Read the full transcript of Episode 88 of the NAIS New View EDU podcast, which features Chad Tew, “chief disruption navigator” for LearnCollab. He joins host Morva McDonald to talk about the market and landscape for independent schools, why he thinks of merging as more of a unification process, and how different levels of collaboration can shore up school communities in disruptive times.
Morva McDonald: Welcome back to New View EDU. At NAIS, we know that depending on your specific location and market, your school might be facing challenging enrollment trends and as a result challenging financial trends. And as a prior head of school, I’m pretty sure that even if this isn’t currently the case, it’s never too far from your thinking.
Today’s guest, Chad Tew is the founder and chief disruption navigator at LearnCollab. At LearnCollab, he had helped independent schools over the past decade navigate sustainability strategy, including rightsizing and mergers. He’s been a school founder, CFO, trustee, and teacher.
It was about a year ago that Mark Mitchell, the NAIS VP of access and affordability, introduced me to Chad as I was interested in learning more about ways to support heads of school and schools to engage in thoughtful processes around financial strategies, in particular school mergers.
Chad, welcome to New View EDU.
Hi, Chad, welcome to New View EDU. I've heard you refer to yourself sometimes as a chief disruption navigator. Tell me about the story behind that.
Chad Tew: It's actually the story kind of how I got into independent education in the first place. I grew up going to public schools, and at a certain point I was working at UCLA as an administrator and a teacher. My kids were in kindergarten at a small little independent school in Studio City, California, where I live.
And there was a, kind of like a governance disruption caused by a change in the kind of management of the church. And it threw the school's future into question. And so I found myself, I had just joined the advisory board as the treasurer of this little school. And all of a sudden I found myself as a volunteer trustee, trying to start a successor school, a new school.
So I came to this whole world through disruption. There's a fantastic school called the Wesley School that's about 25 years old, which was born out of that disruption, that's thriving in North Hollywood. So I enjoyed that experience, actually, so much that I went and found an opportunity to be a CFO at an independent school, a large K-12 school called Viewpoint in California. And Viewpoint, at that moment, was just completing a merger, or an acquisition actually, of the neighboring school, Meadow Oaks. So a lot of my early experience joining Viewpoint was helping to kind of like, solidify and…that merger of cultures. And so that was my experience.
So for people who have always been at a very established, staid, balanced school, that was not my experience. So I think that disruption was normal. At Viewpoint, I was there for 13 years, and for 10 of those years, I taught economics. So I was very interested in market theory. So disruption in markets was always key. So that's another thing that I kind of bring to the focus.
Morva McDonald: I appreciate that story, because I think for a lot of heads of school, because of the complexity of the job, there's always something where you're just like, I really don't know that or I'm not familiar with that. And then you have the opportunity to learn about how to go about it, how to figure it out for your school. So I appreciate that that's your own history, and kind of entering into the space. Like, how do I help a school figure this problem out related to its financial strategy?
I think in 2026, and you'll have your own perspective here, we're seeing a little bit of stabilization maybe in the market, although that changes depending on what week you're in right now, maybe. But there's a lot of financial pressure that's really pushing on schools. It's including everything from what people are talking about as the demographic cliff, kind of these enrollment challenges across the country. Talk to us about why, in your opinion, the business as usual model of independent schools isn't really sufficient any longer.
Chad Tew: Well, I think that, beyond demographics, I mean, the demographic thing is a big issue. I wrote an article in the NBOA magazine in 2013 called “Reverse Musical Chairs,” about there being kind of like too many chairs for the number of players. And with the phrase that “they can't come to school if they weren't born.” So I think that that's not to be minimized. So what's now being called the demographic cliff has been looming for a long time.
And that in addition to that, though, we have, you know, one of the things that I think is really interesting is this concept of homeostasis. I'm reading Michael Pollan's new book about consciousness, and he's talking about homeostasis as one of the key elements. It's all about trying to regulate and maintain stability. And I think that that's where schools have been focused.
And so one thing that is a challenge for schools, I think, is their governance model, and boards that are focused on kind of like, stability. And we're here to just kind of hold the mission for the future, which is true. And at the same time, sometimes that means that you're so focused on stability that you don't see the flip side of homeostasis, which is kind of apostasis. It's that idea that kind of like programmed, regulated cell death is what the real definition is, where any multicellular organism eliminates either damaged or unwanted or aged cells so that you can maintain a healthy balance. That's a challenge for independent schools.
I've seen it as a CFO for so long, that we're always wanting to add programs, but very often not drop them. We want to add Chinese, but don't want to drop Latin, even though you only have six students a section. Or a sport, or whatever, you're always adding. And the same thing happens with, I think boards are always looking at like, how do we just focus on that stability and homeostasis, as opposed to dynamically changing?
And I mean, I think other things that are affecting schools are changing tastes and what parents are looking for. I’ve done a lot of work with schools about marketing, and that too often the thing that was highly sought after in their program is not as popular in the marketplace, and that they haven't, they're focused on consistency of mission and haven't really kind of kept up with the changing taste in the marketplace.
That certainly the culture wars are huge, that suddenly half of your population of your school doesn't want to be with the other half. And so that's a challenge when it comes to maintaining enrollment and harmony, at least in the parent body. Kids seem to be much better at that. And then competition. It's easy, not necessarily easy, but there's always a group that want to start a new school, or to expand their school. So there's always some new competition that's coming into the marketplace. Or maybe a school that used to be a feeder is adding some additional grades, and so now they're becoming a competitor. And it's certainly, the charter school movement, people sometimes don't fully appreciate how competition comes from non-independent schools.
Morva McDonald: Right. Are there other places in the market? Yeah. I appreciate that. It's really helpful to think about the varied factors, right? The enrollment challenge, the cultural conflict, right? Depending on where you are, but certainly in various locations that that's impacting it. This issue about competition. I live in Seattle. It's a very competitive market, right? In that way. And then, and also continuing just to think about, how do you innovate, right? How do you actually engage in change work, versus, I think what you're saying is, just let it happen to you, right? And not be kind of intentional about that from the governance perspective.
Talk to me a little bit from your view, like when you think about the traditional school finance model, talk to me about what you think that is. And if you were to imagine a different model at this point in time, what would you imagine? What would you put in place?
Chad Tew: I think that the school financial model actually works pretty well. The one thing that I think I would change, and tried to change when I was at Viewpoint, is to not be silo. It's too often the financial staff and people and the CFO of the school don't really fully participate in the life of the school, you know, and the CFO shows up at the senior staff meetings and represents the business office perspective.
But that, my experience when I was at Viewpoint, for 10 years, I said, I had a foot in the classroom. So I could go to faculty meetings and say, know, like, I understand how distracting it can be when the wastebasket hasn't been emptied. And so we're really going to try and pick it up on the custodial issue. Or that especially, I think, connecting with the admission office and the enrollment function. That for too long, that was seen as kind of like just a gatekeeper. And that the finance office, along with the finance committee, would tell admissions, like, this is how many students you need to bring in. Without any kind of understanding about what the market was saying. And I think that it's real important for the CFO and the Director of Enrollment Management to build a collegial working relationship, and for them both to work to support the work of the Finance Committee, so that it's more integrated and that financial decisions are being made with better understanding of marketplace dynamics and changes.
Morva McDonald: Yeah, for me, that's, I would hear that as like, what's the coherent approach in my building or across my leadership team that I can put in place so that we can see the challenge, the different kinds of challenges in each division or whatnot, I think pushing against the inclination to silo, right, in an organization, is super important and valuable.
I want to talk to you a little bit about mergers. There's a lot, there's an increasing amount of talk, I think, in the independent school set, right? And this is related to the competition and the market, a variety of things. So I want to talk to you about mergers. So how, in your opinion, like, how do you think about, how does a school come to recognize that it's in a saturated market, and what its place is in that saturated market?
Chad Tew: Yeah, but it comes back though to the core focus of schools is often why we're so special. What is it about our mission and our history and our approach to education that makes us uniquely worth investment of the parents' resources above and differently than the school down the road?
So, too often there's this internal focus on how do we continue to be special, and not enough focus on the outside marketplace. And so I think that now one of the things that really helps a school is detailed market research. And that's again, oftentimes maybe at least a sophisticated data-driven enrollment director is going to be bringing that to the table.
But nowadays it's so easy to be able to access that information. I mean, whether it's MarketView, NAIS tools, and AI can do a great job in just helping to build more information about markets. That's where the go-to place to learn about demographics and trends in your area. There's also fantastic consultants that work in that area that you can bring in to do limited market studies that really involve interacting with your population, both the people who have chosen your school and the people who said no to your offers of admission.
But when I was, you know, back in my MBA school, one of the key people that we studied was Michael Porter. And he's the one who had, competitive market positioning was his, his big deal out of Harvard business school. And so I think it's really understanding what is your position in the marketplace? Too often, everybody wants to be just special and unique. You really need to understand the marketplace as a whole, and honestly call out who's the market leader, who is the artsy school, who's the athletic school. And see it like parents see it, and prospective parents, not how you want to see it.
Because I've been in too many strategic planning processes where it's very internally focused and people kind of like, they all want to be the same thing. And you end up reading people's, schools’ mission statements and they sound so similar because the aspirations are similar and wide ranging. But that doesn't help market positioning, that confuses things for a parent in the marketplace. And so I think that understanding and embracing your market position as it's seen by the outside world is really important.
Morva McDonald: It's familiar, I think, right? For heads of school to think about how do I differentiate my institution, my organization, right, from the others in my market? What does make it special, right, in this space? I think the next question is, what place does it serve in the market, right? What function is it serving in the market, which is a little bit different maybe than just how do I differentiate myself? Can you talk a little bit about that?
Chad Tew: Yeah. Well, and having that appreciation and the desire to differentiate helps focus the effort to make small changes, to say like, how can we lean in to what makes us different, as opposed to try to be more things to more people? And I think that's a big challenge for a head.
Because the head can often see the strategy more clearly, especially on differentiation compared to, sometimes this group of board where you have 12 or 20 people sitting around the table. And each of them says like, we should be more like that school and that school. And so I think it's a challenge for a head, but I think that leaning into what makes you different is very important.
Morva McDonald: Having been a head of school, I'm somewhat familiar with what you refer to as kind of the proactive versus the reactive trap. And often the hardest conversations in schools, as you point out, are ones that come too late, right? They happen too late. In your experience, kind of talk to us about the early warning signs a board should look for before they actually need to consider a new financial model.
Chad Tew: I guess I push back against the whole idea of early warning signs in a way because I feel like the strongest schools are on a track of continuous improvement. So they're continuously looking at things. So it's not so much a warning sign, it's just the latest data. But that data is listening to the marketplace as we're talking about.
I think another, if there's a warning sign, discount rate is a big one. When I was at Viewpoint, we were able to get an investment grade bond rating on our bonds to expand the campus. And I worked with Standard & Poor's, and I remember that they had an interesting quantitative analysis model where they looked at the discount rate and said, as long as it's below 30%, it should be kind of a healthy school. If it creeps up above 30 to 40, or 38 or whatever, that's maybe some concern. And a discount rate above 40 is really dangerous for the school's long-term survival.
And too often, you know, trustees or, you know, an administration to an extent is focused on just the number for enrollment. And you figure out, wow, well, if we can, you know, better meet that number by giving away more financial aid and improving access or affordability actually, by giving more people discounts, then that's what we should do. It's the whole thing of net tuition revenue management. And it works initially, until it doesn't, until you have such a large population that's not paying full price. And then that turns into what's happened in the college market, where there's universities where, many universities, I think, the majority where the average student, more than half the students are paying less than the market price.
And in expensive liberal arts schools, it can be like 90%. And so you lose kind of like pricing reality. So I think that net tuition revenue management is important and also discount rate, focusing on that more than on just the enrollment number.
Morva McDonald: Are there other like, I think that's really interesting, having been in a school that really struggled with kind of its financial stability and health over time. Are there other things like, imagine you were talking to a new head of school or even a veteran head of school, but whose kind of school has been through a major change. Are there other kinds of signals that you would advise them to pay attention to, right, as they're thinking about the health of their financial model and changes that they might make?
So there's enrollment in general, but to something that you're talking, that's a little bit more nuanced, right? Which is this question about the discount rate, the pricing reality is interesting. Are there other things that are similar to that that you would advise people to consider?
Chad Tew: Well, I mean, as important as admission and yield are, almost as important or more important is attrition and retention. And so I would really be focused on, you know, what is your, you know, attrition rate, and how well do you do on retention? And, you know, does your school have a retention committee where people get together and really kind of focus on how do we retain students and make sure we're serving each student?
And that can sometimes also help highlight program issues. I work with a K-6 school in the East, and they were losing too many kids who would leave after fourth grade or fifth grade because they wanted to jump to the next available school. And that's where there was an opportunity to do it, rather than stay at the first school until sixth grade. So how do you try to battle against that? Maybe it's working out articulation agreements with that school that you're feeding into. So, if they're open to that.
And that's one step sometimes where people start exploring the potential, whether it's just an informal kind of articulation or partnership, between two schools, or it's a formal merger where you end up with a K6 or a K8 school that's merging with an upper school. It can make both schools stronger.
Morva McDonald: You alluded to this process around there's kind of these different partnerships that schools can make. And there's also kind of the process of heading towards a merger or thinking about a merger. In your view, kind of talk to me about why a school in your mind should start to even contemplate the possibility of a merger.
Chad Tew: I have kind of a contrarian point of view, possibly, is… I think every school should be thinking about a merger or some kind of collaboration. And sometimes some of the most exciting school collaborations come out of a strong school looking at opportunities where they can expand, by kind of helping out or absorbing or merging with another school.
The word merger is something that can be scary to people. I like unification better, unifying two schools, unifying two faculties, two student bodies, two cultures, and how do you unify? So you think about it as like, you know, when two families come together, you know, as a result of a marriage, kind of. You want to try and set it up for success by thinking about unification instead of an up-down thing.
Morva McDonald: Merging your family.
Chad Tew: Yeah, yeah. But too often, I think in reality, it's often an acquisition that one of the two schools is in a stronger position, either market position or financial position. One school might have great facilities, but they're having a hard time making the bill, paying the bills. Their financial runway is kind of like ending soon, and they can see that in sight. They've got 18 months or 24 months or whatever, but they can project that they'll be able to stay in the black.
Whereas another school can come in, and I have seen some of the most successful stories that—Harvard Westlake is, there was the Harvard School for Boys in Los Angeles and the Westlake School for Girls and that after many years of being a fantastic sought after school, the Westlake School was in financial distress in some ways. And Harvard was a stronger school, but had also strong management that could recognize this was an opportunity. And so the two schools came together in a merger.
And that, it was a fantastic thing for both communities. That it's now like, you know, one of the flagship schools on the West Coast. And I think if you look at some other schools across the country, the strongest schools in the market, and you look at their history, you'll find that there was a merger in the background somewhere, where more than one school joined forces. So I think that being open to that at all stages, and if I'm a head or a board chair at a successful, strong school, I might be looking around and saying, like, how could I maybe serve a broader geographic territory by adding another school? Or if I'm a high school, how could I become K-12 by bringing in a K-8 school?
Morva McDonald: I think that's fascinating because my guess is, at least in the conversations I've had, people start to think about mergers from the position of like, the school is headed towards closure, right? And how can I find a school to attach to that will keep me afloat? So it's interesting to think about, to turn that around and think, well, I'm a school that's really financially quite capable or strong or have a strong market position. Where can I look to expand that? And maybe that's where the unification, I also really appreciate unification over merger. I think that it signals something different about what's going on.
You've done some of this work. So I'm curious, both in your own experience and you've supported schools, like, just how do you help two schools that have arguably different cultures? We spent so much time in schools saying we're different, to your point, right? And differentiating ourselves. How do you really bring two schools together? How do you blend those cultures? What's your thinking about that?
Chad Tew: That's one of the things that heads are really strong with, is articulating mission and values. And I think that that's where it starts. I mean, if two schools can look quite different on the outside, but if they have the same strong agreement, at least on core values, they can be very successful together.
I worked with a couple of schools in Pennsylvania, Moravian Academy and Swain School. Swain was a very progressive school, K-8 or pre-K-8. And many of their students would go on to Moravian's high school. But Moravian was K-12, much more traditional curriculum, especially in the lower grades. And that, you'd look at those two schools and say, there's a clear choice for families in the Lehigh Valley of Pennsylvania to say, do I want to go to the progressive school or the more traditional school?
But now they're merged. They are together, but they still kept those different identities. So those options still exist for the people in Bethlehem or Allentown. So you can have different market positions and still maintain connection, still take advantage of having the same back office, same fundraising and admission backbone. There's a lot of synergy that happens.
It used to be a better example before department stores started having so many challenges because of Amazon and whatnot, that Macy's and Bloomingdale's are owned by the same company, Federated Department Stores. They're very different types of companies. They have different marketplaces. But that Federated has a lot of strength and advantage by being able to source manufacturers and suppliers and have shared warehouses and backbone business systems and whatnot. So I think that focusing on where is there possible synergy is, you know, a helpful thing for two schools. They don't have to look the same.
Morva McDonald: Yeah, I think that's helpful. It's helpful to think about…almost the question of if two schools are unifying, which I appreciate your language there, what is being unified? It doesn't have to be an entire acquisition of another school, right? It can be a question of what's being unified. Is it the organizational systems? Is it a culture? Is it a way of thinking about learning? I think that's an interesting distinction. Sometimes people think comprehensively. It means all of it, right? But I think what you’re telling us if I'm correct, tell me if I'm wrong, is that it doesn't actually have to be that. It can be differentiated in a variety of ways.
Chad Tew: And it doesn't even have to be. I mean, there can be great synergies if you come together with one board and one corporation and you can share. You have access to better rates on health care and insurance. There are so many different positives by being a single larger organization than being two small organizations. But there's also many steps before.
I have like a gated approach kind of to collaboration, where you kind of start off with maybe, you know, the head of two different schools, you know, are on each other's boards. I mean, a lot of times maybe that's already happening. So if you're a head and you're serving as the outside educator on someone else's board, start thinking about, you know, mergers. Like, is it, or how can we collaborate?
There's so many other ways to collaborate too, like shared facility use, that… faculty doing faculty development together. I worked with some schools in Wilmington, Delaware, where they got together and it was amazing synergy. I attended one of their faculty development programs and it was great, because one was a K-8 and the other was a high school and they were, know, the K-8 was a big feeder for the high school. And the teachers loved that opportunity to kind of like have a K-12 vision, you know, without even having a formal, you know, unification.
Transportation can be a way to share. I think it's interesting that the Hill Schools in New York, you've got Fieldston and Horace Mann, Riverside, they're competitors in a way, but they share at least the best of my, they used to share busing, so that people coming up from Manhattan, the midtown, were able to all get on the same bus and it made it much more cost effective to have a shared bus route for the three schools together.
Morva McDonald: Yeah, that's interesting. I recently did a board of trustees workshop training. I'm not sure you would call it training, but event, with the boards of two different schools, right? In part for this reason, just to have more ideas in the space, right? Have some cross collaboration. And so I think it's great advice to think openly about the different places that collaboration might be effective and useful.
Chad Tew: You build those connections and an appreciation for each other. And that's where it maybe becomes fertile ground for a more wholesome unification.
Morva McDonald: It seeds something, right? The experience itself begins to seed another idea. Having been a former CFO yourself, I have no doubt that you think of like the business office as kind of the engine of a merger of collaboration. What's the one thing a CFO must get right during the diligence process that they're really contemplating our merger or unification for their school?
Chad Tew: I mean, I think that a key thing to keep your eye on from the business office perspective is... I mean, in a due diligence process, because the business officer is often going to be the person who's at least organizing a due diligence process. And in some ways, it's not that much different than going through the accreditation process every six years or whatever, because you're looking at things in a complex, wholesome way.
But I think that a key thing for a business office person, especially if they came up through as a CPA or an accountant person, that they're going to be looking too often at like, all of the different details and rules as opposed to potential synergies. So I think it's one thing I would tell my brother CFOs, is try to open up and your inclination to say, no, this is not going to work. They're using a different system. I can't see how our computer systems are going to work together. Or they're using a different this or that, and focusing on the differences. And instead, looking at how would this work? And also not thinking, seeing which things are long-term deal killers, versus things that you can get around over time.
That maybe you do have to run two different systems for a few years. Almost every merger or unification is a multi-year process. It doesn't happen overnight. And that if it's done right, you're inviting everybody into the process, all the stakeholders. First of all, you make the agreements, the two boards. But then it goes public. And you're inviting everybody into the conversation, all the stakeholders to help look at and develop new systems, new traditions, while keeping the old ones that are significant on both sides. And that works from a business office point of view just as much as it does on the parent association or the alumni board.
Morva McDonald: What would be your advice for a head of school as they're starting to engage in a process like that? What's top of mind? Maybe it's the same. Maybe it's like really being open to what's possible. But are there other things you might advise a head of school to be thinking about?
Chad Tew: Well, I think that what's natural for a head, but to remember in a new way, is being mission driven. It's not about the details as much as it is about the, what is your mission beyond just the name on the door and the bricks and mortar? Because what you may be, if you focus on what you're giving up, like, we may have to close one campus, or we may have to give up this or that. Maybe even the head's going to have to give up their job. A school doesn't need two heads. So this can be a huge impediment, isn't it? You don't need two CFOs, you don't need two heads.
But I've worked in schools where it, sometimes that was embraced. One head, a pair of schools in Colorado where one head was looking at retirement. And this was the perfect opportunity where they could kind of like be the shepherd of the merger while the other head stepped up to become the head of school of the unified school. Or sometimes there's a transition, where a brand new head is kind of coming in and it's clear from the board perspective that you may end up after a year or two becoming the division head.
I worked with a couple of schools in Texas where, you know, a brand new head that had just kind of ascended into that role would embrace becoming the principal or the head, the division head of the high school. This was a very dynamic, you know, robust school. And the much more seasoned head of the K-8 school would become now the head of the overall school. So in that case too, between the two business officers, one was the CPA accountant type of a business officer, and one was kind of a nuts and bolts operations type person. And it was an opportunity for each of them to kind of like, peel off the parts of the business office job and do the part that they liked best.
So to think creatively about, you know, not about loss, about like, how is this going to undermine things, but how does it present opportunities? That's what I love about the New View, your whole mission for the New View podcast is about looking for opportunities in a time where others see it as just challenge. I think that that's what I'd say. Take the New View mission statement and bring it into your merger.
Morva McDonald: I think there's kind of no, Chad, I have to say there's kind of no better way than to end this podcast with that statement. Like, New View EDU is part of, I think, helping schools, like you're saying, like, think about what's possible. And I just, I think the reframing of thinking about a merger or collaboration has been something you just do in the worst moment and the hardest moment, but it's something you should be thinking about as you're continuing to think about how to sustain your school, whether your school is in a really good position right now, or whether it's struggling, that it's the openness to thinking about that kind of collaboration that might feed to the next thing, the next possibility, the next opportunity. It's counter to what you were saying in the beginning, homeostasis, right? It's counter to that.
Chad Tew: Yeah, no, it's how to dynamically move forward in a changing environment. Because homeostasis is all about how do you try to maintain equilibrium in a changing environment? If you walk outside and it's snowing, that homeostasis is the thing that's telling you, you should put on a coat. Because the environment's changed, how can you change to maintain stability?
Morva McDonald: It's been great to have this conversation. Thanks for just peeling back a little bit, the onion, so to speak, of how to think about some of the school models, school finance models, mergers in particular. Lots of people are talking about this now for all the reasons that you indicated, and so just having a conversation with you about that and learning a little bit more about the nuance of how we might think about that is really helpful and it's been great to speak with you as always and I appreciate your time. Thanks Chad.
Chad Tew: Thanks so much. It's been great to be here.