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as head of philanthropic services for Morgan Stanley, cited
that company’s sale of its Discover Card division in 2007
as a model. “WhenMorgan Stanley started going into the
tank, one of the first questions was whether or not to jettison
Discover Card and allow the company to focus on its core
mission of investment management. For institutions of higher
education the challenge is to be able to define what makes
you the institution that you are, and to sustain those things
while identifying where there are opportunities to evolve
or reprioritize.” (In this context, “reprioritize” seems like a
euphemism for “cut.”) Or, as Terry Meyers, a professor of
English and philosophy at William andMary, put it, “What’s
fascinating to me to watch is what businesses do in this kind
of situation. They sit down and say, what is our core mission?
And that’s what higher education needs to do.”
This points to another reason why it is hard for universities
to respond to economic downturns:There are somany
interests to attend to. Reveley, for example, held public
meetings at William andMary about potential budget cuts,
though he said that, in the end, the tough
decisions must be made from the top down.
Yet, when the chancellor of the Tennessee
university systemproposed, among other
ways of dealing with a 20 percent reduction
in state appropriations, adding more online
teaching and requiring upperclassmen to tutor
underclassmen, the head of the faculty senate
at one Tennessee university described it as a
“radical attack,” and students protested outside
the fall commencement.
“Not many of the tradeoffs are willingly
offered,” Reveley said. “Once we beginmaking those choices,
we almost immediately hear, ‘There has been a reduction in
this, that, or the other thing that is important tome—why are
you doing this?’” In higher education, Hurley said, “there is
a long history of perhaps a compulsiveness about including
everybody.That’s exactly why there isn’t change in higher
education. And that’s where bold leadership comes in.”
Many critics agree with Reveley, and contend that campus
leaders have to lead—especially considering that universities
have defended years of spiraling salaries for presidents by
comparing them to corporate CEOs. “We are in this mixed
model of feeling we have to pay these people like superstars.
Then we wonder, what do we get for it?” said David Breneman,
director of the University of Virginia’s master’s program in
public policy, who studies the economics of higher education.
“If university presidents are truly leaders, they have to
make painful, bold decisions that are going to be unpopular,”
said Richard Vedder, anOhio University economist who also
follows higher education finances. “This is the time they need
to earn the big bucks by showing leadership and cutting costs.”
One way of doing this is to reduce duplication, which
is rampant on university campuses, to hear some managers
talk of it: duplicate e-mail systems in different departments,
duplicate facilities management, duplicate administrative
offices. “These replicative services simply drive up the cost of
our operations,” Golding said. Streamlining them is one way
to cut spending, he said; sharing resources among not only
departments within a university but among universities within
a state or an even broader purchasing consortium is another.
“We refer to this as strategic sourcing, where you get into a
group and go toMicrosoft and say, ‘We’ll guarantee you 80
percent of what we spend, and what’s your best deal?’”
Some schools already do this; others have resisted it.
WhenWilliamGlavin, a onetime Xerox vice chair, became
president of Babson College, he tried to get neighboring
universities to collectively negotiate for lower prices on such
things as health insurance, and tomerge their information-
services departments. “There’s one school in particular where
the president was totally in support of what we were trying
to do,” Glavin said. “And this president couldn’t get her own
subordinates to do it, because it meant that there would have
been fewer of them.”
Now there might have to be fewer of them.The number of
support staff at universities has swelled, from three for every
student in 1976 tomore than six today. In fact, the proportion
of university spending that goes directly toward instruction
has declined over the last ten years, according to the Delta
Project on Postsecondary Education Costs, Productivity and
Accountability, an ongoing foundation-supported initiative
to gather data that can be used to improve the management
of higher education costs. “The explosion in non-teaching
professional staff that has gone on—PR specialists, wellness
coordinators, diversity czars, associate provosts…I expect to
see some major paring in what youmight call the bureaucratic
armies,” said Vedder.
It is demand from students and their families that has
helped drive the rise in the number of those non-faculty
employees and the services they furnish, while also driving
the construction of pricey dorms and fitness centers, food
courts and other amenities. Another factor is the increasingly
influential university rankings, although, said Breneman,
“those just measure wealth.”
Concessions on both fronts might be necessary.The
question now, said Golding, “is not just what we can do in the
sense of streamlining it, but also, quite frankly, inmanaging
expectations.”
Although its operating budget is tight, William and Mary presses on with an ambitious
new building program.
Universities have
joined the line
of bankers and
automakers asking
for money from the
federal government.
Tom Cogill for CrossTalk