Jim Collins says that an organization needs to answer three important questions to find out their "Hedgehog Concept." Here's what we came up with for the third question:
What drives the economic engine of the company?
We found this question pretty difficult to answer because Christian education is a not-for-profit venture. In my experience I've found that education is not a money making business. I think you might even make the argument that it's a money losing busness. We found help, though, from a formula Collins recommends in his book: "If you could pick one and only one ratio--cash flow per x--to systematically increase over time, what x would have the greatest and most sustainable impact on your economic engine?" He pushes organization to find that one denominator that gives insight into the economic engjine of the organization.
Well, when we originally considered this question, the obvious thought to both of us was cash-flow per student (i.e. student tuition). However, when discussing this further with another teacher, I realized that tuition typically does not nearly cover 100% of a school budget. Philanthropy is necessary to sustain most schools otherwise tuition would be too high (again, education is not a money-making business). So, now I'm unsure if we can really have one denominator of if we can still find one denominator.
For now, I haven't come up with any conclusions.
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