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Setting the Context:Prioritization at Lehman College

Kick-Off Meeting March 12, 2014Robert C. Dickeson

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Lehman

College

EXTERNAL PRESSURES

ECONOMIC STORMS

IRON LAWS OF DEMOGRAPHICS

INCREASED COMPETITION

DEMAND FOR QUALITY

PACE OF TECHNOLOGICAL

CHANGE

Why Do We Need to Set Priorities and Reallocate Resources?

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10% - Selective Institutions – relatively unscathed

10% - Market-funded institutions – growing rapidly

80% - Institutions at Risk:◦ Massive, structural budget cuts◦ Legacy personnel issues◦ Deteriorating physical plants◦ Declines in gift income◦ Inadequate endowments◦ Unsustainable discounting

Institutions at Systemic Risk

0

10

20

30

40

50

60

70

80

18.7 Million

Selective

At-Risk

Market

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Net Tuition Revenues Continue Down Weak Economy Affects Families’

Willingness and Ability to Pay for Higher Education

Federal Budget Pressures on Financial Aid

Rapid Rise of Open Online Courses Pressures to Invest in:

◦ Capital◦ Information Systems◦ Faculty Compensation◦ Program Renewal

Moody’s 2014 Higher Education Outlook

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Not affordable for everyone who needs it (77%)

It is very easy to find information on financial assistance (16%)

Qualifications of faculty are important to considering quality (75%)

Percentage of graduates who are able to get a good job is a sign of quality (68%)

Institutions need to change to better serve the needs of today’s students (89%)

Public Opinion on Higher Education: Gallup/Lumina, 2014

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Three Reports in the Last Two Years:

What Will They Learn? (ACTA) – Decries the malaise in the core – lack of rigor in General Education requirements. (Lehman a “C” – 3 of 7 areas)

Academically Adrift: Limited Learning on College Campuses (Arum and Roksa) – More than a third of college seniors were no better at writing and reasoning than at their first semester of college.

Degree Qualifications Profile (Lumina) – Identifies five spheres of learning, based in part on the Bologna Process in Europe.

Demand for Quality

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Students coming to campus with heightened expectations for advanced technology

New, technology-driven delivery systems, academic and non-academic

Technology and relationships, including pervasive use of social networking

Students who learn online tripled in a decade (from 9.6% to 29.3% )

Pace of Technological Change

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1987: 68.8 percent

2012: 48.5 percent

CHANGE: -20.3 points

Lehman Budget: Share from State

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Static tuition levels comingUnfavorable demographicsRe-accreditation in 2017-18Stretched resourcesNeed to reinvest in our future

Internal Realities

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More tuition and fees? More gifts & grants? More auxiliary income? More endowment income? More federal or state appropriations? More licensing revenue?

◦ Query: How much was left on your budget cutting-room floor last year?

Where Will the Resources Come From?

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…IS REALLOCATION OF EXISTING RESOURCES

THE MOST LIKELY SOURCE FOR NEEDED RESOURCES…

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Academic Programs are the heart of the institution and drive costs for the entire campus

Academic Programs have been permitted to grow without regard to their relative worth

Most campuses are striving to be all things to all people, rather than focusing

The Case for Prioritization

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Growing incongruence between programs and resources to mount them with quality

Traditional approaches (like across-the-board cuts) tend to mediocrity for all programs

Reallocation is necessary and requires responsible prioritization

The Case for Prioritization (Cont’d)

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Top Reasons Institutions Have Prioritized: 1. Balance the budget (2-10%) 2. Inform future budget decisions 3. Improve overall efficiency and

effectiveness (streamlining and/or restructuring

4. Responding to accreditation concerns 5. Dovetailing prioritization with strategic

planning 6. Responding to demands from

Boards/Public Entities

Why Do We Need to Prioritize?

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7. Achieve strategic initiatives 8. Tackle specific shortfalls (deferred

maintenance; pension underfunding) 9. Reinvest in new programs and

initiatives to strengthen the institution’s future

10. Create a Contingency & Reserve Fund

11. Create a database that can be used as a management tool for future decisions

Top Reasons (Continued)

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The price of program bloat for all is impoverishment of each

Unfortunate Reality:

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Focus on the non-academic side

Defer physical plant maintenance

Ignore academics as too politically volatile

Make cuts across-the-boardMake fortuitous cuts

Most Efforts Have Been To:

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NOT ALL PROGRAMS ARE EQUAL

Some are more efficient Some are more effective Some are more central to mission

The Inescapable Truth is…

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Focusing on Programs as the Unit of Analysis

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Any activity or collection of activities that consumes resources (dollars, people, time, space, equipment)

If you believe in reincarnation, come back as an academic program and enjoy eternal life

What Constitutes a Program?

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PROGRAMS, not departments

PRIORITIZATION, not “Review”(Reviews assume continuance, are

not tied to resource allocation, and are not conducted simultaneously)

Setting Academic Priorities

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Analysis focused on pre-selected criteria

Concentration on resource development & resource utilization, independent of structure

Focus on efficiency, effectiveness & centrality to mission

Identifying opportunities to increase revenue, decrease expenses, improve quality, strengthen reputation

Program Prioritization Permits:

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Tough Decision: WHAT TO DO

Tougher Decision: WHAT NOT TO DO

Toughest Decision: WHAT TO STOP DOING

Michael PorterHarvard Business School:

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1. History, Development & Expectations of the Program

2. External Demand 3. Internal Demand4. Quality of Inputs & Processes5. Quality of Outcomes 6. Size, Scope & Productivity7. Revenue and Other Resources Generated 8. Costs and Other Expenses 9. Impact, Justification & Overall Essentiality10. Opportunity Analysis

Selecting Appropriate Criteria

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What Are the Most Important Criteria for Lehman College?

What Relative Weights Would You Assign to These Criteria?

What Sources of Data Will You Use to Support the Analysis?

Discussion:

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Importance of Process— Preparation Process design and management Communication planning Data collection The rating system Levels of judgment Ranking by categories Decisions

How to Get Started

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Lehman College serves the Bronx and surrounding region as an intellectual, economic, and cultural center. Lehman College provides undergraduate and graduate studies in the liberal arts and sciences and professional education within a dynamic research environment, while embracing diversity and actively engaging students in their academic, personal, and professional development.

Reaffirming Institutional Mission

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Most institutions can no longer afford to be what they’ve become

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The role and mission should permit only those activities that need to be done and that the institution and its people do well

Focus:

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1. Opportunities for cost savings & cost sharing should be explored.

2. Outsourcing non-mission critical functions may be cost effective.

3. Middle management bulge is unsustainable. 4. Technological improvements may yield

savings. 5. Process streamlining can save time and

money. 6. Sources of hidden costs should be explored. 7. Restructuring/Collaboration can improve

efficiencies.

The Case for Prioritizing Administrative Programs

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1. Key objectives and how they are measured.

2. Services provided and to which customers, internal and external.

3. Position-by-position analysis. 4. Unmet needs and demands. 5. Opportunities for collaboration and

restructuring.

New Criteria for Administrative Programs

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6. Opportunities to share skill sets and resources.

7. Opportunities for cross-training. 8. Technological improvements that

are cost-effective. 9. Process improvements to

streamline operations. 10. Outsourcing exploration to

improve service and cut costs.

New Criteria (Cont’d)

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Enrichment or expansion of existing programs

Addition of new programs Reduction of programs Consolidation or restructuring of

programs Elimination of programs Legal, policy and accreditation

implications Maintaining the database for the

future

Implementing Program Decisions

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1. Preparation and Readiness Phase

2. Organizational Phase 3. Data Collection Phase 4. Analysis and Assessment Phase

5. Decision-Making Phase 6. Implementation Phase 7. Evaluation Phase

Prioritization Checklist:Seven Phases

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Hundreds of colleges and universities across North America have successfully completed a prioritization process to achieve budget, program, and quality goals.

Key Elements:◦ Alignment◦ Data◦ Courage

Results: We Are Not Alone

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Reallocation of Resources is Necessary

Prioritization of Programs is Possible

With Courage and Leadership Lehman College Can be Strengthened

Conclusion

Sources: Dickeson, R. C., Prioritizing Academic

Programs and Services, Jossey Bass Publishers, 2010.

Dickeson, R. C., “Unbundling the Issue of Productivity,” Planning for Higher Education, Vol. 41, No. 2, January, 2013.