Brewer. “We showed them videos of how the system worked overseas. They were all taking a huge risk on us.” Many teachers were nervous to join SPARK and sought benefits such as pension and medical aid, which were not being offered. Harrison and Brewer recruited from August to October and conducted the training during the December holidays. They were entering into the unknown and later admitted that they had underestimated the time needed for team-building and culture-setting. During the pre-opening training, two issues became apparent. Firstly, the newly recruited teachers were not adequately prepared to teach according to the SPARK approach; the teachers knew a lot of theory but lacked the adequate practical skills, so they had to begin again with basics, setting up lesson plans and driving the culture actively. Secondly, the principal, who had been highly recommended, did not have the capacity to lead such an innovative school and resigned just before it opened. Brewer, who had never taught before, became the principal overnight. Although the blended learning approach relied heavily on computer-based learning, Harrison and Brewer knew that teachers were absolutely critical. Technology could not replace teachers — they brought all the soft skills that were the key to drawing out the potential in each child. Many of even the very experienced teachers could not adjust to a completely new way of teaching, and the school had a high churn in the first year. A teacher who left at the end of the first term was replaced by one of SPARK’s academic leads, and when the office manager left, a parent stepped into the role, but these patches were not long lasting. CULTURE OF THE SCHOOL AND STAFF By 2015, SPARK’s human resources practices had come a long way. Amanda Venter, head of leadership and development, joined SPARK in 2013 from England, with the aim to ensure the staff members’ personal development and job satisfaction. She and Beverley Slyper, the human resources (HR) officer, worked 10 to 11 hours most days and often communicated in the evenings about work issues. They both worked toward the goal of having teachers who “are adaptable, innovative, invested, change makers, pace setters who see the bigger picture.” The SPARK creed, emphasizing the values of service, persistence, achievement, responsibility and kindness, was developed and displayed around each school. All staff and pupils were expected to live it out. Brewer said, “This is a ‘no-excuse’ environment, we strive for excellence continually. All staff members have to be mission-aligned.” Harrison pointed out, “There is a pattern of early attrition. Every year in the first term we lose a teacher. If there is a culture misfit between the teacher and SPARK, the signs are obvious very early.” Brewer added, “SPARK is not for everyone — some step up to the plate straight away — others want to go home at two [o’clock].”

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Page 4 9B16C002 The culture was very specific. According to Venter, the teachers used a strategy known as “the joy factor” (from SPARK’s required reading Teach Like a Champion by Doug Lemov)7 to celebrate students’ achievements and to validate student contributions during class conversations. This approach reinforced a culture where students felt the freedom and confidence to “give it a go” in an environment where it was okay to make mistakes. When a learner’s shirt was not tucked in, they were asked, “Are you dressed for success?” rather than being told they were breaking a rule. Two or three times a year, SPARK used SurveyMonkey to run in-house staff satisfaction surveys on eight variables. The surveys showed how the schools compared and alerted senior management to any serious issues. On the latest survey, one of the schools with a “homegrown” principal scored 100 per cent. ATTRACTION, SELECTION AND ONBOARDING To attract teachers, SPARK used word of mouth, social media, focused websites (one of which linked directly to the SPARK HR system), and recently began using a recruitment agency that it had formed a close relationship with. Principals were especially difficult to find, and they had a high turnover rate. Those recommended by highly respected people in the education field turned out not to fit the unique SPARK culture, and recruiting principals who had some international experience also did not work. Two teachers from the first school were appointed to be principals as the schools opened in 2015, and although they were not yet 30, they turned out to be ideal. Venter knew that the best way forward was to “grow our own staff”; it was easier to take in newly graduated teachers and mould them, rather than try to change the ways of experienced teachers. Nicole Gaspar was one such graduate. After her postgraduate training, she had been looking to work at a primary school, when a friend told her about SPARK. After researching the school online, Gaspar couldn’t believe what she read. “It sounded too good to be true, but once I had visited a school I was sold.” Harrison and Brewer had learned over the three years that they could not put too much time and effort into selecting the right staff; it took 18 months to find a financial manager. They had learned not to hire out of desperation and not to lower their standards. “The problem when we started out was we didn’t know what we wanted — we didn’t know what the behaviour we wanted looked like. Now we are much clearer.” In 2014, they had looked at 3,000 applicants to fill 30 positions. Needing to hire 200 teachers for 2016, the process had to be more productive: “We want to move from a 100:1 to 2:1 ratio.” The staff for the January opening of four schools needed to apply by the end of May and selection needed to be completed by September (well ahead of the timelines in the private and government school sectors). The short October school break would serve as a four-day immersion for all new staff into the SPARK way to ensure mission and value alignment. As Brewer continually reiterated, “It’s culture, culture, culture.” Harrison and Brewer developed an innovative way of selecting the teachers, which began with online- only applications — screening for age, qualifications, experience and expertise. After the screening stage, the remaining candidates were put through a process that allowed both SPARK and the would-be employee to see whether the person’s character was right for the SPARK group. Importantly, Harrison and Brewer looked at the match between personal values and organizational fit. “So many applicants have low expectations of the children and themselves.” As Brewer said, “We do not want to employ people who are just looking for a job.” The selection process needed to deselect teachers whose expectations misaligned with SPARK’s. According to Venter, “If they have a forward-thinking mind- set, we can give them the skills.” 7 D. Lemov, “Teach Like a Champion: 49 Techniques that Put Students on the Path to College,” 1st Ed., John Wiley & Sons, San Francisco, 2010.

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Page 5 9B16C002 After being shortlisted, each potential teacher was put through a four-hour selection process where “many eyes [were] on them.” This process consisted of six elements: the candidates were observed interacting with children and other teachers in a situation such as an assembly (known as SPARKs Fly). The candidates also had a “fishbowl” interview with six trained panellists, drawn from HR staff, principals and teachers, who were each allocated three minutes to ask their questions. Some of the panellists might be abrasive to the candidate to test how they coped with pressure and tough feedback. In a group activity, candidates were given a problem to solve. How they went about solving the problem with others revealed many aspects of their character, behaviour and value system. Then they had to teach a 12-minute sample lesson. They were observed by the principal who, at the end, asked them how they felt the class had gone, to determine the candidates’ level of self-insight. The principal provided feedback to the candidates who next observed a lesson given by a SPARK teacher (either in a regular classroom or in the learning lab), and then provided feedback on what they had observed. Finally, the candidates drafted an email to parents introducing themselves and SPARK to check for insight and their use of language. Successful candidates met four qualities: excellence (a track record of high expectations personally and professionally), mission alignment, grit and self-reflection. SPARK also used a system called Shadowmatch, through which they compared the candidates’ behaviours to the identified characteristics and behaviours of their best teachers. The system gave them both the suitability of the candidate as well as their training needs. Gaspar explained, “When I applied at a number of other schools they only interviewed me — they never watched me teach. After such a rigorous process of selection, I felt honoured when SPARK selected me at the end — I couldn’t wait to start.” One of the real problems with rapid growth was the need to learn to delegate. For the first three years Harrison and Brewer were part of every selection procedure but doing so was no longer feasible — they now needed to entrust others with this crucial task. “The letting go is hard — how can we be sure we keep on replicating our DNA if we aren’t there?” All the teachers they employed were qualified; however, Harrison and Brewer had found that “qualified does not mean equipped” to teach really well. Prior to the beginning of the school year, all educators participated in three full weeks of intensive pre-service training, focusing on setting behaviour management and classroom culture expectations. Gaspar found the pre-service training to be extremely valuable:

We were taught the culture. We did role plays of handling tough situations so when they happened we were ready for them. I had to video myself on my phone and then send it to my future principal who gave me feedback. We were taught how teamwork is central to SPARK. We were set up for success.

ASSESSMENT AND REWARD SPARK Schools were feedback-intensive at every level; even Harrison and Brewer in their weekly meeting regularly “[told] each other to pull their socks up.” Gaspar commented that the teachers were held accountable and that the focus at all times was on behaviour:

At the beginning I was very scared of this but now we all hold each other accountable — I observe my colleagues and give them tough love feedback when necessary. I felt one of my colleagues was being too soft on her pupils — I said she needed to toughen up.

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Page 6 9B16C002 On selection, the teachers were offered a salary within a band depending on their qualifications, experience and level of expertise. SPARK paid their teachers just below the government school rates and between the 50th and 75th percentiles on the published Independent Schools Association of South Africa survey. The data might be spurious, so SPARK ran its own salary survey via a leading remuneration consulting organization. With all jobs being classified in a ranked system of T1, L1, L2, L3, etc., the teachers knew the best way to increase their salary was to be promoted up a level rather than hoping for an above-inflation salary increase. The 28-year-old principal of the latest school to open was now earning far more than her peers, who, after graduation, had joined other schooling systems. Harrison and Brewer reflected that three years after opening, half the staff at their first school had received significant promotions. The school provided all teachers with laptops, and free Wi-Fi was available in all schools; however, most teachers did not take up the school’s offer to pay for their Internet access at home. Once the new teachers started teaching, “many eyes [were] on them again.” Every teacher was assessed once a week while they were teaching. Formal performance appraisals were held three times a year on measures such as their coaches’ feedback, meeting their individual personal growth plan objectives, professionalism and their pupils’ academic development. The appraisal system led to an overall rating of between 0 and 5. At the end of 2014, teachers who received a rating of 5 received a bonus equal to one- and-a-half month’s salary. (This bonus differed from nearly all other schools in the country, which guaranteed all their teachers a 13th cheque, equivalent to one-month’s salary). Those who received a rating of 3 received one month’s salary. Those who received a rating of 0 received no bonus and no salary increase. The two members of staff who had received this rating both handed in their notice. From the start of 2015, teachers could be heard saying, “If we work well we’ll get a better bonus”; they were all aware that promotions were likely for all high performers. Gaspar felt that her salary was comparable with the salaries at private schools but was aware that she would receive no pension, medical aid or housing subsidies. Yet, she felt that not having those benefits was balanced by not experiencing all the frustrations of working in government schools, where she had heard teachers received no academic support. She commented, “Teachers there have no voice; they are not meant to have an opinion. Here it’s what you are capable of. My opinion matters here — it really does. SPARK has exceeded my expectations in every way.” She added that the principal’s encouragement to all teachers to balance their personal and work lives was hugely motivating. She was especially appreciative that having found herself unexpectedly pregnant soon after joining, the whole staff was highly supportive of her, and she was grateful for the four months’ maternity leave she was entitled to. One of the characteristics of the SPARK educational system was the ongoing positive feedback to the children throughout the school day — so too with the teachers. Appreciation cards were freely given, and, when submitted, were read out at the weekly Monday afternoon meetings. Staff who went above and beyond were occasionally given gift vouchers. The unique clapping ritual used to affirm the scholars was also used to congratulate teachers. DEVELOPMENT Harrison and Brewer agreed that the amount of teacher training and development had been the key factor in the growth of SPARK to date. Each teacher received 250 hours of training a year in personalized development. One teacher described her experience at SPARK:8

8 B. Thomson, “Teacher Talk: Celebrated, Valued, and Developed,” March 17, 2014, www.sparkschools.co.za/teacher-talk- celebrated-valued-and-developed/, accessed October 26, 2015.

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Page 7 9B16C002

The professional development we receive as SPARK educators is phenomenal. In the decade I had been teaching I was required to do a course each term. At SPARK we participate in professional development each and every week. I have learned more at SPARK than I learned at university and in all my years teaching. These sessions are always on-point, timely, and thought- provoking. In my time at SPARK I have also been afforded the opportunity to participate in a leadership development programme, which is usually only available to upper management in a traditional school setting. In the past I was allowed to select one peer and one member of management to serve as my support system. They made one classroom visit per year and gave feedback on that one lesson. This amounted to nine classroom visits in a decade of teaching. At SPARK we may have this many visits in a month or less. We have an “open door” policy, and at any given day or time, any member of our community is able to sit in on a lesson — this includes the principal, our CEO [chief executive officer], a parent, or even another teacher. This is a great resource and provides vital feedback. I also have a personal coach who I have the opportunity to meet with each week. We discuss lesson plans and their classroom observations. The advice I have gained in these sessions has been invaluable.

The coaches were the principal or deputy principal and gave each teacher 30 minutes of feedback a week based on their planning, execution, classroom culture, investment in the children and themselves, as well as their professionalism. Every Monday afternoon, a professional development workshop was held for all teachers, focusing for a few hours on content, culture, collaboration and community building. Often talks were presented by stimulating speakers on a wide range of topics. As Venter said, “It takes a while to get people SPARKed.” All teachers needed to deliver their lesson plan for the following week each Thursday, and they received feedback from their coach within 24 hours. Every member of staff had a detailed personal growth plan, which was assessed and redeveloped three times a year. The fast-growing organization offered many promotional opportunities; one teacher became the school’s business operations manager. The school also offered a leadership development program for teachers who were deemed promotable to a principal position. In the program, the teachers developed a portfolio of evidence of competencies attained, including running a parent–community meeting, working on budgeting challenges, peer coaching, analysis of pupil data and delivering a master class. Harrison and Brewer were considering opening a teaching training college in late 2015. They realized that these young well-trained teachers might stay at SPARK for only a couple of years and then join other schools in the country; however Harrison and Brewer believed that providing a steady stream of passionate, exceptionally well-trained teachers was another way SPARK Schools could benefit South Africa. HANDLING POOR PERFORMANCE Over the first few years, SPARK experienced a few cases of poor performance. The culture was to give feedback immediately if staff members were not driving the culture, toward either the children or one another, with the aim of correcting the performance. Should the performance not improve, a formal meeting was held with the principal, to restate the job description, the expectations and the deliverables. The next steps were agreed upon, and two weeks later assessments were carried out to determine whether the necessary improvements had occurred. Following this assessment, SPARK followed the industrial relations processes of a written warning, then a disciplinary hearing and, ultimately, dismissal if performance was not corrected. SPARK used an external labour consultant who gave advice, chaired disciplinary meetings and offered advice on any labour law matters.

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Page 8 9B16C002 Three principals did not work out and needed to be replaced. Brewer explained that she would “no longer tolerate culture killers. They destroy everything, the staff morale, parent satisfaction and it even shows in the children’s academic results.” One of the principals demonstrated a range of behaviours that were inappropriate, and it was extremely emotionally draining for both Harrison and Brewer to cope with the fallout from these problems. It took even more emotion to make the difficult decision that “he had to go, now.” SPARK paid him out more than was needed by law, but it was worth it. After he left, Harrison and Brewer received immediate positive feedback from a wide range of stakeholders; however, extremely hard work was necessary to get the culture in the school working once again. They had learned that not making a decision was making a decision to accept the status quo, so they now made the tough decisions much quicker, and they and their principals held tough conversations with staff regularly. EVIDENCE OF SUCCESS AND THE WAY FORWARD SPARK had been featured in numerous media outlets, including The Economist and Forbes Magazine. After intense lobbying, SPARK had found a series of investors, beginning with a few high-net-worth individuals. In 2014, Pearson Education, a worldwide player in the global education sector, invested an initial R28 million9 into SPARK via their affordable learning fund. According to a recent article, Riaan Jonck, the Pearson CEO in South Africa described the preliminary academic results for SPARK’s first class as “‘overwhelmingly positive,’ with 91 per cent achieving 18 months’ worth of reading [development] last year and more than half of the learners concluding the year above international grade level standards in mathematics.”10 These achievements were all the more remarkable because, for nearly all learners, their home language was not English. Jonck added that SPARK’s blended model allowed for the delivery of high-quality education at a price point significantly lower than most South African private schools. Brewer was invited to speak at the 2013 Skoll Social Entrepreneurs World Forum in Oxford, and, in 2013, SPARK Schools was a finalist in the Accenture Innovation Index award for an innovation that changes the way the world works. In May 2015, Harrison and Brewer were busy concluding a deal with a new investor for R150 million. The first four years had been very tough — often overwhelming. Harrison and Brewer had invested huge amounts of sweat equity and planned to open four more schools the following year. Harrison believed that the biggest problem was in the supply of quality teachers in the operating environment, saying, “The quality is lower than we realize, even from our top universities.” He had devised a simple test as part of the selection process. He asked the applicants to divide 240 by 4, offering them the opportunity to use pen and paper. Of all applicants, 80 per cent couldn’t do the calculation. “We have to constantly test our assumptions,” declared Brewer. Harrison and Brewer wondered what improvements they needed to make to attract, motivate and retain talented teachers who would engage deeply in their vision of positively influencing education in the country. Was their model scalable?

9 In May 2015, the exchange rate between South African rand and U.S. dollar was US$1 = R12. 10 M. Hasenfuss, “UK’s Pearson Targets SA’s Education Sector,” Business Day, May 22, 2014, www.bdlive.co.za/national/education/2014/05/22/uks-pearson-targets-sas-education-sector, accessed October 26, 2015.

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