Will private schools survive covid-19?

It appears private schools are the loudest institution likely to take the Nokia route. Nokia (renowned for its global mobile ‘phone dominance’) collapsed when technology changed. "They missed the importance of software," analysts say. "Nokia was, at its heart, a hardware company and emerging software (Andriod and iOS) offered customers an opportunity for a much better experience.” The mistake moved Nokia from a staggering one billion customers as recently as 2007 to poof! Nothing.

Now the disruption from this pesky virus is firing on all cylinders: political, economic, social, technological, environmental and legal. The firing of these ‘cylinders’ dictate the direction of any business. So far, given the accentuated use of the internet, only the technological one is firing positively. How many businesses will survive? As for private schools, which ones will die? Which ones will survive? And which ones will thrive?

Who would ever have imagined no learning for a year? School fee was an unending gravy train, which the schools rode to the bank. Now, with zero income and standing costs (salary being the biggest) what do they do? Caught flatfooted, their initial salvo backfired. Telling parents (their customers) that they must pay full fees for online learning because, wait for it, “Schools have expenses relating to electricity, digital devices and internet. All these have to be costed and someone has to pay for it.”

This callous stance despite an obviously diluted teaching experience, and at a time of diminishing incomes for parents, was ill-advised. Predictably, that salvo ignited an emotionally charged powder keg with some schools being taken to court by their customers. Wisely, many agreed to a discounted amount because there was hope that physical learning would resume soon. Now that it’s been deferred for a year that seismic shift at a time they were yet to recover from the first one has many teetering at the edge of a precipice. Scores have already shut down.

But costs are half the story. The other half is more complex — customer and staff retention. Parents are gauging the growing alternatives, including home schooling, private tuition, and, with a shrinking economy, even public schooling. It's not a guarantee that they'll come back when the dust settles. Yes, you can always advertise for other students, then. But will the opportunity cost have been worth it? And laying off staff means recruiting afresh which is not necessarily a cheaper alternative.

So, do you keep them on payroll and convince (quintessentially impatient) shareholders to invest through the pandemic? Or do you lay them off with a promise to recruit them afresh?

Whatever decisions they arrive at two things are clear: in a crisis knee-jerk reactions to appease the short- term invariably comprise the long-term; and, those that started the school in pursuit of a vision versus those in pursuit of the gravy train will be made manifest. Your business could be next.

What would you do if you owned a school?