Purpose This paper considers the implications of reform efforts that rely on charter management organizations to assume operational control of underperforming neighborhood schools. The purpose of this paper is to examine the way in which changes to the education sector place enormous pressure on these organizations to both manage instruction and their social environments. Design/methodology/approach The research presents the results from a longitudinal case study of two organizations operating within the Tennessee Achievement School District (ASD). Interviews, observations and document analysis provided insight into the perspectives of school operators, state officials and community leaders. The study design allowed researchers to observe the influence of the environment on school operators over a four-year period. Findings Results show that the environment that included a muscular state, market pressures, NGOs and local communities placed an extreme and contradictory set of demands on organizations operating schools, pressing them to develop robust systems of instruction, leadership and teacher development while actively working to ensure social legitimacy in the community. Neither a national network nor a small local startup began with a strategy aligned to these environmental demands, and both needed to make substantial revisions. Research limitations/implications Research into contemporary educational reform should account for rapidly evolving environments that feature a complex mix of resources and incentives. Careful examination of the consequences of these environments for educational organizations will further our understanding of how markets, communities and governments are shaping the education sector. Practical implications The extraordinary challenges that confront organizations that operate in crowded and contested environments preclude fast or dramatic results. Policymakers and the public should assume an incremental process of organizational learning and improvement. Setting unrealistic expectations and focusing exclusively on impact risks delegitimizing organizations and policy initiatives before they have time to adapt. Originality/value This research reported here is among the few studies that have explored the experiences and implications of NGOs that have attempted to assume operational control of underperforming neighborhood schools. The popularity of this approach among a growing number of states highlights the importance of this topic.