ALSO IN THIS ISSUE
- Advance with a Defined Sense of Purpose
- Identify Inefficiencies on the Academic Side of the House
- Prioritize Academic and Administrative Units
- Plan for Resource Allocation in Ways That Build Trust
It's vital to recognize that the single greatest source of financial resources will not come from tuition increases, state or federal funding, or alumni support, but rather from the reallocation of your existing resources. Institutions of all sizes, types, and selectivity are currently investing in academic and administrative programs that are not critical to their mission or their market position, and that in fact drain their financial resources and limit their ability to generate more resources.
"Strategic plans have become purely additive. ... These plans tend to assume several things: (1) the status quo as a given, with all current programs composing the baseline, (2) all programs, goals, and objectives are to be "maintained" or "enhanced," but rarely diminished or eliminated, (3) if resources are mentioned at all, they are to be enhanced by hiking tuition, increasing enrollment, securing more appropriations or grants, or raising more money, or all of these, and (4) all planning goals are equal in weight and importance and thus lack priority. This is neither planning nor strategic."
Bob Dickeson, in Prioritizing Academic Programs and Services (2nd ed; Jossey Bass, 2010)
The most important step you can take toward strategically reallocating your resources is to determine which programs are most important to your mission, market position, and financial health. We interviewed Bob Dickeson, former president of the University of Northern Colorado and author of Prioritizing Academic Programs and Services, to learn more about how institutions can identify critical administrative and academic units worthy of investment.
Prioritizing Academic Units
AI: How should institutions identify the criteria they will use to evaluate programs? Are there certain critical criteria that should always be included?
Dickeson: I recommend using 10 criteria:
- History, development, and expectations of the program
- External demand
- Internal demand
- Quality of inputs and processes
- Quality of outcomes
- Size, scope, and productivity
- Revenue and other resources generated by the program
- Costs and other expenses
- Impact, justification, and overall essentiality
- Opportunity analysis
Institutions which are in dire crisis have sometimes used only three: size, cost, and quality. However, I think a serious prioritization process, to be academically responsible, requires a more comprehensive analysis.
AI: How should institutions balance prioritization for academic versus administrative programs?
Dickeson: Typically, institutions have been avoiding the academic side of the house -- because cuts there are more politically volatile -- and instead have been chopping away at the administrative side, particularly adding to the deferred maintenance problem.
"I recommend that all programs at the institution -- academic and non-academic -- undergo one review, simultaneously. It's an entire institution, well-balanced for the future, that we're after."
AI: How do institutions ensure they account for the potential of new programs and the aging of older programs?
Dickeson: The criterion -- history, development, and expectations -- can give you insights into the history of the program: why was it developed? How has it evolved over time? Would it meet today's expectations for new programs? And other questions.
For new programs, you should apply the same criteria, but identify what expectations you have for the program and what consequences will occur should the new program not meet expectations. Many campuses, after prioritization, will reallocate resources away from legacy programs that are not performing and toward newer programs with greater quality and promise.
AI: What are the one or two key lessons you have learned as you have helped steward this process along at other institutions?
Dickeson: The most important factor is for institutions to recognize the need for reform. Often it takes a crisis for the multiple forces on a campus to come together and realize that reform is necessary.
Of course, many schools today face fiscal crises, and the recognition that something different must be done is more apparent. No effort to prioritize and then reallocate resources has been successful, however, without the proper alignment among the governing board, the president, and the chief academic officer. I've seen some examples of this process failing, and it always was due to lack of alignment among the chief players.
AI: Who are the executive-level champions that need to be involved?
Dickeson: The president, the chief academic officer, and the chief financial officer must be of one mind about prioritizing, and they should have sought (and secured) the support of the governing board before proceeding.
AI: Who should be involved in the committee that manages the program review process?
Dickeson: Campuses will differ on their views of inclusion. Some institutions want the committee to be composed only of individuals who have budget responsibilities. Others want the typical, representative committee.
My experience is that it doesn't much matter about the areas that are represented on the committee -- what matters is the wisdom and courage of the individual members. In the best cases, members see themselves as trustees of the institution, protecting its future, rather than as "delegates" representing a single interest, department, or area, and thus protecting the past.
Prioritization is not about politics as usual. It is an extraordinary undertaking with the future of the institution at stake, and the members of the steering committee are essential stewards in seeing that the process is fair and that the results are in the best interest of the institution.
I have actually seen the trustee-type member vote against his own program because he saw, in comparison with other programs and based on the data, that it was not worthy of his support.
AI: What can leaders do to mitigate low trust or actually build trust during academic program prioritization?
Dickeson: Trust is something that is built over a long period of time -- it cannot be manufactured overnight for priority-setting or for any other purposes. Trust comes about when leaders are open, transparent, and share with the campus community all the dynamics behind key decisions.
Leaders who are trusted seem to treat members of the community with respect and behave in ways that are above reproach. By contrast, leaders who play "hide the ball" or exaggerate the institution's problems, or engage in the practice of "noble lying" to try to reassure people -- wrongly -- that things are OK, will have great difficulty in repairing the relationships that build and sustain trust. Trust is like all relationships -- it takes working at, over time. Certainly during program prioritization, the process must be open, the data accurate, and the participation by all those affected encouraged. This does not mean that everyone will agree with the results; that is unlikely. It does mean, however, that participants will feel that the process was fair, even if they disagree with the outcomes.
MANAGING THE PROCESS IN A WAY THAT GENERATES TRUST
To learn more, read our article: "Plan for Resource Allocation in Ways That Build Trust"
AI: How varied is the process based on different institution types? Should research institutions, for example, go through a program selection process fundamentally different than a land grant or a teaching college? What variations in process would you recommend?
Dickeson: I have seen every kind of campus use the same process. What differs, of course, will be the scope of the exercise and the ease of securing the data to support responsible decision-making.
Larger campuses, with more sophisticated institutional research offices and cost-accounting methods, will have it easier than smaller campuses where the data may not be as centrally available and allocating costs may be tougher. But the steps of the process apply to all types of institutions, and all types have completed it successfully. It's also true that no two institutions do it exactly the same way -- they take the principles, recommendations, and criteria and adapt it to their unique cultures and issues.
Examples of Effective Academic Program Prioritization
We also asked Dickeson for a few specific examples of how academic program prioritization has been managed at a small campus versus a large research institution, as well as how each of these institutions of higher learning overcame barriers to prioritization. Dickeson directs attention to two examples:
Drake University established a strong steering committee of faculty and staff and encouraged the committee to develop a system-wide perspective of the issues faced by that institution.
Dickeson suggests three lessons that can be learned from the successes at Drake:
- "Set clear expectations for how the steering committee will operate as a university-wide entity that will make data-driven decisions in the best interest of the institution. Don't leave core expectations unspoken. If you expect it, be explicit."
- Establish a proactive communication plan that will inform decisions around who will receive what information and when.
- Institutional leaders need to treat a prioritization process not as a one-time effort but as an improvement in the way the institution will undertake ongoing strategic planning efforts (as part of its initial prioritization process, Drake built a database of pertinent information about its programs; Drake continues to update and use that database).
University of South Carolina
Several years ago, the University of South Carolina under Provost Jerry Odom undertook a prioritization process during a presidential search and faced considerable resistance from some academic leaders within the institution. Establishing a highly structured prioritization process with explicit "ground rules" quickly became necessary.
"It will be difficult to set your guiding principles as you go along," Dickeson cautions. "You need to have up-front dialogue to arrive at a consensus on these principles. That will remove confusion and some tension and will empower all participants in the process to be auditors of it. If someone is out to derail or roadblock the process, anyone can blow the whistle -- there are already shared, agreed-on principles."
Guiding principles for your prioritization process might include:
- How open the process will be
- Specific expectations for those involved in the process and how they will serve
- How critical data will be in driving decision-making
Prioritizing Administrative Units
AI: Bob, what about prioritizing administrative programs -- what are the most critical criteria?
Dickeson: Administrative programs are tough to measure. Most of them are related to essentials that the institution needs and which support the academic enterprise. There may be superfluous administrative programs, and there may be some that can operate with greater efficiency. The challenge in prioritizing administrative programs is to identify what is truly needed (demand), what is most cost-effective (productivity), and how well it is delivered (quality). Sometimes, separate fiefdoms within administration are created, and it would be important to identify and modify these so that replication is eliminated, management levels are streamlined, and effectiveness measures are emphasized.
AI: Could you offer a scenario or example to illustrate the importance of these criteria?
Dickeson: Financial aid is a necessary administrative program for reasons that are obvious. Yet I am struck by the plethora of financial aid models at work. There is no one best way to calculate and administer an aid package, yet most institutions cling to a "We've always done it our way" mode without exploring better, more efficient models. By so doing, they can reduce labor costs, streamline processes, get aid communicated to students and families more readily, and still be in compliance with federal and state regulations. Outsourcing of administrative functions is a growing practice in higher education but needs to be considered carefully.
AI: What questions can you ask to find out where to "trim the fat"?
Dickeson: Ask questions to identify the impact various budget cuts would have on operational units, for example:
"TRIMMING THE FAT": SAMPLE QUESTIONS TO ASK EACH UNIT
- What are the main objectives of your unit, and how do you measure success in achieving them?
- What are the services that your unit provides and to which customers (students, faculty, staff, donors, others)?
- List each position in your unit, and briefly describe the responsibilities of each.
- Do you see needs and demands for services that your unit cannot currently meet? If so, what are they, and how do they relate to the university's mission?
- In what ways does your unit relate to other units of the university, academic and nonacademic? For example, what services do you provide to other units? What services do other units provide to you? On what tasks do you collaborate with other offices?
- Which individuals in your unit are cross-trained and in what areas?
- What resources do you need to improve your services to a superior level?
- Explain how your unit could function with: a 10% reduction in staff; a 20% reduction in staff; a 30% reduction in staff; a 10% reduction in nonpersonnel resources; a 20% reduction in nonpersonnel resources; a 30% reduction in nonpersonnel resources -- what would be the consequences or other effects on service delivery in each case?
These questions are an excerpt from a full checklist available in "Resource C" in Prioritizing Academic Programs and Services.
If these questions are answered honestly, some fat will emerge. Examining structure is important: I once observed a director of housing and food service who supervised two people -- the director of housing and the director of food service. His position was unnecessary, and costly. Similar review of reporting levels and searching for opportunities to arrive at a leaner structure can prove beneficial. It is also beneficial to look at peer institutional practice, through the NACUBO studies, for example, that can provide comparative data on which to make judgments.
AI: Are there less obvious but important places to look for inefficiencies on the administrative side?
Dickeson: Processes are costly. It would be desirable to look at the costs to cut a check, to enroll a student, to make a repair, to purchase something, and so on. Often we have built enormous bureaucracies through the unnecessary practice of having every item go through too many steps, requiring too many signatures, all at a cost.