The recent economic crisis has driven a surge of interest in program prioritization, as state legislators and governing boards insist that colleges set priorities for future investment and as institutional leaders find that they can no longer afford to "be all things to all people." Facing severe financial shortfalls and external demands for accountability, many colleges and universities are having to make difficult decisions about what programs and initiatives are most worthy of investment.
A PROCESS FOR UNDERTAKING PRIORITIZATION
In his book Prioritizing Academic Programs and Services: Reallocating Resources to Achieve Strategic Balance (Jossey-Bass, 2nd ed; 2010), Dickeson outlines a process for pursuing prioritization efforts with direction, transparency, and rigor.
Over the past 10 months, four workshops addressing program prioritization have drawn 550 higher education officials from approximately 300 institutions in the US, Canada, and Puerto Rico. At each workshop, participants were queried about the drivers behind program prioritization and the challenges faced at their campuses. Though participants varied in their level of experience with program prioritization (some were exploring the desirability of conducting a prioritization process; others were mid-process and had questions about next steps; and still others had completed the process once and were returning to it), an amalgamation of their responses will likely provide a useful snapshot of how leaders in higher education across the continent are tackling program prioritization.
PROGRAM PRIORITIZATION: GETTING STARTED
This report assembles findings from the 550 participants queried. While the format for surveys and the means of expressing feedback varied for each workshop (and therefore would not meet standards for statistical validity), I have tried nonetheless to identify trends in the issues cited across all four groups of participants. Here is what the participants had to say about:
- The driving force: What's the impetus behind the desire to undertake a program prioritization process?
- Expectations: What do you hope to get out of prioritization (what are the opportunities)?
- Challenges: What are the perceived barriers to prioritizing?
- Criteria: What are the relative weights of the 10 criteria suggested in Prioritizing Academic Programs and Services?
- Data: What are the key sources for data to support program analysis?
- Other issues: What other issues surface in setting priorities?
The Driving Force
Perhaps unsurprisingly, participants at all four events identified "overall financial stress" as the key driver behind efforts to undertake a program prioritization process.
Other reasons driving the efforts included:
- "Setting priorities is a part of our overall strategic planning"
- "Making cuts across-the-board is no longer acceptable"
- "Prioritization is a recurring process, tied to planning, resource allocation, and assessment"
- "Being pushed by our chief academic officer in order to achieve academic excellence"
- "Governing board is insisting we set priorities"
The notion that "making cuts across the board is no longer acceptable" is a welcome and positive rationale for prioritization. For years, institutions have practiced across-the-board cuts simply because it has been more politically palatable. It is also wrong. By setting priorities, institutions are more likely to focus scarce resources on the most effective and mission-critical programs, rather than assuming that all programs deserve equal status and equal resources.
It's critical to manage expectations about the results of the prioritization process. Prioritization is not a panacea for all the institution's ills. We do know from the many colleges and universities that have undertaken prioritization that the process can lead to a greater focus, a release of previously misallocated funds for dedicating to higher priorities, and a new look at old paradigms that no longer make sense for the institution. At the same time, it is important not to oversell the expectations of positive results, and to focus instead on anticipating and articulating specific goals and measures for the process -- either in percentage or dollar goals. Prioritization efforts that are not driven by specific and tangible objectives often come up short, leading to a loss of trust and a frustration among stakeholders: "We went through that process, and this is all that resulted?"
When asked what they hoped to achieve through prioritization -- or what opportunities they hoped to find -- participants identified these objectives:
- Addresses our net decline in financial resources
- Identifies savings
- Creates an incentive fund for change
- Balances efficiency and efficacy in investments
- Our top programs need more resources
- It responds to budget cuts and adjustments
- We have too many under-resourced programs
- Have to do it if we are to increase faculty salaries
- We need financial sustainability
- Achieves optimal use of limited resources through resource allocation
- Upcoming campaign: it will help us decide what to invest in
- Provides greater clarity to mission
- We suffer from years of inattention to prioritizing
- Improve academic quality
- We feel adjuncts play too big a role
- We are facing re-accreditation
- We have to resolve maintaining our liberal arts core versus career program demand
- Need new programs, especially multi-disciplinary programs
- This will help us educate faculty about new program criteria and costs of new delivery system
- This will help resolve faculty workload issues and individual requests
- Program renewal and continuous improvement
- This has been requested by our president
- This is seen as part of strategic planning
- We have board members with business backgrounds
- We have a new president and a new chief academic officer
- Need to look at support programs as well
- We need to do this at every level on campus
- It will enable us to leverage opportunities
- It's an identifiable process to achieve consensus
Others among the participants noted expectations that the process would help them resolve issues around space allocation and provide greater accountability to the public and to their students.
Here are perceived barriers to prioritizing noted by the participants:
- Lack of buy-in and resistance from faculty, driven by fear of job loss, issues surrounding tenure, union involvement, and fears over loss of institutional identity or academic rigor: "How can you be a university without X program?"
- A campus culture that isn't conducive to prioritization, whether due to internal and external politics, aversion to risk, a mission that is too broad to guide clear priority-setting, or a lack of trust in the committee charged with prioritization and a fear that committee members will act as representatives of their programs rather than as trustees of the institution
- Difficulties in implementation, including a lack of tools for managing relevant data, the need to keep leaders throughout the institution focused and committed, developing a clear and fair decision-making process, and finding appropriate ways to phase out low-priority programs over time while ramping up investment in others
OVERCOMING THE CHALLENGES
For advice on approaching a prioritization process in a way that can transform campus culture and build trust (rather than damage it), review the October-November 2010 edition of Higher Ed Impact: Monthly Diagnostic, "Securing New Resources in a Difficult Economic Climate."
Presumed resistance from the faculty is certainly a prevalent fear. From my observations and from working with hundreds of campuses over the years, I would add an additional challenge, one that is less often discussed publicly: resistance on the part of the president of the institution. Often, a provost will push for prioritization and will face difficulty in convincing the president to act. Because it is assumed that a prioritization process will be fractious and might involve negative reactions, presidents who are approaching an evaluation that might presage their continuance in office may be wary about entering into the fray.
However, this fear can be misplaced. Often the faculty desire some action around resource allocation, as they know perfectly well that without it, there will not be sufficient resources to mount programs with quality, or address salary inequities, or fund other institutional priorities. With each year, there is a growing awareness that institutions need to prioritize their resources, and perhaps presidents who drag their feet may be doing so at their own peril.
Weighting the Prioritization Criteria
Prioritizing Academic and Administrative Programs asserts that academic programs should be assessed and analyzed using 10 core criteria, but participants at the events had varying views of the relative importance of each criterion. In order to use these 10 criteria effectively to rank programs, it's crucial to assign relative weights.
In one exercise, chief academic officers and chief financial officers from independent colleges were asked to rank the prioritization criteria in ways that made sense to their institutions; they arrived at the following rank-order:
1. External demand for the program
2. Quality of outcomes
3. Size, scope, and productivity of the program
4. Impact, justification, and overall essentiality of the program
5. Costs and other expenses associated with the program
6. Internal demand for the program
7. Revenue and other resources generated by the program
8. History, development, and expectations of the program
9. Quality of program inputs and processes
10. Opportunity analysis of the program
It should be noted, though, that some participants preferred to merge revenue and cost into a new category: "net revenue."
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Sources of Data to Support Program Analysis
It is one thing to identify the most important criteria for prioritizing programs, and quite another to identify the available sources of data for use in applying the criteria. In possibly the most useful takeaway from the Academic Impressions conference in Baltimore, MD in October 2010, participants shared what sources they would use to buttress the analysis of programs, under each criterion.
TO ANALYZE EXTERNAL DEMAND FOR THE PROGRAM
- IPEDS Reports: Enrollments
- College Board data
- Noel-Levitz reports
- HERI reports
- Incoming transfer students
- US Department of Labor projections
- Employer feedback
- Placement office reports on placement, alumni, professional association reports
- State/regional needs; economic development data
- Student application information
- Marketing surveys, new or non-traditional students
- Offer-to-acceptance rate trends
- State and federal requirements
- Program added or cancelled at nearby rival institutions
TO ANALYZE QUALITY OF PROGRAM OUTCOMES
- Measures of graduate satisfaction
- Graduation rates
- Job placement and success; earnings reports
- Success rates on graduate examinations (GRE, LSAT, MCAT, state licensure exams)
- Graduate and professional school enrollments
- Number of graduates completing graduate and professional degrees
- Involvement in community and public service
- Recognition and awards
- Student learning outcomes, portfolio quality
- Employer satisfaction surveys
- Alumni support, donor database
- Faculty awards, prizes, professional distinction
- Graduates' publications and presentations
- Other external validation of quality
TO ANALYZE SIZE, SCOPE, AND PRODUCTIVITY OF THE PROGRAM
- Ratio of students to faculty; adherence to such formulas
- Applicant-to-capacity ratios
- Applications-to-yield, by program
- Section fill rates
- Five-year graduation rates, trend-line
- Volume of sponsored research results
- Student retention rates, by program
- Number of clients served, internal and external
- Redundancy of courses across the institution
- Proportion of faculty time spent in teaching/research/service
TO ANALYZE IMPACT, JUSTIFICATION, AND OVERALL ESSENTIALITY
- Contribution to reputation
- Contribution to state's economy
- Degree to which program is "mission-critical"
- Other measures of value
- Contains elements/resources for forward-looking new programs
- Potential to become a national leader
- Contribution to the advancement of knowledge
- Long-term need versus short-term demand
- Political influence
TO ANALYZE COSTS AND EXPENSES
- Fully allocated cost per FTE student
- Allocated institutional support (library, computing, tutoring services, other administrative support)
- Required expenses for regulatory or specialized accreditation requirements
- Marginal cost of program (Delaware Study of Instructional Costs; Control Data stores; faculty salaries, credits generated by section, capital, and equipment)
- Informational technology costs (EDUCAUSE)
- Variable costs
- Analysis of long-term versus short-term costs
- Cost of duplicate or redundant courses/programs/services
- Salary benchmark data
TO ANALYZE INTERNAL DEMAND FOR THE PROGRAM
- Student enrollments in program (Institutional Research, Registrar, Admissions)
- Programs that support majors and minors of other programs
- Level of shared curriculum with other programs; cross-listing of courses
- Program mapping of courses delivered
- Student credits generated by: major, minor, general education, service courses
- Formal interdisciplinary programs
- Patterns of student self-directed programs
- Projections of future internal demand
TO ANALYZE REVENUE AND OTHER RESOURCES GENERATED
- Tuition, program-allocated
- Grant income and F&A
- Gifts and donations, program-specific
- State or federal funding, program-specific
- Revenue from clinics, centers, other enterprises; ticket, workshop income
- Special program fee income
- Online program revenues
- Other revenues obtained
TO ANALYZE THE HISTORY, DEVELOPMENT, AND EXPECTATIONS OF THE PROGRAM
- Historical enrollment patterns
- Alignment with mission (academic plan, business plan, annual reports, self studies, program reviews, board documents, presidential and CAO judgments, mission statements)
- Relationship to national research agenda
- Relationship to labor market data
- State requirements and goals
- External reputation as measured by state coordinating board
- Geographic uniqueness in state, region
- Legacy programs with reputation that draws students
- Incubator of institutional faculty leadership and advancement
- Degree to which program contributed (and still contributes) to institutional expectations
- Extent to which program is "core" to the educational experience
- Faculty and student data over time
- Does the program address critical shortage areas in the state?
TO ANALYZE QUALITY OF PROGRAM INPUTS AND PROCESSES
- Student academic profile data
- Other schools applied to and enrolled (NSLC, FAFSA, ACT, SAT sources)
- Percent of faculty with Ph.D.
- Percent of faculty with awards or other national distinction
- Quality of holdings/equipment/facilities needed to execute the program
- Program review data; specialized program accreditation
- Faculty expertise in teaching methodologies
- Faculty experience
FOR OPPORTUNITY ANALYSIS
- New program opportunity: potential net revenues, potential for "signature" program status; potential for unique niche programs
- Exploration of alternative delivery mechanisms
- Formation of productive external partnerships and collaborations
- Potential for interdisciplinary programs
- Opportunity to realign or strengthen existing programs
- Specialized programs for key stakeholders
ADDITIONAL (NATIONAL) DATA SOURCES
- FAFSA data
- AGB Information Mosaic
- NSSE Reports
- CIC: KIT and FIT Reports
- National College Health Assessment
- CUPA data
- AAUP Salary data
- IPEDS peer analysis tool; peer executive tool
- Bond ratings from Moody's, Standard and Poor's
Other Issues that Surface when Setting Priorities
As might be expected, participants also raised additional questions specific to their institutions, including whether a school or college should undertake prioritization even if the university as a whole does not, whether to use one or two steering committees to review academic and non-academic programs, and how to strengthen the relationship between the CAO and the CFO during the process.
I was surprised to hear significant concerns raised about the CAO-CFO relationship. The CFO has a rough job, balancing the books in troubled times, and often that officer has to be the bearer of bad tidings. In some cases, this may be because the president or other cabinet officials lack the courage to "tell it like it is": times are tough and the money to do what we want simply isn't there. Passing this buck on to the CFO is probably not fair; there may be a tendency among the senior academic officers to blame the CFO for the economy. Adding to the problem, the academic side of the house often entertains myths about the budgeting process, particularly if that process isn't as transparent as it could be.
These times call for a high degree of collegiality among the executive team of an institution, and it is especially important that team members support each other in their various tasks. It will be critical to educate all members of the team about the realities of the budget, and move the conversation from one of blame and turf protection to one of collaborative planning.
Finding Solutions to Thorny Problems
Finally, many workshop participants offered positive suggestions to their fellow participants on how to handle critical issues. Here are the practical takeaways:
To address political issues:
- Define the process openly and consistently
- Focus the conversation on the problems that drive the need to prioritize
- Identify and include in the process major stakeholders and prominent voices on campus (even voices that are initially negative)
- Communicate at every step
To address faculty resistance:
- Get faculty involved as early as possible
- Educate the faculty about the "big picture"
- Share the data openly, and invite faculty into the process of translating the data into meaningful information
- Bring in an outside facilitator or rely on an internal figure who has credibility with the faculty
To move forward when your institution's mission is too broad to help in priority-setting:
- Establish a vision statement with a narrower focus to aid in guiding priority-setting
- Develop specific metrics to measure quality, productivity, and financial health of each program
- Near the start of the process, seek consensus as to what specific factors add the most value in support of the mission
- Invite stakeholders in the process to concentrate on what the institution is to become, not on what it has been
For Reference: 2010 Workshops on Program Prioritization
The input included in this report came from participants at four events:
A NACUBO webcast on January 19, 2010 (presenters: Robert C. Dickeson, Victoria Payseur, and Richard Staisloff) with 135 institutions participating; the participants included presidents, vice presidents for finance and administration, vice presidents for academic affairs, controllers, budget directors, deans, and directors of institutional research.
An Academic Impressions webcast on July 16, 2010 (presenters: Robert C. Dickeson and Larry Goldstein), with 272 institutions participating; the participants included presidents, provosts, chief financial officers, other academic and business leaders, and board members.
An Academic Impressions conference on October 18-19, 2010 (presenters: Robert C. Dickeson and Larry Goldstein), with 50 registrants representing 23 institutions. The participants included presidents, provosts, financial officers, other academic and business leaders, and institutional research officers.
A Council of Independent Colleges (CIC) workshop on November 8, 2010 (presenters: Robert C. Dickeson and Johann Lindig), with 96 registrants representing approximately 50 institutions. The participants included chief academic officers and chief financial officers.
Fusch, Daniel. "Securing New Resources in a Difficult Economic Climate." Higher Ed Impact: Monthly Diagnostic. Academic Impressions. Oct-Nov 2010.
Lederman, Doug. "The Pressure to Prioritize." Inside Higher Ed. November 11, 2010.
Turner, Trae (ed). "Back to Basics." Business Officer. NACUBO. July/August 2010. p. 55.
"Special Report: CAO/CFO Institute." Independent. Council of Independent Colleges. Fall 2010. p. 9.