Despite some encouraging signs that education reform efforts are raising achievement in one school here and another there, such piecemeal approaches have not yet yielded positive systemic results. To achieve districtwide improvement, a growing number of school systems are adopting a "portfolio approach" to district governance by replacing the typical central bureaucracy with a school board that manages a diverse portfolio of schools, some run by the school district and others by independent organization. Such an approach promotes innovation while maintaining strict accountability for results. In this article, the authors discuss the potential of the portfolio approach. To ensure that the portfolio approach is effective, the authors suggest that school district leaders must implement the following: (1) Common performance standards and assessments; (2) Commitment to multiple instructional models and academic programs; (3) District systems aligned with equity and flexibility; (4) Significant decision-making authority at the school-level; (5) Strong district capability to intervene in low-performing schools; (6) Flexible and supportive central office services; and (7) Broad-based commitment to leadership development. (Contains 1 footnote.)