Sunday, June 24, 2012


The original topic for this edition of SQUINTS was review of the proposals from the first (President Truman’s) presidential commission on higher education, circa 1947.  It seemed a relevant starting point for assessment of U.S. higher education, given that most of its recommendations have yet to find their way into collegiate reform by 2012.

Sixty-five years seems a rather long gestation period, even for the measured character of leadership of American higher education.  To add some angst to the picture, family and college student debt from the unchecked escalation of collegiate costs, coupled with states slashing public higher education support for decades, now exceeds one trillion dollars, and counting. 

Over the last several weeks the University of Virginia, famously founded by Thomas Jefferson, has been racked by controversy, stemming from the improperly executed action of a handful of board plotters to fire its president along with a ton of obfuscation of the reasons. 

This week, in a courageous, strategic and brilliantly conceived effort, not, to address the debt issue, Indiana University’s trustees voted to solve the problem by approving an educational program to increase student financial literacy.

The same board of IU geniuses also approved a new “school of philanthropy.”  Not articulated was the mission; there is likely a need for academic work on philanthropic process, on not-for-profit (NFP) and non-governmental organizations (NGO), and on their functions.  However, that work and research would appear better executed within existing collegiate work on organizations, finance, administration and marketing, than creation of still another school bureaucratic and overhead structure. This appears to be a constant symptom of the growth syndrome driving many universities, unchecked expansion along with overhead rather than creative use of organizational thinking to reduce burden.  Whatever, let’s hope a vaccine can be found for the condition.

The College Debt Issue

In a few months the student debt issue has escalated, in Congressional partisan squabbling about how to pay for keeping the interest rates on that debt (the principal now exceeding one trillion dollars) from doubling, and has finally started to penetrate the sheltered environs of university boards of trustees or visitors.

Yes, the business of higher education is allegedly education, when it can be interspersed with recreation and sports; so what’s the beef with IU’s quest for financial literacy for its students?  Aside from that educational effort being belated by a few decades, perhaps the question comes from the script of an old TV ad for fast food – “where’s the beef?”  Metaphorically, where is the beef, i.e., where is a strategic plan for higher education reform, for increasing classroom productivity, for cleaning the bureaucratic stables, for seeking sustainable cost reductions, and thereby reduction of tuition?  The notion of better educating students (and their families) to fully understand how they're being gored by a system out of control, while failing to address causes, stretches credibility?

Successive U.S. president’s commissions on higher education subsequent to Mr. Truman’s have made numerous suggestions for reducing the cost, and improving the productivity of U.S. higher education; virtually every proposal over a half century has been rejected by institutions increasingly independent of their original funding, in favor of growth as a goal and expanding functions well beyond the education mission.  That thrust in turn has in part at least been driven by the complexity of a university’s stake holders:  Faculty who can see themselves as independent contractors rather than employees, bargaining for higher salaries; alumni who respond to sports and glitz but shun educational achievement; expanded research roles that require far greater investment; faculty refusals to regularly reassess their curricula as a reality check; Federal mandates; management that frequently cannot decide just what its role is or aspires to emulate our corporate world and its salaries.

Generically, cost reduction in any complex organization also has a long history of strife – the other guy’s costs are always the ones to be reduced, resulting inevitably in conflict and gridlock in any system that cannot be operated traditionally based on command and control.  Universities, in existence for almost a millennium, have been a more complex organizational system than “businesses,” even our largest, and to succeed in their primary missions and venues have been managed differently than businesses.  Yet, the process of cost reduction itself can be highly disciplined and governed by strategic goals.  The writer lived one admittedly simple version of the challenge, but that had to be addressed in quick time.

The first company managed had a customer mix consisting of 80 percent businesses termed mom & pop operations, and 20 percent national chains.  The former bought small quantities of equipment and paid relatively higher average prices; the latter bought on annual contracts and paid far lower prices.   In the space of a few years the industry experienced a major shakeout, with national chains acquiring the smaller firms at an unprecedented rate.  Within two years, our firm’s mix of customers went from the prior 20/80 to 80/20 chain dominance.  With that shift, the average dollar revenue per unit of the equipment sold was virtually cut in half, though the unit volume increased.  Left untouched, the scenario had the potential of abruptly cutting the firm’s profits by more than 50 percent.  As a division of a Fortune 50 company, one’s tenure promised to be short-lived indeed if that trajectory was unchecked.

A solution, with the full engagement of a work force on the same page, was major cost reduction of the products’ and distribution costs via creative changes that maintained product quality and service delivery.  Essentially, every consequential line item on the product’s bill-of-materials was methodically and creatively rethought; necessary, materials, process, made versus vended, just-in-time sourcing, inspection versus process control, packaging, post-sale service and upgrades?  In a period of two years, as the average revenue per unit dropped, the percent (not absolute dollars) product margin was retained, while product appearance and function were actually enhanced.  Coupled with greater physical volume provided by the chains, the company’s dollar profits actually materially increased.  Critically, to achieve such cost change was a consuming full-court press in double-time; there is no such thing as a free lunch.

The questions are:  Are our universities objectively up to or can they even internalize that level of focus and effort; is the university model of organization compatible with that form of focused effort; is there, metaphorically, a higher education “bill-of-materials” that can addressed as in the simple example offered; paradoxically, though it is looked to for intellectual leadership, can higher education actually break with traditions and inertia to develop major creative solutions to improving learning and at lower cost?  I believe there are affirmative answers to those questions, but not without material change in higher education beliefs, a willingness to seek creativity, and accept some risks of demanding higher performance from both their student and faculty populations.

Where Risk Resides

The last few weeks have witnessed the unfolding, perhaps unraveling is more apropos, of a higher education soap opera, that if it wasn’t indicative of what is coming at higher education, would have offered enough intrigue and slapstick to offset summer TV reruns:  The sorry spectacle was of ignorant and secret plotting by a small cabal of the University of Virginia’s board of visitors (along with allegedly the support or instigation of a billionaire alumnus of UVA) to oust Dr. Teresa Sullivan, its president of just two years.  The basis of the coup was that Dr. Sullivan had allegedly not moved with enough aggression in two years in addressing escalating costs or alternative pedagogical methods applicable to higher education.

Below are seven citations that tell the University of Virginia story to date.  They will not be replayed here, but they are both an object lesson for would-be outside reformers, as well a warning bell that change in higher education is even more complex than in public K-12.  For a good example of how not to reform U.S. higher education, and worth your attention:

The UVA example has four major thrusts, three of which are generalized.  The issue particular to UVA is the failure of its board of visitors and the principal instigator of the coup to reflect any transparency or any sense of good management.  The UVA board’s methods violated literally every caveat of contemporary management of any organization regardless of its categorization.  Therefore, one general issue is whether reform of higher education, ala K-12, should take the course of corporate attacks on the establishment to force change, a risk of quickly becoming its motif?

The other issues that can be generalized to this discussion are what are viable and sustainable education cost reductions, what pedagogies and which rubrics work for improving learning productivity, and whether the processes to achieve either and the timetables should be set by external stake holders or set within the institutions?

The Gut U. S. Higher Education Challenges

For better or worse, the University of Virginia has become the camel’s nose in the Arab’s tent, to put the least onerous spin on that brouhaha.  That nose is, should corporate reform, and its conceptions of what parts and at what rates higher education processes can be changed, be the modality for reform of our colleges and universities?

The counter is, U.S. institutions of higher education have been in denial of need for change, along with public K-12 education, for most of the last half century, and some majority of their number has abandoned higher education first principles in favor of an expansionary, corporate form of organizational logic and goal setting.  The issue is that reform of higher education is far more complex than the same mission for K-12.

Reform challenges:

The complexity of the core institution; there is far more complexity in the operations, and diversity of forms of collegiate and university process.  A proposition, there is more disparity between our best collegiate work – the ivies and upscale techs – and our worst – too many of our so-called community colleges, high school 2 – than the best versus the bottom quartile of public K-12.

Most undergraduate higher education curricula are less obsolete than their public K-12 counterparts, but selectively fall short of being contemporary expressions of their genre’s science and art.  The sciences including neural biology fare best, followed by medicine, law and the humanities.  Schools of education in their present state of knowledge should likely be put out of their misery, or declared startups, and political science seems to have gone underground. 

Most of the nation’s overripe, overfunded, and overrated B-schools have never in a half century fully melded basic disciplines with business theory, moving from fad to fad, nor ever effectively reflected business practice at a high level and its ethical demands.  Current practices in too many corporations massaging greed like a mantra indicate the U.S. has reaped in the moral products of its B-schools what it sowed, and there has been only one major rethinking of its disciplines and curricula since WWII. That in turn had to be pounded into the B-schools by the Carnegie and Ford Foundations.  B-schools in other nations are now besting this American higher education creation.

The cost of four years of U.S. higher education in general exceeds the cost of 13 years of prior formal education process, and if current research is believed, those four years produce very little change in learning.  Paradoxically, public K-12 practices classroom instructional dogma with marginal knowledge content, while higher education steeps itself in assumed knowledge virtually thoughtless about how to optimally explicate it in the classroom.

U.S. higher education reflects an interesting paradox; its products – the alumni – exhibit remarkable, even exaggerated loyalty to places where they did baccalaureate work; but if truth be told, most of those institutions view most of those alums as semi-educated and with mild contempt, patronizing their institutional interests to solicit contributions and procure endowments.  In recent years, the better-managed and most contemporary divisions of most colleges and universities have been their alumni offices, the rainmakers.

Higher education faculties excepting the high end of the breed have become a fairly arrogant lot, assuming they can’t be replaced, willing to threaten administrations with relocation to extract higher salaries, many not perceiving themselves as employees, and possessing in general less loyalty to their institutions than many hourly employees exhibit to companies where stably employed.  Collegiate faculties have resisted for over a half century studying and learning how to teach.

Sports are exploited in public K-12 in a perverse fashion to smoke parents and divert their attention from education, but the collegiate sports mess beggars that misapplication, increasingly being the collegiate tail wagging the collegiate dog, generally corrupting it.

The former corruption is only matched or exceeded by the chase of endowment dollars from successful alumni with egos that exceed even their balance sheets.  This form of funding, hyped unceasingly, has become a form of university and academic foundation corruption that rivals the political super pac.  More dangerous, that link with donors has now fostered the “Gates effect,” breeding wealthy advocates of self-styled accelerated collegiate change but lacking the wits to even understand the system being attacked.

There are undoubtedly competent academic managers, but little agreement about how they should be prepared for the assignment or what those attributes are.  Increasingly, where the thirst for dollars has been stoked, many deans and program leaders have been selected because they are willing to roll the dice on their disciplines or are con artists rather than academic leaders.  In one article cited above, UVA’s Dr. Sullivan is described as the opposite, doing precisely the things generally associated with successful organizational management; somewhat bizarre then, being ousted for doing what good managers are supposed to do.

In another article cited above, higher education’s increasingly Achilles’ Heel, no pun intended, is the lack of preparedness of trustees and visitors to be the needed collegiate oversight, many appointed for purely political reasons rather than competence to materially effect collegiate strategic choices; e.g., the case of UVA, or IU, or Miami University another proximate example of the endowment addiction and misdirected spending, or practically every state institution of U.S. higher education.  The weakness doubles down on the tragedy usually represented by incompetent or self-interested K-12 school boards.

Lastly, the saying should be tattooed onto every fledgling trustee or visitor given the responsibility of high-level collegiate oversight – COLLEGES AND UNIVERSITIES ARE NOT BUSINESSES, NOR SIMPLY CREATURES OF TRADITIONAL MARKETS.  This may be hard for many of our so-called corporate reformers to grasp, even those who manifest good business management instincts and skills; it will never be grasped by many contemporarily who have substituted simplistic political ideologies about markets for awareness in 2012, just 76 years short of a millennium since the formation of the university concept.*

On the Cusp?

Political dysfunction in the U.S. has now forced onto our K-12 schools a reform agenda that lacks intellect, even common sense, and now is at the cusp of colliding with public higher education in the same fashion.  Both attacks were earned and are deserved by the inattention and hubris of their respective administrative universes in addressing their respective purposes and means, but the repercussions for American progress are dismal.  Higher education, because its institutions can’t easily get lost in a crowd of 100K entities all invoking local control, may be more vulnerable to misdirected change than public K-12.

The above views will elicit squeals of protest, but they come closer to the challenge of U.S. academic progress than the naïve assessments issuing from those institutions.  If there is any counterpoint, it is ironically that our colleges and universities are generally being guided by competent resources, who still command enough of the confidence of most of their stake holders to avoid the "reform" confrontations of public K-12. They could deflect externally dictated alleged reform long enough to launch the needed change processes from within.

Are they strategically smart enough, with the courage to use the opportunity?  Good question.

Footnote:  UVA's governing Board of Visitors, in an afternoon session on June 26, unanimously voted to reinstate Dr. Teresa Sullivan as President of the University of Virginia.  It remains to be seen whether on July 1 Virginia's Governor will reappoint to that Board its present rector, Helen Dragas, the alleged architect of the coup to oust Sullivan with something less than due process even in the corporate world.  Ms Dragas, a graduate of UVA's Darden graduate B-school, apparently took little awareness of managerial excellence away from that division, also alleged to be a focal point of the ouster attempt.

The issue, whether our nation's B-schools are currently the right source of a template for higher education reform, was briefly addressed earlier in this post.  Reaffirming the sentiments, our B-schools first need to clean up their own act before exporting present dogma to our universities as a whole. Clearly, the present cadre of alleged corporate-based reformers, and the naiveté they represent, should not be calling out either higher education's reform's strategies -- "dynamic" slogan or not -- or its tactics without being taken "back to school."

*The concept of the university is generally traced to the formation of the University of Bologna (Italy) in 1088.  Subsequently, the universities of Paris, Oxford and Cambridge were formed.  Harvard, for example, traces its founding to 1636.  Our public K-12 schools by contrast are mere toddlers.

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