In 1994, Harold Levy went back to school. In the 25 years since he'd stepped inside a New York City school building, he had risen from a star pupil at the Bronx High School of Science to a corporate lawyer chairing a high-profile commission examining the infrastructure of the city's public education system. In those years, his old elementary school had not fared as well. A wall there was propped up because it threatened to fall onto students. In other buildings, he found rotted window panes, crumbling bricks and falling chunks of plaster.

Frustrated by the extent of the decay, Levy lashed out at the state, the city and Congress. "No one would tolerate this in the private sector," he said. "At the same time we're talking about bringing high tech to the schools, the reality is we have workmen stoking boilers with coal as if it were 16th-century England."

Six years later, Levy is looking at the problems from the other side of the blackboard. In less than a year, he has gone from being a vice president at Citibank with no professional training in education to being chancellor of the New York City Public School system. Along the way, he made a believer out of Mayor Rudolph Giuliani, who vehemently opposed his January appointment as interim chancellor but ended up endorsing him for the permanent position in May.

Levy has assumed a job that many prominent educators would flee from. The children and adults of the public school system in New York add up to roughly the population of San Diego. While test scores have improved slightly in recent years, they are still below national averages. And Levy is facing the biggest teacher shortage in the country, with 78,000 teachers expected to leave in the next five years.

All these problems are now the responsibility of a man who has never run one school, let alone the 1,145 in New York. But despite his lack of experience, Levy has gone full-speed ahead. He has made the bureaucracy his top target, slashing a host of regulations and converting some failing schools to private management. Drawing on his business background, he is acting more as a CEO than a traditional chancellor, stressing accountability, efficiency and organization.

And while working on the big problems, such as union contract negotiations and a lawsuit from the state over uncertified teachers, Levy has made time for cracking down on minutiae. When he found a filthy men's room in the Board of Ed building, he posted notices around the building telling janitors they would be fired if the bathrooms weren't cleaned properly. When he couldn't get hold of Board of Ed staff, he hired a private consulting firm to investigate why they don't pick up the phones. To promote arts education, he arranged for Isaac Stern to give the system's 43 superintendents a violin lesson.

In becoming chancellor, Levy has joined a growing movement of outsiders taking the reins at big-city school systems. An attorney, an ex-governor and a former budget director now run the schools in San Diego, Los Angeles and Chicago. While there is little doubt that such managers have brought fresh ideas and increased accountability, critics insist there is a downside to the absence of traditional school management experience.

In Levy's case, some education professionals fear that by focusing so heavily on management, he is ignoring critical instructional reforms. "How much of what he's doing in management is going to make a difference in the quality of instruction?" asks Norm Fruchter, director of the New York University Institute for Education and Social Policy. Others question Levy's decision to send his own children to an exclusive private school.

But using the persistence and sense of humor that propelled him through the business world, Levy has so far silenced most of his critics. And for better or worse, he is getting credit for turning the system upside-down. "Levy understands that the system is the enemy of the kids," says Sol Stern, a fellow at the Manhattan Institute. "He's willing to start dismantling the bureaucratic system."