Category Archives: McKinsey & Co./Itasca Project

McKinsey & Co. in Minneapolis: Trojan Horses, Tobacco Money & Big Banks

February 5, 2016

Third in a series: As the Minneapolis school board embarks on a refreshed superintendent search, I am taking a look at how the Minneapolis schools fell under the distracting and destablizing influence of the market-based education reform movement, also known as GERM. Access part one (McKinsey & Co. Mind Meld) here, and part two (McKinsey & Co. in Minneapolis) here.

Part Three

Sick days and snowy days (so beautiful) have slowed my McKinsey series down, but I’m back. Here is a brief recap of where I left things off last week: 

Trojan horse

In 2007, in Minneapolis, McKinsey & Co. consultants–acting in tandem with the local Itasca Project–wrote up a new, nine-point plan for the city’s school district, promising that, though ambitious, their plan was “doable,” and would make every Minneapolis student “college ready” by 2012. The Itasca Project thenloanedMcKinsey consultant Jill Stever-Zeitlin to the Minneapolis Public Schools, who came on in the newly created position of “Chief of Accountability and Strategic Partnerships.” (See more on McKinsey/Itasca “loaning” here.)

Why was a private, for-profit management consulting company providing strategic direction–and privately funded staff–for a public school district? This may be the point at which good intentions (let’s help all kids get to college) crossed paths with a growing national and global market-based education reform movement. This movement aims to get government out of education by replacing public school systems–deemed to be failing and in crisis–with “portfolio” districts, built around “choice” and competition.

This movement also aims to put public education dollars into private, deregulated hands, and, it assumes that people like McKinsey consultants, who are trained in data and performance management, have the answers. (The ultimate goal? To make sure the world’s education institutions serve the needs of global corporations. Watch this McKinsey video for a lesson in this, especially the part where students are described as the “winners” because their “curriculum is being molded by…industry itself.”)

And, McKinsey did its evaluation of the Minneapolis schools for free. In fact, in the 2000’s, McKinsey & Co. consultants got used to doing work, at no cost, for (or to?) the citizens of Minneapolis.  When former mayor RT Rybak took office in 2002, he brought McKinsey in with him.  A 2004 City Pages article put it this way:

During his first months in office, Rybak embraced a report by McKinsey & Company, the consulting group that wrote the business blueprint for Enron. The five-part report mostly focuses on streamlining the city’s planning and development departments, but it also pays particular attention to how the city is viewed through a business/consumerist lens. Corporate jargon like “strong customer service skills,” “responsibility and accountability,” and “strategic goals” are littered throughout.

Perhaps because it was done pro bono, the report seems to have caused few ripples, except for concerns attributed to then-City Council member Natalie Johnson Lee, who worried that the “report does not directly address communities of color, and fails to tackle poverty head-on.” (It is also not clear what, if any, long-term benefits the McKinsey rejiggering accomplished.)

One can also get a peek behind the McKinsey curtain from 2004, when Rybak and his communications director, Gail Plewacki (who is now the communications director for the Minneapolis schools), tried to require the city’s police officers to go through the mayor’s office before speaking to the press. City Pages reporter G. R. Anderson, Jr., described the situation this way: 

Rybak’s press secretary Laura Sether (told) me the policy was simply about the “coordinating of communications.” It wasn’t hard to see the McKinsey effect–a pretense to transparency that was really about information management.

Pro bono work such as this is part of McKinsey’s charitable arm, as it is for many large corporations. But it is also a tried-and-true business strategy: “Philanthropic initiatives … can pave the way for future market-based innovations,” wrote McKinsey executive Doug Conant in a 2013 report. “It’s a great way to learn about communities and their needs, and test new business strategies.”

In Minneapolis, in 2007, McKinsey/Itasca’s pro bono strategic plan for the city’s schools definitely paved the way for “market-based innovations,” in the form of a coordinated, business-led mission to shake up and remake the public school system.

And much of this mission was funded, inadvertently, by Big Tobacco

For years, Jill Stever-Zeitlin’s salary in MPS was paid for by the Itasca Project through a grant from the local Robins, Kaplan, Miller and Ciresi Foundation for Children (the RKMC Foundation).  The RKMC Foundation was started, according to RKMC’s website, in 1998, with a “$30 million commitment from the Robins, Kaplan, Miller & Ciresi LLP law firm. The gift was a result of fees earned from the $6.6 billion settlement in the Minnesota tobacco lawsuit.”

This windfall allowed RKMC to support some beloved local organizations, such as the Children’s Theater, with an initial aim to “support PreK-12 education, public health, and social justice.” But, RKMC’s website tells us, in 2007 the foundation shifted. Just as McKinsey consultants were plunging in to the strategic redesign of the Minneapolis schools, “…the Foundation chose to focus its assets to achieve greater impact on improving children’s lives.”

Here’s what those assets have supported in Minnesota:

  • The Minneapolis Foundation: Through corporate philanthropy and support from the RKMC fund, the Minneapolis Foundation has provided financial support and thought leadership for the pro-business education reform movement in Minnesota. (The Minneapolis Foundation, in turn, provides financial support for the Itasca Project, which received flak in 2010 for wanting to pay its first “CEO” close to $400,000.)
  • The Minneapolis Foundation’s outgoing president, Sandra Vargas, is board chair of the national, hedge fund-heavy education reform network, 50CAN, which the Minneapolis Foundation also helps fund. Vargas became president of the Minneapolis Foundation in 2007, suggesting this was indeed a pivotal year for the local reform movement,
  • Teach for America (TFA). This education reform powerhouse was brought to the Twin Cities with help from the RKMC Foundation, giving TFA a foothold for expansion in Minnesota. While TFA recruits do not have a large classroom presence in Minneapolis, TFA alums have been put into high-profile, highly paid administrative jobs within the district–often after just two years of teaching experience, leading to an emphasis on management systems, data collection and standardization (hallmarks of the McKinsey approach to public education). One example: Minneapolis’s “Office of New Schools,” run by TFA alum Betsy Ohrn, and built to promote the portfolio-like splintering of the Minneapolis schools.
  • TFA also has a “deep bench,” far beyond the classroom, nationally and locally. Beginning in 2012, with TFA alum Josh Reimnitz’s  Minneapolis school board campaign, outside education reform money has poured into local elections. 
  • Educators for Excellence (E4E) is a TFA offshoot, also brought to the Twin Cities by RKMC funds. E4E is positively framed as a place for “teacher’s voices,” but also requires teachers to sign a pledge in order to join. The pledge includes an agreement to be evaluated according to student test scores, which sounds like a great “accountability” tactic, but is deeply flawed and, some would say, profoundly unethical (see this report connecting high stakes testing to the school to prison pipeline). E4E also helps promote corporate structures for public education, such as pay for performance–a controversial practice abandoned, ironically, by Microsoft (E4E is partially funded by the Bill and Melinda Gates Foundation). E4E has a New York PR firm, SDK Knickerbocker, on retainer to help sell its “teacher-led” message.
  • MinnCAN. The RKMC Foundation provided seed money for MinnCAN, a franchise of the national 50CAN education reform network, to grow here. MinnCAN is run by former TFA-Twin Cities Executive Director Dan Sellers, who also managed, or mismanaged, some might say, the 2014 influx of outside dough into the Minneapolis school board race. (Want to get a handle on MinnCAN’s priorities/lobbying efforts? Follow the money.)
  • MinnCAN has shared office space in Minneapolis with the local pro-charter school expansion group, Charter School Partners. The RKMC Foundation has provided financial support for Charter School Partners, which has since morphed into MN Comebackan incredibly well-funded group with designs on a complete takeover of the Minneapolis Public Schools, through the expansion of “high performing” charter and district schools.
  • MN Comeback has also received money from the RKMC Foundation and the Minneapolis Foundation. Additionally, MN Comeback is part of a national education reform support and expansion group called Education Cities (again, follow the money). Amy Hertel is a former McKinsey consultant and Minneapolis Foundation education policy director. She now works for Education Cities, as the Vice President for “Network Impact.”

Think of this as a coordinated, McKinsey/Itasca-RKMC-Minneapolis Foundation-national education reform network marketing campaign, with two dominant talking points: 

  1. The Problem: The Minneapolis Public Schools, like “urban” public education everywhere, is failing. It is expensive, bloated and messy, and it is failing students of color, thanks to entrenched “adult” interests, such as teachers unions.
  2. The Solution: Competition, data, school choice, the expansion of charter schools, the use of “transformational,” non-unionized teachers, mayoral appointed school boards, metrics, performance management, greater “autonomy” in exchange for greater “accountability,” and the systematic redirection of resources from the public into private hands, through “scholarships” (vouchers), for example.

The very real, very consciously-created and unaddressed racial and economic “gaps” that exist in Minnesota and throughout the United States are always used as the (public) justification for this work. 

But here is how a Minneapolis Public Schools employee–who has asked not to be named–remembers McKinsey’s work in the district:

They held focus groups for MPS staff around 2007 — you participated and got a $10 gift card to McDonald’s or something. At the small group I was part of (about 3 or 4 white staff), they asked us what we thought were the main issues facing MPS. I said I thought racism in the form of segregated schools and predominantly white teaching staff. Jill (forget her last name — was running the focus group [and don’t forget McKinsey was doing this for free for MPS]) said, “What do you mean?” I elaborated about white schools, schools of color, low-income schools, privileged schools in SW Mpls; how we had a huge majority of white licensed staff and an ever-growing percentage of students of color, but MPS was not providing any professional development to increase educators’ understanding of our own racism and how it impacts how we view our students & their families.

After that, McKinsey published a big report about their “findings” and it didn’t say a thing about race. They had to publish an addendum to make up for their racist blind spot. 

Retired Wells Fargo CEO Jim Campbell was chair of the Itasca Project from 2003-2008. In a McKinsey & Co. video about the Itasca Project, called “Doing Well by Doing Good,” Campbell describes Itasca this way:

“Our whole focus is on picking issues and working on them and producing results.”

Notably, while Itasca, through McKinsey, was leading a “strategic redirection”–minus democratic input or oversight–of the Minneapolis schools, this happened, thanks to the north Minneapolis group known as NOC (Neighborhoods Organizing for Change):

In October 2011, prompted by outrage over damage to education funding caused by the foreclosure crisis and the lobbying influence the banks are exerting over our democracy and public revenues, NOC presented the school board with a report demonstrating the $28 million negative impact of Wells Fargo’s foreclosure practices on the district’s budget. Community members rallied and testified at the board asking them to move their $25 million monthly payroll account.  NOC followed up in December by presenting the school board with more than 12,000 petition signatures demanding they move their money.

NOC’s organizing pressure was followed, in 2012, by a SEIU (Service Employees International Union) report, titled I.O.U.: How Wells Fargo and U.S. Bank Have Shortchanged Minnesota Schools.” The report’s purpose? To square “some of the blame for a $2.4 billion school shift and other shortfalls in school funding on the practices of the state’s largest banks and their executives.” 

This begs the question: Who is failing whom? And who is controlling the narrative?

More to come! McKinsey, the media, and the education ecosystem

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