Sunday, June 17, 2012

Teresa Sullivan and UVa

cross-posted from Dagblog

I'm out of the country right now, but even so I can't avoid the uproar over Teresa Sullivan being pushed out as President of the University of Virginia after only two years.

Her forced resignation seems to have taken the campus entirely by surprise, and she was widely regarded as doing an excellent job. The university's Board of Governors (composed entirely of political appointees, mostly major donors to the governor) was first said to have acted unanimously, but now seem to have never actually held a meeting or taken a vote. (Sullivan was evidently sacked at an "emergency meeting" held by 3 of the 16 Board members.) And the Board's chair or Rector, Helen Dragas, has been extremely bad at explaining the reasons for this sudden move. Kris Olds at GlobalHigherEd has the most extensive round-up of the information known to this point, and asks if it still makes sense for a board of gubernatorial appointees to have this much power over a university now that the state only provides 10% of the budget.

How this shakes out in the end is far from clear. But at the very least, this is a public-relations disaster by the Board, and may do meaningful damage to UVa's reputation. It's pretty clear that the Board leadership, dominated by business executive types, wanted more "visionary," top-down MBA-style management (one person who's boasted about working on the "project" of removing Sullivan has thrown around the phrase "strategic dynamism"), but they've provided a good lesson in how "bold," go-it-alone decision making can burn an organization.

I also don't know how you recruit a truly promising replacement for Sullivan under these circumstances. Unless Dragas has secretly lined someone up in advance, any good prospect for UVa's presidency would have to be wary about the job. But any replacement that the faculty and alumni perceived as having been lined up beforehand would be tainted by this process, and face significant management and fund-raising challenges.

But one thing especially deserves mention:

This is very unusual for a school with Virginia's reputation.

Boards of Trustees do often push for more "transformative" and "visionary" leadership, hiring and supporting college presidents who fit the model of leadership promoted by popular business-management books. But "transformative" management figures much more heavily in schools with weaker reputations, while prestigious and established universities are much less likely to have leadership talk about reinventing the whole university. (Why reinvent Princeton? Princeton is doing fine.) You are far more likely to hear about the president of Prairie State College (Lonely Rock campus) as a visionary CEO, if you ever hear of him or her, than you are to hear that about the president of Yale. (Yale's had the same president for decades, and as far as I know he talks a lot about excellence, but much less about transformation.)

There are a lot of reasons for this. The better-established a school is, the more power various individual stake-holders have, and the more buy-in the leadership needs from those different power centers. A rich school has more big donors to keep donating; a school with prize-winning faculty members has to keep them from leaving for a better offer; a school with a loyal alumni base has to make sure that those alumni believe that the school is continuing its best traditions. Wealth and prestige come with more people to keep from alienating. And reputation itself matters. The less well-regarded a school, the easier it is to sell the idea that it needs to be shaken up and transformed. A CEO-style university president of an obscure college can be imagined by the Trustees (and himself), as a bigger deal than the school itself. But, as I believe John Quincy Adams first said, ain't nobody at Harvard bigger than Harvard.

The University of Virginia is much more like Harvard or Yale, in terms of reputation, than it is like my hypothetical Prairie State at Lonely Rock. It is nationally ranked, with many departments ranked in the top ten: truly one of the Public Ivies. It has a large, well-heeled body of deeply loyal alumni. It has faculty who are leaders in their fields. It was personally founded by Thomas Jefferson. Some of the campus buildings were designed by Jefferson himself.  This isn't some low-profile satellite campus.

And for that reason, the struggle over Virginia will suggest a great deal about the fate of higher education, and especially public higher education, in America. What the Board of Visitors would (apparently) like to do there has already been done at schools that don't get any love, and no one's raised much of a fuss because, basically, the people who make decisions in our society don't give a damn what happens to the students at those schools. If you're going to Prairie State at Lonely Rock, elite decision-makers have already written you off because you couldn't get into a better school. They won't say this, of course. They will just talk about what is best for you, and what a student like you really needs, which of course is never what their own college-age children need but what is appropriate to someone of your lowly station. And naturally, what someone in your lowly station needs is not to have your aspirations set too high.

But UVa is not a school for people that our policy elite wants to write off. UVa is for students that Virginia's power brokers view as actual students, with actual futures. And the University is something in which the state, as a whole, has long taken great pride. Giving Mr. Jefferson's University the Prairie State-Lonely Rock treatment, if it sticks, will be a sign that what's been happening at Prairie State-Lonely Rock will soon happen everywhere in public higher education. There will no longer be a high-quality option offered at a few flagship schools while the other public universities became playgrounds for whatever educational and management fads are popular among neoliberal business types. All of the public universities will be neoliberalized, with strategically dynamic visionary CEOs free to run the places as they choose. Maybe that will be great. Maybe it won't. But if it doesn't go well, there won't be any other kind of public university to choose from.

What might Rector Helen Dragas want a "visionary" president to transform about Virginia? Early (and very much incomplete) signs suggest three things:

1) An aggressive move into E-learning

A lot of speculation has gone into the high-profile topic of e-learning, which the tea leaves suggest the Rector wanted in a big way while Sullivan was attending to other issues (like fixing the school's finances, coping a big enrollment increase mandated by the state, and trying to deal with the fact that much of UVa's already-smallish faculty is nearing retirement). This has gotten attention because e-learning has been in the news a lot, but is likely a minor factor.

If Sullivan was moving slowly on e-learning, there are good reasons, not least the fact that e-learning is expensive and there's already budgetary strain on day-to-day academic operations. One of the Rector's comments suggests that the new MOOCs at places like Stanford and Harvard have impressed her, but those MOOCs are money-losers by their very definition. They are exercises in public outreach and brand-building. (And the schools offering them don't give academic credit for them.) Investing heavily in MOOCs right now would cost serious money and return no revenue at all.
Meanwhile, the for-profit model of online education pioneered by places like the University of Phoenix does reduce the cost of instruction per student, but has much lower student success rates and would be a real danger to UVa's brand. (UVa's long-term health is about its prestige and desirability.) If UVa makes a successful move into online learning they, like the rest of us, will have to take the time to figure out a better model than the ones currently on the table. This is an area that calls for deliberate haste, as that great management guru Caesar Augustus would say. Wanting to see a big investment in online learning right now is maybe the essence of over-excitable management.

2. There are rumors that the Board wanted to chase high-profile star faculty.

Sullivan had gotten in across to the Board that Virginia needed to replace the wave of faculty due to retire over the next decade. She had also pointed out to them that UVa's current faculty stars were extremely vulnerable to poaching by richer schools, and that because UVa is on the small side for a faculty of its caliber, many departments could plummet in the rankings if only one or two of its stars left. Sullivan's approach was to find ways to hold onto the star professors without getting into bidding wars that UVa would lose anyway, using things like interdisciplinary research centers to keep the best faculty tied to Virginia. (The thinking being that if faculty get involved in interesting long-term research projects with other professors at Virginia, they will be less likely to jump ship.) In other words, Sullivan knew she couldn't compete on salary, so she sensibly looked at the other things that motivate faculty but which cost less money. And in her first two years, she'd already set up two such centers.

Sullivan's approach to rebuilding the faculty could be paraphrased as "draft, train, and retain," which is the most effective low-cost solution. Her model envisioned very careful hiring to get the best new faculty fresh from doctoral programs, helping them grow into stars, and having them retire at Virginia. That approach requires superb execution, but it's by far the most affordable way to build a strong faculty. And of course, that approach requires patience and time. There are hints that at least some of the Board wanted to chase big-name star faculty right away, which by necessity means throwing money at those pricey free agents at the same time the school is in budget trouble.  If this is even partly true, it suggests that the MBAs on the Board were pushing a riskier, more expensive, and less fiscally prudent (but flashier) recruitment strategy on the less "visionary" and "dynamic" PhD charged with managing the university. Recruiting what Dragas calls "a stellar new president" would be the first such star hire.

3. Most importantly, the Board wanted "Program Prioritization"

It's clear, according to the Washington Post today, that the Board leadership wanted Sullivan to make large budget cuts, including cutting entire academic departments. This is presented by the Post as cutting the money-losing units, but the truth is likely more complicated.

Dragas's remarks have included references to "prioritization and reallocation." This refers to a process currently fashionable in academic management for a process called "program prioritization," a centralized process which evaluates every academic program and department in the university, rates them, and recommends that some be cut or reduced while others be funded more. The point of the exercise is to shift funding from one area to another. (Dragas has also talked about "redirecting funds.") This sounds, on the surface, like protecting the bottom line, but circumstances at Virginia suggest the opposite.

"Program prioritization" is the mutant offspring of the "building spires" model of academic management. "Building spires" suggests that a school can't be good at everything, so that to grow best it should invest its money in one or two signature programs that eventually become renowned for excellence. Those "spires" then build the school's overall reputation, bringing in money to build up one or two more programs until they become "spires," and so on. "Prioritization" turns this around to try to create favored programs while cutting money, rather than adding it. Instead of funding the non-favored programs at a status quo rate while investing any new funds in the favorites, "program prioritization" cuts funds from some programs to put the money into the one or two that the administration wants to turn into "spires." The central management handbook on this process (a book which, God help me, I have actually read), states this principle outright: "The main source of new resources for programs is from existing programs." 

Sullivan had just installed a set of new financial reforms that is just the opposite of this rob-Peter-to-pay-Paul system. She had decentralized UVa's finances, allowing each school and department to keep the revenue it generated but also forcing the schools and departments to live within their means. It's a way of promoting fiscal responsibility from the ground floor up. Departments that generate a lot of tuition, bring in a lot of grants, or raise a lot of donations could grow, and departments that didn't would have to find a way to do better. This is much like Harvard's famous "every tub on its own bottom" fiscal principle, which means that the university's various schools never subsidize one another. The Law School keeps the money it generates, and so do the Medical School and the College, and if, say, the School of Ed is having budget troubles it solves them itself instead of taking money away from Law or Business. This really is a live-within-your-budget system. 

But this, apparently, is not what Dragas wanted. Program prioritization allows the central administration to take money from profitable units and redirect it to unprofitable units that the administration favors. If the Rector disliked the financical-responsibility model that Sullivan had installed and is talking about "prioritization" it suggests that she wants to take money from financially sound units that she doesn't value in order to finance money-losing glamor projects.

I know that this is exactly the reverse of what everyone expects, so let me repeat it. The business-school types on the Board favor a system that cuts funds from profitable departments and funnels that money to less profitable ones.

The humanities, for example, sound impractical and "wasteful," but are often quite cost-effective, especially at the lower levels. A 300-student lecture on Shakespeare or the American Civil War brings in a fair amount of tuition with very little overhead. Some of the money that humanities departments generate this way subsidizes their smaller advanced classes, so that seniors can have face-time with the faculty, but there's still some money left over that colleges often use to fund smaller and more expensive majors, like physics. Every school does some of these so-called cross-subsidies, but often the rule is that departments might cross-subsidize but colleges or schools do not. And Sullivan evidently just limited the amount of those subsidies within schools and colleges.

If this displeased the Board, it's because they don't want certain high-profile programs to have to live within their means. For example, some early comments have suggested that UVa's highly expensive and unprofitable Medical Center might be one of the favored programs. If so, the thinking would be to make cuts in Virginia's undergraduate program to help underwrite its struggling hospital. That is what the business-school graduates on the Board may want to do in the name of financial prudence. If it sounds like the opposite of sound financial management to you, well, I don't have an MBA.


Unknown said...

It seems to me that your key paragraph is the one about the relationship between the university and its stakeholders. One wonders whether that was the real problem here: not that Sullivan was in sufficiently transformative, but rather that she did not build or maintain the necessary relationships with those who truly run the University. One wonders also whether, in the case of a public university, these stakeholders might not have a distorted view of the public interest that is driven by business interests or even sheer idiosyncrasy, while having disproportionate power over the university. This is a problem in higher education governance that is bigger than U.Va.

Doctor Cleveland said...
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