This exploration into competency-based innovation at the school, district, and state levels suggests that competency-based pathways are a re-engineering of this nation's education system around learning--a re-engineering designed for success in which failure is no longer viable. This discussion draws on interviews and site visits with innovators and the limited literature that has been developed on the topic of competency-based approaches. The first section introduces a working definition for competency-based pathways that hopefully will be the beginning of creating consensus on the characteristics of a high-quality approach to guide policy. The second section explores the driving forces behind competency-based innovations and implementation issues. The last section highlights a number of challenges facing states and districts as they explore competency-based approaches. This paper has been designed to generate a deeper understanding, as it is critically important that competency-based pathways be implemented effectively with a vigilant focus on student learning. Appendices include: (1) Descriptions of Innovators; (2) Resources; and (3) Interviews. (Contains 14 resources and 23 endnotes.)