Leadership and Return on Investment

SCHOOL DISTRICT LEADERS face challenges when they attempt to document the relationship between costs and quality. Return on investment analysis is motivated by the strategic intentions of school boards and leadership to increase quality and optimize resource allocation.

No Child Left Behind, Race to the Top and state accountability laws have shaped a definition of school leadership that is student-outcomes focused. In turn, local school boards are insisting that district resources be directed toward what truly matters for students. They expect superintendents to document the degree to which expenditures positively affect student performance.

ROI analysis requires the organizations’ leaders to articulate and document the effect of an investment on student outcomes. Investments come in many forms. ROI discussions must move beyond investments, challenging district leaders to define the desired impact on learning connected to each investment.

Meaningful Questions

Documenting ROI starts with asking meaningful questions. The question “Are students benefitting from the reading support program?” is not the most meaningful one to ask. Better would be “Are students benefitting to the degree that justifies the cost?”

Specifically, how does one determine whether students benefitted more than they would have had the reading support program not been used, had students been served by a different program or had students just received the core instruction? Answering these questions is the focus of return on investment analysis. ROI reveals whether the expenditure of resources adds value for students.

School districts struggle to answer these questions because of the difficulty in establishing meaningful comparisons or control groups against which to benchmark results. Rigorously documenting ROI requires advanced analysis to generate a unique comparison, or control, for each student based on his/her individual past performance. ROI analysis then can examine a student’s actual achievement under the program against his/her projected achievement under the typical effect of the district. Such information can be linked to district resource allocations so informed decisions can be made about regarding programs and other investments and their effect on student achievement.