Some people say that schools cannot or should not be run like businesses. But as both a businessman and a school board trustee for my local school district, I know firsthand that schools could benefit in many ways from the example set by the business world.

Michigan public schools already share at least one key defining trait with businesses: They provide a service to those who need it. In the case of schools, education is provided to the families with school-age children who are their customers. It follows that schools, like any service provider that wants to survive and continue serving its customers, should observe four tried-and-true business principles that have worked well for successful enterprises. The four principles are as follows:

· Incentives improve quality. One of the first things that business leaders learn is that incentives matter. Positive and negative incentives work to reward talent and productivity and discourage incompetence and mediocrity. Businesses provide built-in incentives for employees whose talents or special ability will help them rise to different levels within an organization. Unfortunately, most school districts compensate teachers in a way that ignores the important role of incentives in producing quality. Professional educators are paid according to a salary schedule based on seniority and background as opposed to a professional system based on performance. In any school district, there are outstanding teachers who would probably earn over $100,000 in a free market. But public schools rarely provide proper incentives for those who demonstrate proficiency in their subject matter, possess leadership characteristics, dedicate extra time to their students, or maintain classroom discipline.

· High-performers tend to rise to the top. In business, managers are often hired for their fresh ideas and ability to inspire subordinates to reach their full potential. Good managers are expected to grow their company, not just maintain the status quo. School board members, as managers, should understand that you can't keep doing the same thing and expect to get different results. Superintendents and principals should develop measurable and time-sensitive goals for improving their school or district. If they don't produce the defined results, their dismissal should be automatic. Schools can't afford high priced administrators who fill only a clerical role.

· Focus on what you do well. Successful businesses understand that they must identify and focus on their core competency. They must be wary of wandering into unknown or unprofitable areas. Businesses are not afraid to spin-off or contract out unimportant or tedious parts of their trade. A company is quicker and more responsive when it concentrates on its area of expertise instead of distracting itself with peripheral activities. Schools need to focus on their main purpose, basic education, and stop chasing the latest programs such as all-day kindergarten or school-to-work. These fads too often build bureaucracies at the expense of sound education.

· Pay attention to the customer. Successful businesses identify their customers and develop ways to get continuous and accurate feedback on the quality of their products and services. Public schools, however, frequently fail to communicate effectively with their constituents. It's not so much that they don't want to, it's that they don't have to. They enjoy a luxury businesses do not have: a captive audience. Nearly 90 percent of Michigan children attend the school assigned to them by a government-sponsored education monopoly where both quality and customer satisfaction are at all-time lows. Competition strongly encourages businesses to operate efficiently and it can do the same for schools.

Like it or not, the laws of economics do not stop at the school house door. Only when public schools begin to introduce incentives, encourage high-performance, focus on education, and pay attention to the parents and students whom they serve will they become effective and efficient institutions deserving of the highest honor and reward businesses can achieve: customer loyalty and satisfaction.