Saturday, February 26, 2005

The NCLB Business Model

Congratulations. You work for a company that makes widgets. Not mass produced identical widgets, but rare and unique one of a kind widgets. Each one tailored to your local community's needs and made from raw materials found in the community itself. You are on the front lines of the widget factory, having a hand in the creation of thousands of widgets over your career. Your company produces nearly all the widgets for your community. With the exception of a small percentage of you budget, the sales of widgets to the local community supports your business almost entirely. You business in turn supports the surrounding community, striving to meet its needs hiring managers and a board of directors from community members. Local control of your widget design has led to great success in the manufacture of widgets sold in your community, and you are justifiably proud to be a part of the widget industry.

But now those lawmakers in Washington, under political pressure, have passed strong new regulations intent on reforming the widget industry. It seems some people think widgets are being poorly manufactured everywhere, leading to a calamity of blind widgets. Since you are in the industry, you know some communities have widget factories that could use improving, but the one in your community is working fine. You are puzzled as to why lawmakers think you are doing such a bad job at supplying the widgets for your community. But regulations can't help but improve the quality of widgets everywhere, you reason, so you are open to listening to the government's proposal.

These new regulations are entitled No Calamity Leading Blindness, or NCLB.

Under NCLB it seems your method for measuring widget accuracy has been found to be inadequate. Rather than look to your whole manufacturing chain as you have in the past, you will now have to conduct very out of date quality control tests that focus on just a few portions of your manufacturing process to attain certain preset goals, known as Accuracy Yield Profile (AYP). Often these quality control tests do not actually measure what they are suppose to measure, nor to they accurately represent true field testing your widgets will face. What's more, these tests are now required at a frequency that is really too often to be meaningful. Finally, the costs of these additional tests will have to come out of your bottom line, so you will either have to lay off staff, raise the cost of widgets, or ask your local community to hold a bake sale so you can buy special equipment for your plant. You will be given no additional time in the manufacturing process to conduct these tests either, so you will either have to speed up production, or cut corners to meet them, or both.

On top of this, NCLB classifies widgets in more product lines than there really are. Although you've always seen most widgets as one product line that may be broken into a few sub-\groups due to special needs or abilities, NCLB now requires product testing for widgets that have 40 or more in their production line in your factory. So even though some widgets were never intended for the levels measured on the quality control tests or whose skills are specialized enough to have been exempt from product testing before, all of them must be tested for quality now using the same quality control measures.

What's worse is that now that you are quantifying the quality of your widgets, your AYP will be expected to increase until 100% of the widgets you produce pass 100% of their quality control tests in 2014. That's right: one-hundred percent. Even though you will be asked to do more testing with no additional funds and no additional time, and you have absolutely no control over the raw materials from the community you are asked to manufacture widgets out of, all your widgets must achieve 100% accuracy in just over nine years. NCLB provides no incentives, additional funding, or help what so ever in achieving this. What it does provide is punishment.

First you have to be a highly qualified widget manufacturer. You have to have a degree in widget manufacturing, be certified by your state as a widget manufacturer, and demonstrate mastery of widget manufacturing in area of the plant in which you work. Although you meet all these criteria, you wonder about the people who started in the mail room and worked there way into management. They are fine widget manufacturers, but don't meet these qualifications. You also wonder about the couple of specialty manufacturers, who came from a whole different industry, and now include those skill sets in the specialty widgets they make. They don't meet those qualifications either.

But the worse punishment is for the factory as a whole. If you don't meet your AYP goals for two years - in any one of the 40 plus categories of widgets the government says exists - your plant will be placed on a Watch List. Your plant must then complete and submit for approval an improvement plan. This plan details how you will meet your quality control goals set by the federal government. This could include hiring special trainers, extra helpers, outside consultants, or replacement staff. You will be given no extra time to do this. You will be given no extra funds to do this. Yet you must complete and follow this plan or else.

Should this plan not work and you only meet the ever increasing AYP goals for 39 of 40 sub-groups of your widgets, the real punishment starts. First your plant will be labeled a "Failing Facility". Your plant may lose what little federal funding it receives due to this label. People will move away from your community due to this label. Top executives from your company will be fired and replaced with those from outside the community. Whole departments of workers may be fired and replaced with new workers. You may lose your job even if your widgets meet their goals. Worst of all, production of widgets may be moved from your community plant, to that of another community regardless of the effects on your community. Plants that may meet their AYP goals will be flooded with new orders for new widgets from outside their communities.

And you wonder why such a plan as NCLB, obviously written by those who have not spent much time on the widget assembly line, would be passed into law. You wonder why 80% of the widget plants in your state are running a deficit. You wonder when, not if, your plant will be labeled a failing facility.