“Schools don't have a bottom line, but that doesn't mean you can't measure and hold accountable,” Austin Beutner says. Above, he attends the Alliance for Children's Rights 25th Anniversary Celebration in Beverly Hills, California.
“Schools don't have a bottom line, but that doesn't mean you can't measure and hold accountable,” Austin Beutner says. Above, he attends the Alliance for Children's Rights 25th Anniversary Celebration in Beverly Hills, California. - 
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The Los Angeles Unified School District is the second largest school district in the country, with over 640,000 students enrolled in institutions across Southern California. Philanthropist Austin Beutner, who also was a former investment banker, deputy mayor of Los Angeles and publisher at the Los Angeles Times, was recently appointed as the LAUSD superintendent. Marketplace Weekend host Lizzie O’Leary sat down with Buetner and asked why this job now? The following is an edited transcript of their conversation.

Austin Beutner: It's about the kids. My own roots, my mom was a teacher, my dad worked very, very hard to make sure that I had a great public education. It's that common place — it's the community place, the commonplace, the community connects. And if we can provide students that same opportunity I had with a great public education, what a gift, what an honor to be able to work towards that.

Lizzie O'Leary: Where do you start? You know, when I look at the numbers, LAUSD has $15.2 billion in pension liabilities, potentially a budget deficit of some $380 million by 2021 school year. Do you tackle finances first?

Beutner: Let's be careful when we look at a budget to remember it's not just a bunch of numbers on a page. It's a statement which reflects the values of the organization, reflects the values of the community. It serves the parents who entrust the lives of their children to get a great education in L.A. Unified. So part of what we have to do is take a step back before we can take a step forward, and in taking a step back, we need to look at the resources we have. We're going to have to talk to the community about how we find more resources. And part of the challenge is going to be to have to make sure that where we are investing resource today reflects the mission of the organization, which is to help every child achieve, and reflects the values of the community it serves.

O'Leary: That all sounds like, you know, a series of laudable goals, but I guess in terms of executing that, you are going to have to make some tough choices. Does that mean layoffs, salary reductions? How do you make those numbers work?

Beutner: School districts, great school leaders, great schools are what make great school districts, not the other way around. And if we work back from the student in their classroom — when you talk about things like cuts, if that means there are fewer teachers, it means classroom sizes are larger. It means students aren't getting the knowledge, the attention, the insight, the inspiration that they need. So we have to be careful when we start going down that path that we don't wind up with a self-fulfilling proposition where the outcome, the inspiration, the education of that child gets worse. So we have to approach it pretty cautiously.

O'Leary: Another big part of this puzzle, and, you know, something that's been going on in L.A. Unified for a while, is the question of enrollment. Some parents have chosen to send their kids to charter schools, and enrollment has fallen, I guess, by what, 30 percent since 2004? Where do you see enrollment as a priority for you?

Beutner: Let's re-frame slightly. In Los Angeles, about 500,000 students today, this morning woke up and went to a traditional public school. About 100,000 woke up and went to a charter public school. That's a little bit of a false choice. What we have to do is make sure the 500,000 students in the traditional public school are getting the best possible education and the 100,000 students in a charter public school are getting the best possible education. But to frame this whole thing as a conversation about charter/no charter I think misses the bigger point which is: We have to make sure every school is doing the best possible job for students in that school, hold all schools to the highest possible standard, and that's what's going to help the kids.

O'Leary: Clearly you have a different background than many of the people who have been in this job in L.A. before. But it is not uncommon in a big school system for someone with a business background to be tapped. There have been successes and failures in that respect. Certainly in New York, Cathie Black lasted some 90 days. And I guess I'm curious. Do you think the school system can be run like a business? 

Beutner: Joe Klein lasted a decade.

O'Leary: Yes, exactly.

Beutner: So I've been involved with leading large, complex, organizations — private and public — and you learn things. You learned that there are differences. You learn that the values of the organization, the purpose of the organization can be different. Schools don't have a bottom line, but that doesn't mean you can't measure and hold accountable. It doesn't mean you can't make sure your workforce is well trained and have the tools they need to succeed. It doesn't mean communicating with your customer base, if you will, which are the parents and the communities that we serve. Those are similarities across all enterprises, whether the serving the needs with public resources for the public good or a private organization. I also think it's important in any new organization is to make sure you listen and understand carefully. Word choice matters a lot. When I was involved in Russia many, many years ago, I got into a heated debate with an individual about why business, at that point in time, needed to make a profit. We are helping set up certain tools to support a market economy in Russia, and this elected official vehemently disagreed. I laughed. I talked to my interpreter afterwards and I asked him what he thought I was trying to say, and this young man, the interpreter, said, "Well, it's simple, so when you profit is when you take advantage of someone." Now I'd had a lemonade stand as a kid, and that's probably the first time I learned that revenues less cost is profit, but this gentleman that I was in this heated debate within Russia never had a lemonade stand, and in the Soviet system, profit was all about taking advantage of someone else. And I think one of the most important things when entering a complex enterprise organization like L.A. Unified is to make sure that we use word choice carefully, that I understand what's being conveyed, that we try to distill some of the jargon into plain English and that word choice I have — I use the word change, and it means to me, it connotes something very positive. To those who worked here today, that might be, it might be more risky, it might be change is difficult. It might be change could be viewed as somehow a criticism of what's being done, and it's not that at all. We just have to find a way to better serve the needs of kids, to close that opportunity gap that you and I spoke of earlier. And the best word I can think of is change. But I understand that some people may interpret that in not so positive fashion, but we have to get better at what we do. And I think that that transference between public and private, those who've been successful, understand at its roots start with communication — be willing to listen, make sure that what you're trying to do as a leader is well understood by the organization. That sounds simple talking about it with you, but it's not so simple to execute, and it takes a little bit of forethought.

O'Leary: Before I let you go, I'm just curious, you may not have thought about this yet, but when you think about the kind of impact you want to have on this school system and on the lives of these children and parents over whom you will have great influence, what do you want the takeaway to be?

Beutner: I made it better. I mean, it's a privilege and an honor, it truly is, to be part of the leadership team of an organization where so many people entrust the lives and the future of their child to that organization. That's a special place, you have to respect that, you have to honor it, and you have to understand that brings with it a lot of consequence in the decisions you'll be part of. But if I can look back in a period of years, not weeks and months, and said I helped create a better opportunity for that student to be inspired and achieve and take a great public education and do wonderful things in their life and be happy like I have been in my life, I'll consider that a grand success.

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Follow Lizzie O'Leary at @lizzieohreally