In Spring 2020, we brought together the inaugural cohort of the Financial Sustainability Collaborative (FSC). Thirty institutions gathered monthly and followed a four-month, EAB-created curriculum to confidentially discuss the myriad challenges associated with budgetary and financial perspectives within the academic enterprise. Ultimately, participants identified the most promising opportunities for their unique institution, estimated achievable targets for revenue growth and cost savings, and learned about the FSC-specific tools to prioritize and achieve their desired results.
During my four months working with this group, I was floored by each participant’s willingness to discuss his or her own challenges and learn promising solutions from both experts and peers. Through it all, five core lessons resonated across the cohort.
Lesson 1: Data analysis can help you prioritize your largest opportunities
While there are many avenues for improving financial performance, tolerance for change and staff capacity limit the number of initiatives you can pursue over a year. However, some simple calculations can help you decide which initiatives represent the largest opportunity for revenue growth or cost reduction, so you don’t waste time on lower impact initiatives.
Lesson 2: The data doesn’t have to be perfect
No institution has perfect data, but that shouldn’t stop you from estimating the relative size of the opportunity. An order of magnitude estimate based on rough data is typically sufficient to prioritize your best opportunities. Don’t let perfectionism get in your way – after all, there’s no better time to start than now.
Lesson 3: Engaging stakeholders is the real challenge
Sizing opportunities through data analysis is relatively straightforward compared to the challenge of getting the necessary stakeholders on board to make changes. Whether its senior administrators, deans and chairs, the faculty senate, or the board, expect to spend a significant amount of time communicating opportunities, listening for feedback, and building consensus around a path forward.
Lesson 4: Shift perspective from cost reduction to return on investment (ROI)
While reducing costs within the academic enterprise is sometimes necessary, the ultimate goal is to increase the impact (on student learning, faculty scholarship, community engagement, et cetera) of existing resources. Highlight opportunities to increase impact or return on investment, rather than focus on budget reduction.
For example, rather than focus on reducing the number of small classes offered, show that eliminating some small classes can enable faculty to reallocate their time to higher impact activities like program innovation, increased research output, or student mentoring.
Lesson 5: We need to rethink our systems for measuring faculty productivity
The most valuable contributions that faculty make are not captured in our productivity metrics. The focus of academic efficiency metrics on class sizes and teaching loads ignores other critical contributions—student mentoring, pedagogical innovation, new course/ program development, and student career development.
Institutions need new models of faculty productivity, more flexibly defined faculty roles, and more comprehensive criteria for tenure and promotion that recognize and reward the broad range of faculty activity beyond teaching and research output. Also, broad disparities in faculty workload are not just an efficiency issue, they are also an equity issue.
Want to find out more?
Participation in a Financial Sustainability Collaborative is reserved for institutions participating in our suite of executive forums. Email [email protected] or speak with your Strategic Leader to learn more
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