1. Coping with the lost decade
How Higher Education Boards and Presidents can Lead Through Change
Coping with the lost decade

3. Trend Lines are Not Sustainable: Structural Deficit

4. Where is Your College or University? Why do you say that?1
Revenues keep pace with expenditures; resources for needs, growth, and vision can be identified – “same old” 2
Feeling the pinch 3
Need serious changes so we can fund needs, growth, and vision, as well as rebalance revenue/expense trend lines 4
Holy catfish, this is a Big Deal 5
Revenue/expense trend lines are diverging too much; Needs, growth, and vision are essential and require resources; We must make major changes and innovations in the next 5-10 years

5. Solution to Structural Deficit
Increase revenues
Cut cost and increase productivity
Whittle away
Major tune-up: Cost-benefit, ROI, CQI
Stop doing things (termination)
Do different things (diversification)
Do things differently (innovation)

6. Sample Productivity Strategies

7. What is Strategic Finance?
Strategic finance is aligning resource decisions
—regarding revenues, creating and maintaining institutional assets, and using those assets—
with the institution's mission and strategic plan.
As institutions begin to move beyond emergency coping, they are tending toward becoming very purposeful, focusing every bit of resource on the highest priority needs.
And governing boards are realizing that “fiduciary” is not synonymous with “fiscal.” Rather, they have a fiduciary duty to the mission of the institution and to ensuring its long-term future. Boards and presidents are becoming more proactive partners, and other executive leaders are becoming more engaged with board committees.

8. Strategic Finance Takes a Broader View
Strategic Finance ADDS:
Resources
Money, capital
Money, people, time, equipment, space, all assets
Major functions
Budget, audit, balance sheet…
Strategic Plan, balanced scorecard, process redesign, strategic planning, technologies, outsourcing, partnering, continuous improvement, goals, performance reviews, incentive systems, change management…
Mind-set
Balance
Expenditures
Then, now, next year
Precision
Align
Costs
Future
Innovation
Orientation toward
More money
Clean audit
More value
Institutional vitality
Leadership
Finance/Administration
All who make decisions affecting the university
University
Sum of its parts
Synergies of energy
It helps to think of “strategic finance” as “strategic resources.”
Finance remains critically important. Strategic finance adds dimensions and it adds constituencies and decision-makers.

9. Target: Vision and Vitality
Where we are going; what we will “look” like
Vitality:
Our mission-critical assets and ability to invest in the future

10. Strategic Plan Missing, Not Communicated, Forgotten

11. ALIGNMENT: Strategic Plan is Working

12. 2020 Indicators: Vision # Vitality #
Strategic Plan
Goals
Critical Priorities
cause indicator change
2020 Indicators: Vision # Vitality #
Vision
Vitality
This is a visual of the definition of strategic finance – aligning resources with the institutions mission and vision.
Mission Core Values

13. Strategic Plan Structure
Mission
Vision: [Define Quality and Vitality in 2020 and Beyond]
Cornerstone
Indicators
Priorities(what)
Initiatives (how)
Student Success
Numbers A1
Projects A2
Urban Research B1
Regional Impact C1 C2
University Vitality D1 D2

14. Sample Future Board of Trustees Scorecard
Indicator
6/10
12/10
6/12
Target
Status
Student Success
* 6 yr grad rate
40%
50% =
* Course completion rate
83%
84%
92% +
Urban Research Transition
* Faculty hiring 2 4 10 ++
* Lab renovations 2%
15%
25%
100%
Regional Impact
* Regional placement
17%
* New businesses 5
University Vitality
* Cost reductions
$100K
$250K
$350K
$20M
* Faculty development
$1K/FTE
$1.1K
$3K/FTE

15. Board-President Leadership in Times of Change
Fiduciary “duty of care:” the “buck” of institutional vitality stops with the board. Develop/reinforce strategic board role. Partner with the president, respect president’s role, expect effective leadership.
Find common ground on how much/what kind of change is needed. Understand/support change management strategies.
Define and focus on a vital, sustainable future state and the actions that will cause it.
Trust AND verify, both ways. Early, often. Keep roles clear and support each other.

16. This work is funded by Lumina Foundation for Education through a grant to the Association of Governing Boards of Universities and Colleges (AGB)
Ellen Chaffee, Ph.D.
Senior Fellow and Project Director, AGB