Taking Charge — Episode 2
While George continued his sleuthing, Marie focused on building relationships across campus with faculty, staff, students, and alumni, as well as each member of the Board of Trustees. It was a lot of work, leaving her exhausted every evening as she retreated to the President’s House.
She tried to stay connected professionally with her colleagues focused on decision making under risk. She simply could not do it. This was frustrating until George suggested that he could help her by reading all new publications each day and providing her a summary of the insights she could have gained had she read these publications.
This worked amazingly well. She would review the Insight Reports that George generated, perhaps skim one or two of the original documents, and email researchers, many of whom she knew, but not all, with praise, criticism, and suggestions. She religiously devoted one hour per day to this. It was a saving grace for her feeling connected to her intellectual world.
The financial crisis about which George had warned her suddenly became real. Brad McCarthy and Mary Romano had become great allies, but the process of fixing things had uncovered some significant problems. The four of them met to discuss their findings, three of them around Marie’s conference table and George appearing Skype-like on a laptop.
Brad observed, “George sure looks a lot like the actor Spencer Tracy.”
“That is Spencer Tracy!” Marie responded. “He is one of George’s favorite actors.”
“Spencer is much more attractive than me,” George interjected.
“Are you always the same actor?” Mary asked, glancing at Brad.
“Yes, that keeps it simple.”
“So, let’s review what we have found,” Marie said, bringing the group to the task.
“The basic problem is with how revenue and costs are counted,” Mary opened.
“Is it an IT problem with incompatibilities among systems?”
“Well, that is a factor, but not the cause,” Brad added.
“Revenue is estimated using full tuition prices, which almost nobody pays. The discount is factored in, but not until later in the year. So, after a few months, a big chunk of revenue disappears.”
Mary continued, “Cost projections are based on full-time salaries, but many faculty members earn extra compensation, which is paid after each semester.”
“Why is extra compensation so common?” Marie asked.
“We are in a State with high costs of living and our salaries are not adequate. Consequently, faculty members are constantly scurrying to find more income.”
“Why not just raise salaries?”
“Extra compensation is contingent on enrollments. If classes don’t fill, the costs for teaching them are not incurred.”
“Seems like piece work.”
“Sure, but we would never call it that. Faculty members would find that demeaning.”
“I imagine that eliminating the possibility of extra compensation would be very unpopular, perhaps cause a rebellion,” George offers.
“Forgetting that option for the moment, the immediate problem is assuring that revenue and cost projections are realistic,” Marie concludes.
“Mary and I can provide you a spreadsheet tool that adjusts projections appropriately so you will have better numbers,” Brad offers.
“That is a good near-term solution, but we really need everybody to have better numbers.”
“Your near-term problem,” George interjects, “is that your projected surplus is, in reality, a significant deficit.”
“I would rather know that now than six months from now.”
“You need to focus on what you can do to avoid the deficit.”
“Well, our only choices are increasing revenue and/or decreasing costs.”
“What if we lowered tuition while also decreasing the discount in ways that actually increased revenue?” George suggested.
“Decreasing tuition would be a gutsy move,” Marie observed.
“Costs could be reduced by slowing hiring to replace retiring and otherwise departing faculty and staff members.”
“We could package that as an initiative to improve hiring criteria to upgrade the quality of faculty and staff. Higher quality folks are less likely to accept offers, so hiring would slow,” George suggested.
“So, we announce two initiatives that will be appealing, but at the same time get us headed into a better financial situation,” Marie concludes.
Brad and Mary depart with these marching orders. George and Marie continue a bit longer.
“This is harder than I expected, George.”
“These kind of things happen everywhere. You were insulated from them as a department chair. Deans encountered them more often. For Provosts, this is everyday life.”
“Why are things so messy?”
“Few academic institutions were really designed. They just emerged over long periods of time. Things happened and band-aids were applied. Times change and the old quick fixes no longer work.”
“Let’s find those quick fixes at risk.”
“Much easier said than done.”
“Good night, George or Spencer.”
The laptop screen went to black.
