Quality Endeavors Issue No. 133

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November 2010

The current financial situation and its impact on programs and staffing are issues faced by many institutions. At the 2010 conference of the National Consortium for Continuous Improvement in Higher Education (NCCI), 15 institutions and several additional organizations shared information about recent initiatives and observations related to these topics and others. Highlighted below are the approaches taken in response to the fiscal and staffing challenges by several institutions.

The Massachusetts Institute of Technology (MIT) was faced with financial challenges twice in the past decade, and applied lessons learned in the first round to how they addressed the issue the second time. The bursting of the dot-com bubble in 2000 revealed a chronic gap in MIT’s operating budget. In response to this, over the next 7 years, MIT worked to diversify its endowment, and by 2008 had a balanced budget and a surplus for the year. The task force approach they used was successful. But in September 2008, MIT was faced with another financial crisis. Lehman Brothers, the main banker for MIT, went bankrupt. AIG, their insurer, verged on collapse. $80 million held for MIT by Wachovia in the Commonfund was inaccessible. Citibank withdrew from the student loan program. In a short term response to this situation, $50 million in expenses was cut from the 2010 fiscal year budget. But MIT also recognized the need for long term financial planning and decided to use the task force approach again, this time with a longer term perspective, and more transparency, participation, and buy-in. An Institute-wide task force was charged with finding an additional $50 to $100 million in reductions while maintaining commitment to MIT’s mission and community. Nine working groups, addressing administrative, academic, student life, and financial issues, and comprised of 87 faculty, 20 students, and 85 staff, listened to the community and analyzed current processes. Communication with the whole MIT community was handled through a three-tiered Web site with an information hub, an ‘Idea Bank’ open to all members of the MIT community, and wikis. In the first week the Idea Bank had 1,700 unique visitors from 20 countries, and 312 entries, both ideas and comments on the ideas.

University of Wisconsin-Eau Claire, also faced with potential budget cuts, implemented their Program to Evaluate and Enhance Quality, an evidence-based program review process. They wanted each program to be evaluated on its own, not on the basis of its evaluation relative to other programs. To avoid quantitative evaluations in which programs could be ranked and might be competing with each other, they applied a color coded system. Using a self-study approach, programs were reviewed in each of three areas: mission centrality, quality, and cost. Five to nine criteria were developed for review in each of these categories. Rather than a numerical score, programs were given a color for their standing for each criterion, from blue, meaning a low score for one criterion, to red, meaning a high score, with green, yellow, and orange as intermediate scores. The final evaluation of a program was shown by three circles for the three areas, with colored sectors within the circles reflecting the status for each criterion.

In 2009, Cornell was faced with the challenge of responding to an unexpected number of early retirements. Out of about 7,000 administrative staff, 1,300 were eligible for an early retirement option. Given the current economic situation, the intent was to not fill many of the vacant positions. It was expected that about 125 would take advantage of the early retirement option; about 400 acted on it. Cornell integrated its response to this challenge with its most comprehensive strategic planning effort. Senior leaders developed the strategic plan with goals, objectives, and action plans. Mid-level managers are encouraged to develop annual plans with objectives and deliverables aligned to the strategic plan. Within work units, staff are asked to separate work into ‘must do’, ‘should do’, ‘nice to do’, and ‘won’t do’, taking into account the now unfilled positions, and in alignment with the goals and objectives of the plan. Units are then encouraged to make the remaining work processes more efficient, to align remaining position descriptions, and identify related measurable employee goals for the coming year.

Virginia Polytechnic Institute (Virginia Tech) established a ‘talent development’ program to address succession planning, defined by Virginia Tech as preparing internal staff for future workforce challenges and increasing the internal pool of qualified candidates for future open positions. Virginia Tech expects a high retirement rate in the next 5 to 6 years, and developed a listing of who among leadership and classified staff is eligible to retire. At the same time, the Executive Development Institute was designed, a seven month program to develop the next generation of senior leadership. Twenty two mid-level managers and leaders were accepted in the first cohort. The program consists of three two-day live sessions, with distance education between the sessions, a small group case study project assessing a real Virginia Tech issue, and follow-up mentoring.

Many institutions of higher education across the United States are facing financial and staffing challenges. Both immediate and longer term responses may be needed. But to be successful, responses must be tailored to the specific issue, and to the unique culture of each institution.