colleges & coronavirus - time to be proactive...2020/04/08 · time to be proactive what a...

Colleges & Coronavirus -Time to Be Proactive

What a College Should NOT Do During a Recession

Virtual Discussion Series: Session #1

April 8, 2020 2:00-3:00 PM EST

Supporting Analysis Slides

Paul N. Friga, Ph.D.

www.abc-sights.com

http://www.abc-sights.com/

Proprietary and Confidential 2

Overview

Context• The Coronavirus (COVID-19) is causing significant economic and

societal changes throughout the world• It is likely this will lead to a US and global recession beginning in 2020• Higher education will be forced to dramatically change its academic and

economic models• Change in higher education is generally slow, but this is a unique

opportunity to make overdue changes• The Chronicle of Higher Education is dedicated to leading this

discussion through a series of articles and virtual discussions• ABC Insights has a sole mission of improving the sustainability of

higher education by helping universities become more efficient and effective

• The purpose of this virtual discussion is to begin a dialogue on the new economic reality and recommendations thereof – we know that many of you are dealing with immediate issues on your respective campuses, but we also realize that you need to continue your strategic financial planning

• Address the most common myths organizations believe during recessions

• Present a framework and recommendations for immediate and strategic action on any campus

• Open the conversation with university leaders across the world to share ideas as we deal with this crisis

Specific Objectives


Colleges & Coronavirus, Time to Be Proactive: Virtual Discussions

What a College Should NOT Do During A

Recession

We will offer a framework on myths to avoid doing during a recession and how

universities should be planning for strategic changes on their campus.

Lynn Pasquerella, Ph.D.President, AAC&U (Association of American Colleges & Universities)

Preparing Your Budget With Coronavirus in

Mind

We will explore ways to develop a reasonable budget emphasizing suggestions on how to strategically modify academic and

administrative investments.

Laura E. HubbardVice President for Finance and Administration, University at Buffalo

Lessons Learned For Higher Education From

the Great Recession

We will review how the last major recession in the US affected Higher

Education, how universities responded and tips for how we may want to prepare

for today's crisis.

Michael Drake, M.D.President, The Ohio State University (led UC Irvine through the last recession)

Optimizing Academic Programming in the Post

Coronavirus Era

Explore the right mix of academic programs and how colleges will need to examine both

student and job-market needs, while considering the latest information on the

ongoing health emergency.

Peter StokesManaging Director, Huron Education Strategy & Operations (S&O) Group

Scott CarlsonSenior Writer, Chronicle of Higher Education

Paul Friga, Ph.D.Clinical Assoc. Prof. UNC CH, Co-founder of ABC Insights

Each Session Hosted By:

March 26 2:00-3:00pm EST April 8 2:00-3:00pm EST April 22 2:00-3:00pm EST May 6 2:00-3:00pm EST


Be cautious of the generic “recession mindset”

Recession Tendencies Application to Higher Education

Source: “The Crisis: Timing Strategic Moves.” The McKinsey Quarterly. April 2009.; “Learning to Love Recessions.” The McKinsey Quarterly. Special Edition 2002.; “Strategic Planning: Three tips for 2009.” The McKinsey Quarterly. April 2009; “Companies get into deal mode.” USA TODAY. April 21 2009.; “How to Market in a Downturn.” Harvard Business Review. April 2009.; “Managing IT in a downturn: Beyond cost cutting.” The McKinsey Quarterly. September 2008.; “R&D in the downturn: McKinsey Global Survey Results.” The McKinsey Quarterly. April 2009.; Source: “The Layoff.” Harvard Business Review. March 2009.; “R&D in the downturn: McKinsey Global Survey Results.” The McKinsey Quarterly. April 2009.;

Higher Ed Recommendations

• Think long-term, not short-term• Make long overdue changes to educational and economic model • Seek ways to further differentiate and expand value-add

• Cuts should be made in line with strategic positioning and priorities• Use data in decision-making over anecdotal perceptions• Make bigger cuts in certain areas to strategically invest in key areas

• Care is required in employee evaluations given education’s role as a key employer• It takes 16-18 months to realize cost benefits from layoffs• Focus should be on eliminating non-critical positions, especially transactional types

• Decreasing resources on important value areas such as academics is risky• This could be a great time to invest in key faculty for growing program needs• Again, prioritizing academic areas over other areas is an important step

• Benchmarking IT spend against comparable institutions is a good first step• Note that higher ranked universities have higher IT needs• Investments in IT can increase productivity and overall efficiencies

We should implement across-the-board cuts

Our work goal should be to just survive

Significant layoffs are necessary

Cutting R&D is a good idea

Decrease investment in IT

Cut in the right places

Seek differentiation

Restructure personnel

Invest in core mission

Adopt continuous improvement


Presidents’ plans for handling the crisis

75.2% 72.1%

54.7%

39.9%

13.0%

Hunker Down Layoff Staff Across theBoard Cuts

Cut R&D Cut IT

Future Considerations in Dealing With COVID-19• "I worry about cuts in state and

county funding. … I worry that I won't have the workforce resources to help lead the economic recovery."

• "Beyond the well-being of our students and staff, which comes first, I am worried about the lack of sufficient relief for higher education from state and federal governments."

• "Sharply declining revenue due to loss of paying students and a new ‘free college’ program in our state."

• "All income streams are under stress — tuition, development, endowment."

Source: ABC Insights & rpk GROUP Survey of AAC&U Presidents' Trust; April 1, 2020; n=142


Recommendations to not only survive but thrive through the recession – “Seek differentiation”






Recession Tendencies








One of the most differentiated university mission statements is Arizona State University

Mission StatementASU is a comprehensive public research

university, measured not by whom it excludes, but by whom it includes and how they succeed; advancing research

and discovery of public value; and assuming fundamental responsibility for the economic, social, cultural and overall

health of the communities it serves.

The number of ASU students more than doubled since 2003 from 57,000 to

over 119,000 in 2019


Recommendations to not only survive but thrive through the recession – “Cut in the right places”














The starting point is to better understand your spend

Source: ABC Insights Example: Temple University


And then compare efficiency to other universities

SAM Spend as a % of Total Labor Spend


Benchmark 1

Temple University

Benchmark 2

Benchmark 3

Benchmark 4

Benchmark 5

Benchmark 6

Benchmark 7

Benchmark 8

Benchmark 9

Benchmark 10

Benchmark 11


It is also important to track results over time

32.3% 31.5% 31.0% 31.4% 31.2%

0%

10%

20%

30%

40%

FY15 FY16 FY17 FY18 FY19

Adm

inis

trat

ive

Inte

nsity

Mea

sure

(AIM

)SAM Spend as a % of Total Labor Spend (FY15-FY19)

AIM Linear (AIM)



Recommendations to not only survive but thrive through the recession – “Restructure personnel”














Start with a clear understanding of your HR Investment

FTEs GrowthFTEs Spend

274

309

FY14 FY17

17

22

FY14 FY17

+35

+12.5%

+5

+29%

48

87173

$3

$7$12 $22M

Decentralized

Shared Services

Centralized

Decentralized

Shared Services

Centralized

309

Spend (millions)

Source: ABC Insights and CUPA-HR Presentation, October 21, 2019 Example: UNC Chapel Hill


Then compare to other universities for insights

2.5

1.6

UNC-CH Peers

More FTEsNormalized per 100 employees and students

More SpendNormalized percent of total labor spend

1.7%

1.4%

UNC-CH Peers

Human Resources Investment

Example: UNC Chapel HillSource: ABC Insights and CUPA-HR Presentation, October 21, 2019


Finally, look to grow the strategic percentage of employees

63

29

40

Transactional Supervisory Strategic

Number of Unique Titles

74

2519


Number of FTEs (Total=118)

4.1

2

2.9


Salary in Millions(Total=9M)

Source: ABC Insights and CUPA-HR Presentation, October 21, 2019 Example: UNC Chapel Hill


Recommendations to not only survive but thrive through the recession – “Invest in core mission”














UNC System set priorities for all 16 universities but allows for flexibility and differentiation in mission

Source: https://www.northcarolina.edu/strategic-planning; ABC Insights SHEEO Presentation August 7, 2019


The strategic priorities translate to specific objectives

ACCESS

AFFORDABILITY & EFFICIENCY

STUDENT SUCCESS

ECONOMIC IMPACT & COMMUNITY ENGAGEMENT

Increase Low-Income Enrollment

Increase Completions by Low-Income Students

Increase Rural Enrollment

Increase Completions by Rural Students

Improve Transition from K-12 to College

EXCELLENT & DIVERSE INSTITUTIONSIncrease 5-Year Graduation Rate

Increase Undergraduate Degree Efficiency

Close Achievement Gaps

Implement a Survey of Current Students and Alumni

Increase Critical Workforce Credentials

Increase Research Productivity

Increase Investment in Strengthening North Carolina Communities

Commit to Affordable Tuition

Increase Operational and Financial Flexibility

Identify Academic ‘Areas of Distinction’

Focus on Human Capital



Each university has unique goals based upon mission – UNC CH example for priority of “Increase Low Income Enrollment”

UNC System Dashboard


UNC Chapel Hill Dashboard




UNC Chapel Hill differentiates by “innovating for public good” –leveraging its unique position as the first public university

Of the public, for the public. We will:• Eliminate all barriers to a great education.• Bring expertise to bear for the benefit of North

Carolina and beyond.• Work for democracy: develop citizen-leaders and

encourage informed public discussion

Innovation made fundamental. We will:• Value and prioritize foundational research and

creative practice• Meet the imperative for learning that is personalized,

experiential, collaborative, and data-literate. • Translate research into professional, commercial, and

societal uses.• Adapt to evolving workforce and student needs.

The Pillars

Source: https://carolinanext.unc.edu/

With lux, libertas – light and liberty – as its founding principles, the University has charted a bold course of leading change to improve society and to help solve the world’s greatest problems.

Carolina Next is framed around eight strategic initiatives. The strategic initiatives represent the core areas of focus across the University. We will make targeted investments that enable our community to: (1) Build Our CommunityTogether, (2) Strengthen Student Success, (3) Enable Career Development, (4) Discover, (5) Promote Democracy, (6) Serve to Benefit Society, (7) Globalize and (8) Optimize Operations. These strategic initiatives are elaborated on later in the document.


A description of the differentiation priorities in the UNC system

University Distinct Area 1 Distinct Area 2Appalachian State University Envisioning a Just and Sustainable Future Global Engagement: Education Abroad

East Carolina University Cultural Champion Social Mobility

Elizabeth City State University Aviation Science Program Student Success

Fayetteville State University Facilitating Higher Education Attainment by Military-Affiliated Students High Quality and Affordable Online Education

North Carolina A&T University Minority Engineer Production COBE Accountants Production

North Carolina Central University Jazz Studies Intellectual Property Legal Education

North Carolina School of Science and Math Equity of Access for High School Students Statewide Increasing Participation in Research

North Carolina State University Lab to Market Innovation – Partnerships with the Private Sector Engineering and Agriculture, Our Land-Grant Foundation

University of North Carolina at Asheville High Impact Practices in Liberal Arts Education Co-curricular Learning Experiences

University of North Carolina at Chapel Hill Creating Scientists: Learning by Connecting, Doing, and Making Undergraduate Business Education

University of North Carolina at Charlotte Data Science Initiative Community Engagement

University of North Carolina at Greensboro Health and Wellness Visual and Performing Arts

University of North Carolina at Pembroke Regional Health Regional Economic Development

University of North Carolina at Wilmington UNCW and the Marine Sciences New Academic Programs Serving Regional Needs

University of North Carolina School of the Arts Expand and Enhance Filmmaking Programs Increase AP Participation

Western Carolina University Cultural and Environmental Immersion Service and Outreach

Winston-Salem State University Signature Liberal Education Experience Signature Graduate and Professional Programs



UNC CH example of investment and growth in research

578 580 593 611

678716

803 788 767 778 793 796847

898 883940

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

UNC-CH Research AwardsFY 2004 - 2019

Source: https://research.unc.edu/about/facts-rankings/funding/


Recommendations to not only survive but thrive through the recession – “Adopt continuous improvement”














Definition of Continuous Improvement

Continuous Improvement“Continuous improvement is a gradual never-ending change which is … focused on increasing the effectiveness and/or efficiency of an organisation to fulfill its policy and objectives. It is not limited to quality initiatives. Improvement in business strategy, business results, customer, employee and supplier relationships can be subject to continual improvement. Put simply, it means ‘getting better all the time.”

Institute of Quality Assurance

PDACKaizen

Six SigmaLeanAgile

Source: ABC Insights NACUBO Budget and Planning Forum Presentation September 17, 2019


Recommendations to do it well

1. Make it easy for faculty, administration and staff to suggest ideas for improvement

2. Opportunities for improvement are evaluated and action plans developed

3. Ensure forward progress with active alerts and notifications

4. Create a repository of institutional knowledge and capture best practices

5. Simplify assessing the impact of implemented improvements

6. Broadcast success

7. Give leaders insight into the health of improvement culture across the entire institution

Source: ABC Insights NACUBO Budget and Planning Forum Presentation September 17, 2019


Florida State Example – over $200M that was reinvested in academic faculty and programs and led to rise in rankings

3.5232.08

71.37

9.36

32.75

41.23

45.32

Jan-15 Jan-16 Jan-17 Jan-18

FSU Efficiency Savings ($ Millions)

Recurring Savings Series 2

Total Cost Savings > $235M Since July 2014

FSU received nine of the twelve 2019 Florida TaxWatch/Prudential Productivity Awards that were distributed to universities in the State University System

July 2018 Efficiency Savings Highlights

Procurement Savings – Cooperatives/Consortiums $17.6M

Procurement Savings – Other $7.8M

FSU Take 15 Initiative $7.4M

Procurement Savings – Shared Initiatives $5.1M

Shared Services Energy Management Program $2.3M

Bookstore Contract $1.2M

Enterprise Software Licensing Agreements $1.1M

Total New Savings $45.32M

Source: ABC Insights NACUBO Budget and Planning Forum Presentation September 17, 2019 Example: Florida State University


Recommendations to not only survive but thrive through the recession – “Make strategic moves”













Appendix


We formed ABC Insights to help higher education

Our Vision: Become the trusted partner and thought leader for analytics, benchmarking, and insights in higher ed

Our Mission: Improve sustainability of higher education by helping universities become more efficient and effective

Source: ABC Insights – www.abc-insights.com

http://www.abc-insights.com/


Join our growing number of universities in North America


Higher education needs to dramatically increase its efficiency without sacrificing quality

Efficiency Effectiveness

Grow Resources

Increase Academic Program Returns

Optimize Administrative Spend

Improve Faculty Productivity

Increase Employee Performance

Drive Student Success

ABC Insights ROI = More efficient and effective universities will result in higher returns for investment




Key areas for increasing efficiency of a university from the ABC Insights ROI framework

Grow ResourcesIncrease enrollments and revenue

Optimize Administrative SpendAssess level of investment vs strategy


Rationalize academic offerings based upon demand

Pote

ntia

l Gro

wth

Investment Required

Mapping: Sources of RevenueSize of bubble: Current Revenue Level

Mapping: Activities and Sub-ActivitiesSize of bubble: Level of FTEs

Mapping: Schools and MajorsSize of bubble: Student Outcomes

Pursue Sequence

Consider IgnoreAnn

ual S

pend

Comparable Efficiency Percentile

Reimagine Showcase

Assess Maintain

Ann

ual N

et

Con

trib

utio

nMarket Demand

Reimagine Showcase

Assess Maintain

High

Low

Low High

High

Low

Low High

High

Low

Low High




Analyze administrative human capital investment by spend and FTE as compared to others

Chart Key

Optimize Administrative SpendAssess level of investment vs efficiency

Size of Bubble: Level of Admin. FTEs

FacilitiesStudent ServicesInformation TechnologyGeneral AdministrationFinanceCommunicationsDevelopmentHuman ResourcesResearch Administration

0

10

20

30

40

50

60

70

0.50.60.70.80.91.01.11.21.31.41.5

Low High

High

Low

Ann

ual S

pend

$M

Comparable Efficiency Percent

ABC Insights ROI Framework Administrative Activity Analysis –University of XYZ


Conduct the same analysis at the school level

Chart Key

Optimize Administrative SpendAssess level of investment vs efficiency

Size of Bubble: Level of Admin. FTEs

AgricultureArts and SciencesBusinessDentistryEducationEngineeringJournalismLawMedical

Low High

High

Low

ABC Insights ROI Framework School Administrative Spend Analysis – University of XYZ

0

10

20

30

40

50

60

70

0.50.60.70.80.91.01.11.21.31.41.5

Ann

ual S

pend

$M

Comparable Efficiency Percent


Explore and prioritize administrative efficiency initiatives per the ABC Insights ROI Framework

Chart Key

Optimize Administrative SpendAssess level of investment vs strategy

Size of Bubble: Level of FTEs

Consolidate PurchasingCut StaffRe-engineer ProcessesOutsourceCentralize/Shared ServicesModernize TechnologiesMerge Multiple LocationsIncrease Spans of ControlDecrease Energy Use

0

1

2

3

4

5

6

7

8

9

10

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

Low High

High

Low

Pote

ntia

l Im

pact

Level of Effort

ABC Insights ROI Framework Analysis Of Potential Initiatives – University of XYZ


Explore and prioritize academic spend strategic initiatives per the ABC Insights ROI Framework


Rationalize academic offerings based upon demand

Chart Key

Size of Bubble: Current Revenue Level

Sunset ProgramsGrow Existing ProgramsLaunch New ProgramsIncrease Teaching LoadsHire More PT FacultyHire More NTT FacultyFreeze New Faculty HiresDecrease # of FacultyIncrease Student Retention

0

1

2

3

4

5

6

7

8

9

10

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

Low High

High

Low

Pote

ntia

l Im

pact

Level of Effort



Explore and prioritize resource growth initiatives per the ABC Insights ROI Framework

Chart Key

Size of Bubble: Student Outcomes

Grow ResourcesIncrease enrollments and revenue

Launch New Development CampaignDetermine Unique Positioning Invest in Advertising CampaignsCollaborate with Other UniversitiesPursue PPPs (facilities, energy, etc.)Launch Medical ServicesDevelop More Executive EducationIncrease Online Program OfferingsSecure New Debt OfferingsGrow Research PortfolioSell Excess University Assets (land, etc.)

0

1

2

3

4

5

6

7

8

9

10

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

Low High

High

Low

Pote

ntia

l Im

pact

Level of Effort


colleges & coronavirus - time to be proactive...2020/04/08 · time to be proactive what a...

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