Recognize That People and Their Time Are Your Greatest Resources

When I advise college faculty and administrators on what needs to be done regarding assessment, accreditation, accountability, or any of the dimensions of quality, the most common question I hear is: “Where do I find the time to do this?” Human resources consume the vast majority of most college budgets, and time is a resource to be safeguarded, deployed, and analyzed just like any other resource. I offer suggestions regarding this throughout this chapter.

Ensure Your College’s Health and Well-Being

Part of the fiduciary responsibility of a college’s leaders and board is to ensure the college’s health and well-being. Is the college solvent? Safe? Does it have enough resources to achieve its purpose and goals and to ensure ongoing quality? To weather any unexpected expenses or revenue downturns?

A college may not have a formal strategic goal to keep the books balanced and maintain a healthy cash flow, but obviously these measures of financial health nonetheless need to be monitored on an ongoing basis. Similarly, a college may not have a formal strategic goal to provide its students with a safe campus environment but, no matter how safe its campus is, it should monitor crime statistics to make sure problems are not developing.

I do not pretend to have any great financial expertise, but I have found that the following truisms are as relevant as ever to ensuring a college’s financial health and well-being.

Understand your financial picture. Someone once confessed to me: “I don’t know why our accountant said we need this month-by-month breakdown of revenues and expenditures.” (The answer? You have cash flow problems.) When it comes to finances, there is no such thing as a stupid question. Keep asking questions until you are comfortable that you understand every financial document you are seeing. Among the measures you should track regularly are your income sources (tuition revenue, gifts, and endowment size and yield), expenditures by object (such as personnel, equipment, and facilities), and expenditures by cost center (such as the biology department, admissions office, and tutoring center).

If your college is private, one of the most important financial health measures to monitor is its federal financial responsibility composite score, partly because it affects your ability to offer Title IV financial aid and partly because it is publicly available and can therefore affect your college’s reputation and perception of creditworthiness. The score is a composite of three ratios that the U.S. Department of Education (ED) calculates from audited financial statements:

• The primary reserve ratio is the ratio of expendable resources to total expenditures. It is a measure of your college’s liquidity—its access to ready cash.
• The equity ratio is the proportion of assets that is not subject to claims by third parties. It is a measure of your college’s capacity to borrow.
• The net income ratio is your college’s net income gain or loss: revenue minus expenditures as a proportion of revenue. It is a measure of your college’s ability to operate within its means.

Federal financial responsibility composite scores are interpreted as follows:

• 1.5 to 3.0: Financially responsible
• 1.0 to 1.4: Financially responsible, but requiring additional ED oversight
• –1.0 to 0.9: Not financially responsible

For more information, visit http://studentaid.ed.gov/about/data-center/school/composite-scores.

The federal financial responsibility composite score is only one indicator of financial health. Bond rating services such as Standard & Poor’s, Moody’s, and Fitch monitor their own indicators of financial health, including not only the financial ratios examined by ED but also qualitative factors, such as the college’s leadership, its market, its strategic plan, and the viability of its educational offerings. Feasible enrollment management plans, based on well-founded realistic assumptions, are thus vital to financial health.

Live below your means. Develop not one financial plan but three: a reasonable budget based on prudent assumptions informed by past experiences, an optimistic budget assuming that your plans for improvements in enrollments, gifts, and other revenues and expenses do indeed materialize, and a pessimistic budget based on unanticipated shortfalls in enrollment or investment value or on expenses running significantly higher than anticipated.

Diversify your assets. The more flexible your facilities, the better positioned you are to respond to students’ changing needs. The greater the range of experience and expertise in your faculty, staff, and board members, the greater your flexibility and capacity to respond to unforeseen developments. The more diversified your endowment and other investments, the better your capacity to weather market fluctuations.

Diversify your revenue sources. The Great Recession of 2008–2009 hit every sector of higher education, but in different ways. Public colleges saw their state funds cut, sometimes dramatically. Some small regional private colleges saw drops in enrollment . . . and in tuition revenue. Some older, well-established private colleges saw the values of their endowments dip . . . along with the endowment revenue they counted on for their operating budgets. The colleges that weathered this fiscal storm best generally seemed to be those who were not overly reliant on any one source of revenue for their annual operating budgets. Monitor the diversification of your revenue sources by tracking the proportions of annual revenue derived from tuition, annual fund gifts, endowment income, auxiliary enterprises, and athletics, as appropriate.

Have enough people, including a sufficient core of full-time faculty and student support staff. Full-time faculty are the linchpins of your college. They are the ones who, more than anyone else, bring everything contributing to the student learning experience into a cohesive whole: their disciplinary expertise, articulation of program- and college-wide learning outcomes, curricular design and review, teaching, guidance and support to students, and assessment of learning outcomes. They also contribute significantly to your college’s system of collegial governance (Chapter 7). Separate these responsibilities among people serving narrower roles, and you run the risk that the student learning experience may be provided in uncoordinated fragments and therefore decline in quality and effectiveness.

Put Your Money Where Your Mouth Is

Just because your college has resources in place does not necessarily mean that it is achieving its purpose and goals, that students are learning what they are supposed to, or that a culture of quality is being advanced. Your college’s key responsibilities (Chapter 5) should be central to how you deploy resources. Put more simply, a quality college puts its money where its mouth is. It deploys its resources in ways that meet stakeholder needs, serve the public good, achieve its purpose and goals, and ensure and demonstrate its quality and effectiveness.

As your college leaders develop various college budgets (annual operating budget, capital budget, and so on), they should do so with your college’s purpose and goals in hand, asking questions like these:

• What human, capital, and technology investments will most help our college achieve its purpose and goals, help students achieve key learning outcomes, and advance a culture of quality?
• What is consuming significant resources but not contributing substantively toward achievement of our college’s purpose and goals?
• How might our college be different if a particular course, program, or service did not exist? Would our college still be able to achieve its purpose?

Your college leaders should then give funding priority to requests and needs that flow from your college’s purpose, goals, responsibilities, and quality agenda and that are supported by systematic evidence. Provosts have told me that they have advised department chairs: “If your budget request isn’t supported by systematic evidence, don’t bother giving it to me.” Resource deployment decisions made by buttonholing or lobbying a college leader are poor stewardship . . . and unfair. Across-the-board budget cuts are politically expedient but poor stewardship. Think what you would do with your own family budget if you faced a pay cut. You probably would not cut every expense across the board by an equal proportion. You would cut back the most on vacations, eating out, and entertainment, while minimizing cuts to more vital expenses such as groceries. Your college should do the same.

Deploying resources to support your college’s key aims is hard today. Money is so tight that funds and time for college priorities must often come not from new resources but by redeploying existing resources (Lederman, 2013). It may be time for your college to limit and focus its priorities, rather than aiming to be all things to all people, as I discuss in Chapters 9 and 10.

Scale back time spent on tangential activities. The vast majority of people I meet at colleges are hard-working and spend their time trying to accomplish important things, but there are only so many hours in a week. The only way to help everyone find time to address key goals and advance the five cultures of quality is to hone back time spent on less important things, at least temporarily, while you get quality initiatives going. If you do not do this, you are essentially telling your college community that your college’s stated priorities and the cultures of quality are less important than whatever else they have been doing.

Review low-enrollment courses. Here is an example I used at a small college with an average class size of 13 students. A faculty member teaching eight courses a year, with an average of 13 students per class, teaches 104 students per year. If the faculty member taught an average of 15 students per class instead of 13—just two more—in seven courses a year, she would teach roughly the same number of students per year (105 versus 104) with one less course preparation, giving her more time for advising students, working on the curriculum, assessing student learning, and so on.

Consider streamlining course and co-curricular offerings. It takes a lot more work to offer 20 courses from which students may fulfill a general education requirement than to offer 10. Faculty need to develop twice as many syllabi and spend more time collaborating to ensure that the courses all address—and assess—the requirement’s key learning outcomes.

I offer this advice with a heavy heart, because one of the delights of my own college experience was sating my intellectual curiosity by sampling from an incredible array of courses. But today’s college students are different from many of us. There are probably no more than 20 courses that the vast majority of your students take to fulfill their general education requirements. Research the costs and benefits of offering all the others. Why do your students choose the general education classes they take? Do they choose each class because of intellectual curiosity about the topic, or the time of day it is offered, or the reputation of its professor?

You can ask similar questions about elective courses in your academic programs, co-curricular activities, and student development programs. How many students enroll in or participate in each? What is the cost of each course, activity, or program, and what is its impact? What is the value of these offerings to your college and your students as a whole?

Monitor Where Your Money Is Being Spent

Deploying resources effectively requires looking regularly at where your money is being spent.

What proportion of revenues goes toward your priorities? A good portion of any college’s resources is, of course, deployed simply to ensure its ongoing health and well-being. The electric bill must be paid, snow must be plowed off roads and sidewalks, debts must be paid off, and contributions to employee health plans must be submitted. But I have seen colleges whose “fixed” costs consume up to 90 percent of the annual budget and whose strategic plan is a set of special little add-on projects. These are not colleges that are advancing their quality and effectiveness. Your college’s purpose and goals should be supported by the deployment of significant portions of its budget and everyone’s time.

What proportion of revenues goes toward meeting student needs, including the proportions spent on academics, student development, and student support programs? Are those proportions in line with the emphasis that your mission and key goals place on academics and student development and support? (Proportions that are too low do not necessarily mean that students are not receiving a good education, but they may be paying too much for what they are receiving.)

How does everyone spend his or her time? Imagine asking faculty and staff to keep logs on how they spend their time each week. How would their time usage match up with your college’s stated purpose and goals? Or the next time you are in a meeting, imagine adding up the time the participants spend in the meeting, as well as preparation time and follow-up time. Now imagine calculating the pay and benefits that your college is spending on that time. Was enough accomplished toward achieving your college’s purpose and goals and ensuring quality and effectiveness to make that expenditure worthwhile?

Are you bringing in the right people? In other words, are you hiring people who can help your college move forward substantively with its quality agenda? All accreditors require—and your stakeholders expect—that faculty, administrators, and staff bring appropriate experience and expertise to their positions. (College board members and presidents are discussed in Chapter 8.) This means hiring people with the capacities your college needs to achieve its purpose and goals. If your college is focusing on student learning, for example, give hiring priority to faculty applicants whose research focuses on the scholarship of teaching as well as the traditional scholarship of discovery (Boyer, 1997). If your college is focusing on serving its community, give hiring priority to faculty applicants whose research focuses on the scholarship of application to real-world problems. If your college is serious about providing a learning-centered environment, instead of asking interviewees for teaching positions to deliver a sample lecture, ask them to provide a record of creating environments for learning and to demonstrate how they do this during their interviews.

Watch for both high turnover and stagnation. Part of the experience and expertise that a college needs is with its own history, culture, processes, and realities. When turnover is high, a college loses these, and its progress slows as new incumbents go through the inevitable learning curve.

I worry just as much, however, about colleges that have hired very few people in the last 20 years. New hires bring fresh perspectives and expertise. If your college has low turnover, make a special effort to encourage faculty, administrators, and staff to participate in professional development opportunities to make sure your college remains relevant and responsive and uses current, research-informed practices.

Monitor the Impact of Your Investments

Your college’s stakeholders probably have questions about how your college’s resources are impacting things they care about. It is not enough to tell today’s stakeholders that your college has invested, say, $50,000 in an initiative to improve students’ writing skills. People investing in this initiative want and deserve to see evidence that the $50,000 is spent effectively—that students who complete the program do indeed have stronger writing skills. You should be asking the same questions. Are your investments—your deployments of resources—having the impact you intend? Chapter 13 provides examples of measures for gauging the success of your endeavors.

Monitor student success. I do not care for the widely bandied term “productivity” that is used to describe the proportions of students who complete a program and land an appropriate job; it sounds like colleges are rolling students off an assembly line rather than providing personalized, individualized learning experiences. But concerns about student success are understandable, given stakeholder expectations that U.S. colleges contribute to economic development. One can legitimately raise questions about a college that does not help a sizable proportion of its students achieve their eventual goals to earn a degree or other credential and earn higher pay. So part of a college’s stewardship responsibilities is monitoring the percentage of students who persist through completion of their degrees . . . or achieve whatever other goals they might have. Student success is discussed further in Chapter 12.

Deploy Resources Efficiently

Accreditors tend to focus on effective deployment of resources: using your goals and substantive evidence as the basis for resource deployment decisions, as discussed above and in Chapter 17. But another obligation of stewardship is efficient deployment of resources, yielding an appropriate cost/benefit ratio or return on stakeholder investment. It is perfectly reasonable for students and their families, taxpayers, and donors to expect you to deploy their investments in your college efficiently, keeping a college education affordable. One of stakeholders’ greatest concerns today is how the tuition and fees paid by students compare to their likelihood of graduating and landing a job and their post-graduation pay. Monitor your answers to these questions regularly.

Similarly, track how successfully you are achieving your goals, but also compare those successes against their costs in both time and money. Does your college leadership know and use basic information such as the following?

• Percentage of students who graduate with significantly more than the number of credits required for a degree
• Cost of providing one credit’s worth of education
• Distribution of class sizes (for example, the proportions that are either very large or very small)
• Student/faculty ratio
• Percentage of instructional space that is occupied by scheduled classes, labs, and so on each hour of each day of the week
• Energy use per square foot of space
• Residence hall occupancy rate
• Cost per attendee of cultural events
• Cost of enrolling one new student (admissions and student marketing budgets divided by the number of new students enrolled)
• Cost of each dollar raised (funds raised divided by development, fundraising, and alumni office budgets)

Fold evidence of efficiency into reviews and decisions. Incorporate cost-effectiveness into program reviews and proposals for new initiatives, for example, as discussed in Chapter 20.

But do not let efficiency adversely affect effectiveness. You may save money by moving courses online or increasing class size, but that savings is moot if students do not learn as much or as well. Prudent stewardship requires examining the effectiveness as well as the efficiency of what you are doing. Are you considering increasing class sizes? Try offering a course with two or three different class sizes and comparing student learning outcomes.

Keep the governance structure lean and focused. No matter what its fiscal circumstances, almost every college I know has one thing in overabundance: committees. The problem is that work expands to fill the time allotted. Appoint a committee and it will meet, no matter how important or unimportant its work in advancing the college’s purpose, goals, or quality. Too many layers of committee review can bog a college down and make it unresponsive to stakeholder needs. Try putting some committees on hiatus for a year and see what happens. Or try merging committees to help “move away from the passive and disconnected work that often now occurs, for example, in separate educational policy, curriculum, and assessment committees” (Morrill, 2013, “Faculty Educational Leadership,” para. 1). McKendree University, for example, has one Student Learning, Assessment, and Teaching Effectiveness Committee, whose first responsibility is to improve the quality of teaching and learning (Tami Eggleston, personal communication, June 24, 2013). Ohio State University, meanwhile, integrates assessment oversight into the charges of its curriculum committees (Alexis Collier, personal communication, April 25, 2014). These kinds of practices integrate assessment into teaching and curriculum development, rather than presenting it as a standalone activity.

Proceed carefully with alternative education models. The high cost of the traditional face-to-face teaching model has prompted the exploration of alternative models aimed at improving affordability and effectiveness in meeting today’s needs. These models include:

• Online courses and programs
• Problem-based learning, in which students construct their own learning through hands-on collaborative work solving real-life problems, with a faculty member available as a resource
• Competency-based programs in which progress toward a degree or certificate is judged by what students have learned and can do, rather than by the number of hours they spend in a course

A common characteristic of these models is that students are expected to take greater responsibility for constructing their own learning. These models all have potential to deliver courses and programs more efficiently and to reach students for whom face-to-face on-campus courses are not feasible, such as those living in remote locations or working odd hours. They are not a panacea, however. Some skills, such as using laboratory equipment and client counseling, require face-to-face or hands-on experiences (although simulations can be helpful), and some students learn more effectively when they interact meaningfully with faculty, as discussed in Chapter 12.

These initiatives all require careful planning and significant investment if they are to succeed. Online courses, for example, require an appropriate technology infrastructure, structures for student support, and considerable support for faculty as they transition from teaching face-to-face to the very different model of online education. Develop a “business plan” before moving ahead with any of these ventures, addressing the questions in Table 20.1 in Chapter 20.