Feb 23

FMS Participates with Virginia Governor’s Declaration of 2012 as the Year of the Entrepreneur

Yesterday, FMS President Luke Chung was invited by the governor’s office to participate in his proclamation of 2012 as the Year of the Entrepreneur. Luke stood behind Governor Bob McDonnell and Lieutenant Governor Bill Bolling during the press conference and participated in a day-long event supporting entrepreneurship, small businesses, and job creation.

Commerce Secretary James Cheng led the events. Participants were able to hear from successful Virginia business founders and learn from each other through a luncheon and Entrepreneurial Town Hall. Examples of agricultural, technology, manufacturing, and craft businesses showed the diversity of Virginia firms offering products and services for in-state, national and international customers. It was also interesting to trace the roots of the founding of Virginia in 1607 as a high-risk entrepreneurial enterprise that eventually led to success after many failures.

All parties recognized the value and responsibility of seasoned entrepreneurs helping newer entrepreneurs, and how fundamental this was to the success of our state and nation. Activities will occur around the commonwealth over the year where government representatives and entrepreneurs share their ideas, experiences, and resources. Already recognized as one of the most business friendly states in the country with one of the lowest unemployment rates, Virginia continues to foster business success in a bipartisan manner.

Noteworthy was the inclusion of Education Secretary Laura Fornash in the activities stressing the importance of public education as part of a healthy business climate. This includes having great K-12 education and the many higher education institutions across Virginia. Those institutions attract bright students from outside Virginia, create entrepreneurial opportunities around them, and give us the ability to keep them in Virginia for life. FMS and Luke Chung are honored to be a part of this initiative.

For more information visit:

Jan 18

Teacher Performance Task Force for Fairfax County Public Schools

This blog was referenced in Jay Mathews’ Washington Post article on February 2, 2012:
An outsider’s wild teacher-evaluation idea

We at FMS have always been passionate about education and have provided a wide range of software solutions for the education community at all levels. Over the past several years, I’ve served on a Business and Community Advisory Board to the Superintendent of Fairfax County Public Schools. The public schools in Fairfax County are among the best in the nation with 180,000 students, making it larger than 12 states (by student population). I currently serve as the school board representative on the county’s Information Technology Policy Advisory Committee (ITPAC) to the Board of Supervisors where we review major technology projects for the county.

Tying teacher performance to student achievement

At the beginning of the school year, I was appointed by the superintendent to participate in the county’s Teachers Performance Evaluation Task Force. I’m one of two outsiders on this committee of 35, which includes some of the best teachers, principals and administrators across the county. To meet the waiver requirements of the Federal No Child Left Behind statute, the State of Virginia is requiring teacher performance to be tied to student performance. The state department of education is recommending a 40% weighting. They are not defining on what to base student performance, but state standardized test scores immediately come to mind.

As an outsider who has never been evaluated as a teacher, you can imagine my surprise to discover that while principals were judged by their school’s student performance, student performance is not part of a teacher’s performance evaluation in our county (and probably state). 0% Are you kidding me?

I’ve learned that there’s a lot of angst around this. We all recognize that not all students are equal, and we don’t want to have a system where teachers are evaluated solely on student performance because the incentive would be to only want to teach good students. Good students may perform well in spite of bad teaching, so raw scores are not a good indicator of performance. The fairest testing evaluation system seems to be the concept of “value added” measurements. That is, as a teacher, you’d have students coming in at a certain percentile, and leaving at another percentile at the end of the year. If your students move up, you’ve added value; if they’ve moved down, they would have done better with an average teacher. Sounds good in concept, but this has practical problems such as kids moving in and out of classes within the year, impacts on kids outside teacher control, whether the test is a good measurement, multiple teacher collaborative environments, etc.

That said, 0% is still not acceptable. Nor is scrapping the whole concept based on a few outliers or issues. Especially compared to the current evaluation system where a principal or administrator sits in a classroom for less than an hour each quarter, and huge challenges removing under-performing teachers who don’t improve with training.

What have I learned?

I have been very impressed by individuals on the committee who get it. They understand that it’s in their best interest and that of their profession to set high standards and meet them. Failure to do so not only harms students but undermines political and taxpayer support for public education. Change is coming from the federal level down, and taking a leadership role has long-term benefits.

In our fast-changing software world, we need people to constantly gain new skills and improve their productivity. Performance with old technology last year may not be relevant this year. We can’t rewind each year and evaluate people on skills, client relationships, projects, etc. since so much changes each year. However, in education, the inputs each year are essentially the same (it’d be nice if student performance continually improved but that’s not changing significantly). 

In spite of all the shortcomings, there are actually lots of objective measurements available to judge teacher performance. Almost all academic courses have existing pre-tests and post-tests for classes, and of course there are standardized tests. Those opposed to tying teacher performance to student achievement tend to be the ones least interested in providing any measurements for doing so. Propose alternatives if the existing ones are not acceptable. We can’t treat teaching like an art that can’t be measured.

As I pondered the issues around teacher performance, it always boiled down to philosophical issues. What does it mean to be a good teacher? Average class performance? Performance of the best kids? Raising the weakest kid? What if you can’t get a kid to engage and be interested? Whose fault is that? We’ve always known there are great teachers who many people love yet others passionately hate. Who’s best to judge, the students, administrators, peers, parents? Everything has shortcomings.

Who benefits and pays the most for good or bad teaching?

Over the holidays, I started thinking of teaching in a totally new way by considering: Who benefits and pays the most for good or bad teaching?

  • Well, the students do of course, but no one is eager to have students evaluate teacher performance directly due to the many conflicts of interest.
  • Parents? They certainly have a stake but being a parent myself and being around other parents, I would hardly consider parents qualified to really know what’s going on with individual classes — they should stay focused on evaluating their own children.
  • Bureaucrats? Whether at the federal, state, or county level, I think they’re hard pressed to come up with specifics for evaluating a particular teacher. They can design what should be taught and offer resources and training, but evaluations taking into account each school and class’s unique situation is too detailed to do with broad requirements.

An alternative paradigm: ‘Teachers are the Customer’

I’ve now come up with a whole new way to look at teaching. Essentially, a teacher receives kids from upstream, trains them, and then passes them off to their next downstream teacher. Looking at it more like a production line, the teacher is a huge beneficiary and victim of good and bad teaching, more than anyone else in the system other than the student. Teachers should be empowered to define expectations and evaluate their upstream teachers for their performance. Done properly, this creates a positive feedback loop and automatically addresses any unique issues within a school. After all, doesn’t every teacher want to grow and deliver the best batch of students to their colleagues? Looking at it from this perspective, the teachers I discussed this with all knew exactly which teachers upstream from them they thought were good or bad overall and for different types of student personalities. In fact, several said there were teachers they would want or avoid sending their kids to. Wow, wouldn’t it be great to include the input of downstream teachers in a teacher’s evaluation? Isn’t that an important person each teacher is serving? I felt I made a mental breakthrough.

Feedback from the administrators

So I introduced this to the Teacher Performance Task Force last week. And while they appreciated my new perspective, I didn’t receive an immediate endorsement. They raised some issues such as teachers were not trained to do this, and how new teachers could properly evaluate more experienced teachers. I took their feedback under consideration.

At last night’s meeting, I mentioned my idea to the superintendent. He liked my approach and asked how it was received within the task force. It then occurred to me that the feedback there was not acceptable. The concept that more junior downstream teachers would evaluate more senior upstream teachers may be too foreign and frightening for some to accept, but that’s a resource which should be utilized. Training to do it properly is just training. You have to serve your customer. I’m not saying a teacher’s entire performance is based on that or that experience isn’t a factor (it is), but the next teacher plays a unique and important role in evaluating performance. 

What’s next?

Overall, I appreciate the committee welcoming and encouraging my feedback and treating me as an equal, given my never having been a teacher. We all share a goal of improving public K-12 education with a fair teacher evaluation system, and I recognize I’m naive about these actual evaluation processes. They’ve asked for my out-of-the box thinking and applying best practices from outside the education community. That’s how I reached my teacher focused paradigm. Teachers have the most at stake with creating an evaluation system that at the very least, identifies and removes poor performers that training fails to improve. Teachers are very concerned with the new evaluation system, so empowering them in the process should be positively received. In the end, teachers pay the highest price if improvement doesn’t occur. First in their day-to-day classroom efforts dealing with under-prepared students, and longer term their professional reputation and taxpayer support. Removing under-performing teachers, doesn’t even reduce headcount. It gives an opportunity to someone who is eager to teach in the school system and has above average promise (if not, that’s a recruiting problem). Beyond that, the evaluation system should focus on professional development to help teachers identify areas of improvement. There will probably be a different process for evaluating rookie teachers who are expected to gain skills initially versus more experienced teachers who should already have those skills and falling back to “rookie” level would not be considered acceptable.

We have a few more meetings before the task force needs to finish and make its recommendations. They are hoping to put the new system in place for next school year. Wish me luck.

Luke Chung
FMS, Inc.

Sep 16

Participating on the Senate Finance Committee’s Small Business Roundtable

Senate Finance CommitteeI had the privilege and honor to be one of 18 small business owners from across the country to participate in the Senate Finance Committee’s Small Business Roundtable yesterday.

Convened by the senior tax policy advisors of the Senate Finance Committee’s two chairmen, Senators Max Baucus (D-Montana) and Orrin Hatch (R-Utah), it was their desire to learn how tax policy helps, hurts, and influences small business owners.

The meeting was held in the Dirksen building of the Finance Committee room with the big elevated dais under the Senate seal. We were sitting around a rectangular set of tables on the floor of the chamber with the staffers on one side and the business owners around the other three.

Rather than politicians, these were the senior staffers of the Senators and were the people actually responsible for understanding the issues and writing the legislation that gets passed.

Unlike the political rancor by their bosses the last few months, these people from both parties were sincerely interested in crafting legislation that would benefit small businesses. After all, every politician has small business constituents, and wants to help us create more jobs. They were also delighted to hear our perspective which is very different from the interests of large and multinational businesses that dominate lobbying efforts on Capitol Hill.

Led by Holly Porter and Jim Lyons, we discussed how tax policies impact our businesses and what we would like to change. The meeting lasted for three hours and was very interesting. It was a nice cross-section of American businesses. The 18 businesses came from 11 states. Among us, three were technology firms, there were a few manufacturing companies, retailers, industrial services, and professional services firms. Most of the firms, like FMS, have been around for decades. 

Because of the diversity, different businesses wanted and needed different types of tax legislation, but overall there was general agreement:

  1. Business owners are too busy trying to generate revenue and deliver services to focus too much on tax policy and special credits or incentives.
  2. The tax code is too complicated and no one understands what’s in it. Our accountants file our taxes and whatever benefits or credits exist, we may capture them if we’re lucky, but well after the decisions were made. As a group, we’d prefer lower tax rates with fewer deductions.
  3. The cost of compliance is too high and too complicated. Personally, I’d like to see a national sales tax and never have to file a tax return again. After all, companies use government services even if they don’t make a profit — or a profit in the United States. Just dreaming here….
  4. The incentives added to the tax code get changed so often that they are hard to know and use. There were requests to have whatever policies implemented to be permanent or at least have a three-year life so that people can understand and actually make decisions to use them. The staff immediately mentioned this wasn’t possible because today’s Congress can’t constitutionally obligate a future Congress. Hopefully they’ll recognize the maybe you have it or maybe you don’t legislation doesn’t help businesses with long-term planning. 
  5. Due to significant changes in income or losses from year to year, and investment/sales cycles that don’t fit neatly in a fiscal year, it would be desirable to average income across multiple years. That would be fairer and more aligned to long-term growth in a progressive tax system that assumes relatively level annual incomes.
  6. For more asset intensive businesses, the small business rules (Section 179) for immediate expensing of equipment that would otherwise be depreciated is important for cash flow and creating jobs. For those who aren’t familiar with this, when businesses purchase certain “long-life” equipment, the amount paid can’t be immediately deducted from income and have to be deducted and depreciated over time. The problem is that the company has to pay taxes on income which doesn’t deduct all the money spent on the equipment. Basically, you have to pay taxes on income that was never received. Section 179 helps with that. While in our firm, hardware is a small portion of our expenses so the impact is minimal either way, in manufacturing, it’s often critical. Personally, I’ve always hated the idea of paying taxes on money that wasn’t received even though you make it up in the following years. Just seems unfair when one is investing in the future of our people and company.
  7. Finally, there was a sense that no matter what legislation is passed, the big multi-national corporations are the primary beneficiaries of all the deductions with their teams of lawyers and accountants. And that small businesses end up footing the bill. Why should we pay higher taxes than General Electric? Far better to reduce the complexity and deductions, and give us a lower tax rate. There was also a general sense that large companies aren’t paying their fair share, shipping jobs overseas, and not investing in the local economies. One gentleman suggested that there should be preferential capital gains tax rates for investments directly in real businesses versus financial speculation on the stock markets. Makes sense to me.

They asked us if there was anything they could do with tax law to directly decrease unemployment and we didn’t offer many suggestions. In fact, the feedback was overwhelmingly negative on some of the attempts to improve employment such as the HIRE Act and reducing employee FICA taxes. They were considered to have zero impact on any hiring decisions. The consensus was that we need increased demand for our products and services, and that we’ll create jobs if we see opportunities to increase profits. Unfortunately, that may beyond the power of tax legislation. Anything they can do to reduce the complexity of compliance and tax rates would be welcome.

Overall, it was a great experience to meet the people who craft the legislation we live under, and help them better understand what really impacts our businesses. I’m glad to see they reached out to small business owners and hope they’ll do what they can to help us remain competitive and successful.

May 16

Luke Chung and Members of ITPAC Tour Fairfax County Public Safety and Transporation Operations Center

Luke Chung and the other members of the Fairfax County Information Technology Policy Advisor Committee (ITPAC) toured the county's Public Safety and Transporation Operations Center. Combining state-of-the-art emergency response technology, this secure facility is ready to respond to human and man-made disasters. The blast resistant building houses the county's 911 response center with police and fire dispatchers, the traffic monitoring and management team, an emergency command center to coordinate really large responses, and the police forensics laboratories. Thanks for keeping us safe and a great tour of your operations!

Jul 08

Celebrating the 4th of July, and Participating in our Democratic Processes

I spent the 4th of July watching the fireworks in DC next to the Lincoln Memorial. It's always a wonderful experience to do that beyond the basic joy of watching cool explosions. Sitting by the reflecting pool with friends and family let us reflect on what a wonderful nation and concepts our founding fathers created by prioritizing the freedom of the individual.

Over the past few months, I've had the fortune of participating in our democratic system much more than usual. 

I was recently appointed to the Fairfax County Information Technology Policy Advisory Committee (ITPAC) on behalf of the school board, which is giving me insight into the challenges our county and all local municipalities face with providing services to its citizens. Some of the problems are quite fascinating and complex. I've only been to one meeting and we won't meet until after the summer, so we'll see what comes of it.

Late last month, I was invited to participate in a lobbying effort on Capitol Hill as part of the Association for Competitive Technology. I did this twice almost 10 years ago, so it's been quite a while. ACT gives small technology businesses a voice amid the battle among the large players, and brought in participants from across the country for a one day blitz. It turns out that we as a group are very under-represented on the Hill and were warmly received at all the offices we visited. All elected officials want to support small business owners in their districts, but don't seem to meet them too often on the hill. I was very pleased to participate in small group meetings and had a chance to meet my Senator Mark Warner (D-VA, very impressive as he really understands the technology industry) and Congressman Moran (D-VA). We also met the legislative aides for Sen. Hatch (R-UT), Congressman Connolly (D-VA) and Wittman (R-VA), and Speaker Pelosi (D-CA). Unlike the others, the speaker's office is in the Capitol building and was an interesting maze to get to both physically and through security.

The general message was to make sure they considered the impact of their decisions on small businesses and how unintended consequences of their decisions may impact us. Whether it's regulating the internet, net neutrality, cloud computing, privacy, international laws, taxation, patents, etc., a lot of issues affect small technology businesses. Considering the impact of small business on employment in this country, it's critical that they don't create more problems than they solve.

I don't know how much of an impact we had, but it was gratifying to walk the halls of Congress and see how they operate. There are a lot of challenges facing our country and world. Technology holds the promise that it can help us increase our productivity and ability to address those needs in a meaningful way at a reasonable cost. I hope they continue to foster an environment that allows technology, innovation, and entrepreneurship to prosper for the common good.