Charting a Business Course
Bentley College is sailing into a bright future as a business university. Its success has much to do with bringing the faculty on board to work with administration
By Paul Clemente
Back then, Bentley was a generally undifferentiated regional business school. Morone's vision was to make Bentley the leading edge institution in the integration of information technology, business practice, and the arts and sciences. Or, as he put it recently in a letter to alumni, "to do for students with a passion for business…what MIT, Carnegie Mellon, RPI…do for students interested in science and engineering." And he wanted to take it further—to, in fact, define how that mission impacts teaching, student life, and the very fabric of Bentley's operations.
The first step was to launch a series of strategic initiatives Morone dubbed "the next level." These goals would substantially improve student quality and services and transform the academic, physical, and technical infrastructure of the college—all in a concerted effort to differentiate Bentley as the business school for the information age. These dovetailed into a larger goal: the business university.
But how does that differ from a business program in a comprehensive university? Morone put it this way in his letter: "We are carving out a unique identity…as a 'business university.' That means everything we do blends great depth in a technology-rich business curriculum with a robust arts and sciences program geared to the needs and interests of business students." The concept is common in Europe, but Bentley is leading the way with the new category in the United States. As Morone says, "We do what schools of business can't do and what schools of liberal arts won't do."
From an academic standpoint, pursuing the business university model at Bentley requires a unified faculty, where business professors collaborate with their arts and sciences colleagues to develop curricula that complement both disciplines. Then add to that curricular mix a tremendous infusion of technology. Think courses in philosophy, where a chief focus is on business ethics and privacy, or in the natural sciences, where environmental impact studies and the biotech industry are explored. Think corporate communications and information design courses taught by professors of English, mathematics courses led by actuaries. This is Bentley's sole academic focus.
From a business standpoint, it means an uncommon opportunity to work hand-in-glove with the academic side of the house to design and manage how the entire institution functions. Succinctly stated, Bentley is at the intersection of business, information technology, and the arts and sciences.
Bentley recognized early on the importance of modern technology—in 1985 it was among the first colleges and universities in the country to require that students have portable computers. Its latest niche bid is a critical move in the highly competitive academic marketplace. The reasoning: A student steeped in business and technology, and with a solid foundation in the liberal arts, is well rounded and highly employable right out of college. It's a concept with strong resonance among prospective undergrads and their parents, and especially to a talent-hungry corporate community.
The Next Level
The cornerstone of the 1997 initiatives was a merging of information technology into all academic programs, both undergraduate and graduate. Six specialized, technology-driven teaching facilities were envisioned; all are now up and running:
- The Trading Room is a 57-seat facility, combining real-time data and state-of-the-art technology, which delivers world financial markets to Bentley. It offers firsthand exposure to financial concepts such as portfolio construction, trading, and risk management.
- The Accounting Center for Electronic Learning and Business Measurement allows students to use the same high-end technologies employed in accounting, auditing, and other assurance delivering functions. As one of the first such facilities on U.S. campuses, it introduces students to auditing software, data modeling, and other professional tools.
- The Center for Marketing Technology is an integral part of Bentley's Information Age marketing programs, serving as a best practices lab for exploring high-tech tools and activities used in marketing and advertising.
- The Center for Languages and International Collaboration enhances course curricula in modern languages and international studies through use of state-of-the-art technology, including videoconferencing and satellite TV.
- The Design and Usability Testing Center features highly sophisticated usability-testing facilities, with resources that help make software and Web interfaces easier to navigate.
- The Academic Technology Center has a staff of 12 professionals who work specifically to support and train faculty members in the use of a wide range of information technologies in their teaching and research.
In addition, a total redesign of the MBA program—now called the Information Age MBA—reflects the infusion of information technology. Other existing programs were redeveloped with technology in mind, and new masters of science programs were introduced.
The showpiece for these initiatives was the construction of the Smith Academic Technology Center, a 70,000-square-foot facility that opened in 2000. It houses the Trading Room, Design and Usability Testing Center, as well as high-tech and distance education classrooms, group study rooms, and faculty offices.
The normal student life enhancements have been equally important in the recasting of Bentley. Since 1997, the university has constructed three new residence halls, increasing its bed spaces by 39 percent; built a new student center, two parking decks, and new athletic facilities; and acquired land that increased the campus by 48 percent. A core component of the plan was the campus computer network, which emerged as a foundation of the curriculum. It has already earned a number of awards and citations from organizations such as EDUCAUSE, NASDAQ, and Computerworld; last year Princeton Review recognized Bentley as the nation's third most connected college.
To support the next level, Bentley has invested more than $125 million in capital expenditures, resulting in a 270 percent, increase in its property, plant, and equipment assets. These investments were financed through new debt, fundraising, a strategic repositioning of tuition (first applied to freshmen in 1999), and a transfer of endowment assets to purchase 33 acres of contiguous land. Despite these investments, Bentley has produced an uninterrupted string of operating surpluses and was recently able to invest $10 million of operating cash in the endowment.
A BENTLEY SNAPSHOT
Bentley College is a business university, focused on education and research in business and related professions. It blends the breadth and technological strength of a large university with the values and student orientation of a small college.
Taking It Up a Notch
Now that the first round of initiatives has been accomplished, Bentley can call itself a true business university. The overarching goals now include an emphasis on recruiting the best faculty and students, fostering research, and improving the academic infrastructure.
Morone calls this next phase of the long-term strategic plan "the next, next level." One of the first orders of business was to enhance the scholarly activity, starting with the faculty.
The academic affairs leadership has been recast with several new hires. Robert D. Galliers, provost/vice president for academic affairs, was recruited from the London School of Economics, and is an internationally known expert on the integration of business education and IT. Margi Olson, dean of business and McCallum Graduate School, was plucked from the corporate ranks—the former chief knowledge officer for Lotus Consulting Worldwide has extensive career experience in higher education and is widely recognized as an authority on knowledge management. The arts and sciences sector is also benefiting from a new dean, Kate Davy, who has strong arts experience and has served as dean in the University of California and the University of Wisconsin systems.
In addition to aggressively recruiting new tenure-track faculty from a host of major universities, Bentley created three interdisciplinary, distinguished professorships to provide leadership in scholarly excellence. A small PhD program is being explored, but even now, corporate partners work in conjunction with faculty on research, which is actively promoted at all levels.
The test for the business operation was to provide even more resources and infrastructure to support new initiatives. We stepped up to the challenge with the following:
- The library has recently purchased the Arts and Humanities Index and the Social Sciences Citation Index, online databases that provide access to bibliographic information from more than 2,800 journals. It has also acquired EBSCOs Business Source Premier and Academic, which together add full-text online access to more than 5,000 journals. These additions will require a major renewal and reconfiguration of library space.
- Twenty new faculty members will be hired across the next five years, along with support staff. This will reduce teaching loads and encourage faculty research. (It also means attendant increases in the instruction budget as well as new offices.)
- The increased focus on the arts calls for new space for added arts programs—music, art, dance, and so forth. Several proposals are under consideration.
- PhD program, regardless of size, would require the basic infrastructure, from offices to faculty, and potentially housing.
There was an epiphany for all at the recent meeting of the physical facilities committee of the board of trustees. One look at the agenda proved that, instead of the normal housing, athletic, and student center needs, the university had shifted its priorities. New programs, increased faculty, library, and the arts had moved to the forefront. The challenge will continue to be how to finance and maintain those new facilities in a feasible manner. This shift was further reinforced when the most popular committee sessions at last October's trustee meetings were not the traditional audit and business and finance, but rather student affairs, library, and academic affairs.
Business Principles Drive Operations
But talking the talk as America's first business university is not enough. The role of business officer in a business university is to support the most efficient administrative operations; every practice and strategy must show that we walk the walk as well.
Corporate America looks toward higher education for its talent and frequently makes major strategic decisions based on the advice of MBAs from flagship universities. The irony is that the same colleges that produce the most-sought-after MBAs often manage their operations with practices that have no relationship to what is being taught in the classroom.
At Bentley, when issues and decisions come up, we ask, "What would the business university do?" Often, the solution is implemented in a short time frame, echoing the flexible style of many a successful business. Bentley has accomplished a great deal in business operations by applying business principles, such as regularly formulating and updating its strategic plan. Other principles in play include:
Commitment to customer service. All good businesses recognize the value of customer service, but this is sometimes lost in the university environment with its range of customers—students, faculty, staff, even the general public. But the business operation in a university must value (and serve) each of its constituencies in the same manner that corporate America treats its best customers.
Bentley has been referring to its students as customers since the 1980s. Bentley is committed to maintaining the quality and cleanliness of the buildings (with well-kept grounds, landscaping, immediate repair of damages), the safety of the campus, and the quality of the food. It's a good business proposition.
Financial planning. Bentley maintains a five-year operating and cash-flow model. During the budget development process, all assumptions are tested for the upcoming five years; the budget is not finalized until five years are balanced. Careful attention is paid to ensure that we accommodate strategic priorities, analyze competitive forces, and consider economic conditions. Quarterly forecasts ensure that budgets are balanced and that operating margins are achieved. Capital budgets, which are also prepared for a five-year planning period, are consistent with the strategic plan and with the operating and cash-flow models.
Managing physical resources. One of the biggest investments at any university is its physical plant, which literally touches each customer: staff, faculty, student, every visitor to campus. Each responds to the condition, cleanliness, and climate control of the physical facilities.
My experience is that the physical plant operation is one of the most difficult to manage. The investment required in providing excellent facilities demands that they are competently and efficiently managed. Typically, low staff productivity is the challenge. The leadership of physical plant operations usually comes up through the ranks with little, if any, management training. Managing these resources, especially with cultural issues abounding, is impossible without tough and sophisticated leadership committed to changing the culture and providing the training necessary to get the job done. We have established several training programs for facility managers, including strategic organizational restructuring, goal-setting and managing performance, and stepping up to supervision.
At Bentley, a new software package assists in facilities management. The college is shifting from a 10-year rotating plan (in which residence halls are totally renovated) to a planned maintenance model, where all halls undergo regular upkeep so that all buildings are in similar and excellent condition each September. We eliminated excessive and obsolete inventory and implemented a just-in-time model for supplies and equipment.
We now monitor productivity and utility usage on a real-time basis, and key performance indicators measure productivity. Informal supply rooms across campus have been eliminated, allowing us to turn the space back to other purposes. All of this is not only changing the culture of the facilities operation but is pointing toward a quantum leap in productivity.
Profit centers. Most universities have de facto businesses operating on campus. The operating resources of these businesses are determined by the operating budget of the university, which usually does not include overhead allocations. Two major operations have been designated as profit centers in recent years: the Design and Usability Testing Center and Meeting and Conference Services. The managers of each have been given control over their operating results and are required to produce an operating margin.
Meeting and Conference Services, which serves internal and external customers, was mandated two years ago to operate like a business with defined bottom-line contributions. In that time, the volume has doubled and the net contribution to the bottom line has increased substantially. New financial standards for accepting new customers should help further increase both.
In another revenue stream, the increased use of residence halls for summer camps has driven occupancy up closer to the opening of school, creating the additional pressure of finding time for repairs and preparing them for returning students. But vacant dorm space would result in reduced volume and profit; customers would be turned away. Thinking as a business university drives the realization that this is a management problem. The solution is to manage it rather than to voluntarily decrease the bottom line by creating an across-the-board buffer zone for renovation.
Strategic board involvement. Bentley's rich business tradition provides an excellent pool of alumni who are successful in a wide array of businesses; in practice, they function like a corporate board. Their financial and business expertise is put to use in various board committees where, working in partnership with the administration, trustees are not just approving decisions but are often participating directly in the decision-making process. The key word is "partnership"—this board neither micromanages nor gets involved in day-to-day issues.
Recently, for example, a subcommittee of the business and finance committee participated directly in the analysis and execution of a debt strategy for the college that involved balancing bond rating, debt capacity, and the fixed-to-variable debt mix with building the balance sheet. As a result of this effort, Bentley now has a 67 percent/33 percent fixed-to-variable debt ratio and a 3.68 percent weighted average cost of capital.
GETTING DOWN TO BUSINESS
The university's guiding principles are
Several years ago, members of the board, in partnership with President Morone, managed an effort to change tuition policy and make a substantial market adjustment that delivered great benefits toward improving programs and facilities.
Assessments and outsourcing. Universities frequently collect small departments under "auxiliary services" or similar titles. The result is that managers are responsible for areas in which they have no particular expertise; consequently, they often exert only nominal control. Outsourcing these kinds of operations can greatly improve service and direct management into productive areas, reducing costs in the process. In the past 18 months, Bentley has outsourced its copy center and mailroom with excel-lent results. A print shop that occupied 5,000 square feet of space, with obsolete software and equipment, was closed in favor of up-to-date external vendors.
Seeking Faculty Input
My 20 years of experience, both in a comprehensive university and a research institution, have taught me that major change comes slowly in academia, and opposition comes from many fronts. But not at Bentley, where the vast majority of faculty and staff are supportive of change.
Business must be nimble, so a business university must break out of the slow-moving mold to make and rapidly implement decisions based on sound business principles. For example, it took six weeks from the completion of the print shop analysis to its closure. The outsourcing of the mailroom and copy center was accomplished rapidly and without controversy. It took less than two months from the initial development of a plan to reorganize plant operations to its implementation. All of the changes in the physical plant operation (described above) occurred within 18 months.
If the goal of Bentley's business operations is to practice what we preach, we have to know what is being taught in our classrooms. The best way to learn this is to involve faculty in business issues. Here are several instances where Bentley professors have provided direct assistance on important strategic and operational issues:
Ethics and social responsibility. The business university has a special responsibility to promote ethics and social responsibility. The Center for Business Ethics, which was founded 27 years ago at Bentley, is one of the finest centers of its kind in higher education. The nationally recognized executive director, W. Michael Hoffman, served on a committee of faculty and administrators who wrote Bentley's code of ethics for faculty and staff. In addition, the college is establishing an Alliance for Ethics and Social Responsibility in Business to comprehensively coordinate Bentley's activities in this area. This alliance brings together Bentley's Center for Business Ethics, Service Learning Center, Cronin International Center, and Institute for Women in Leadership to coordinate the many curricular, research, and program initiatives involving ethics and social responsibility not only in the classroom but into the entire Bentley fabric.
Debt strategy. David Simon, Stanton Professor of Finance and formerly an economist with the Board of Governors at the Federal Reserve in Washington, participated on a trustee subcommittee charged with recommending a debt strategy for the college.
Sarbanes-Oxley/internal audit. Donna Fletcher, associate professor of finance and director of the risk management program, is focusing her research on the Sarbanes-Oxley Act. She brought her scholarship to bear on the design and implementation of a new audit committee structure that introduces "best practices" of the Sarbanes-Oxley legislation. In addition, Fletcher has translated her research on "OpenPages," a provider of enterprise governance and compliance management solutions, into practice by making Bentley an "OpenPages" beta site. The college will use the software to explore and evaluate its internal controls.
Employee benefits. Several faculty members participate with the administration in the design of benefit and compensation programs. Recent projects include a market salary analysis for faculty and an overhaul of Bentley's retirement program.
Physical facilities. Faculty members participate directly in trustee physical facility committee meetings, providing input regarding priorities, needs, and other issues.
Not only is the administration willing and eager to involve faculty to help talk the talk, so too is the faculty willing to involve administration. Bentley is presently working with Hewlett Packard to test new tablet PCs as a research tool and in the classroom. Professor Perry Lowe, who has received national media coverage for use of tablet PC in conjunction with Bentley's Center for Marketing Technology, invited Bentley's vice presidents to test the usability of the new tablet before expanding the test to the student body.
The Future Is Now
Business never stands still, and Bentley is still moving toward the realization of a fully functioning business university/business operations model. Some specific plans are already underway:
- Complete the implementation of a comprehensive real-time facilities management system.
- Develop and implement a cost accounting structure that allows fully loading all costs to all cost centers.
- Identify the financial resources to support the academic assets needed to support the business university, including library, technology, faculty, offices, and classrooms.
Other ongoing reinforcements have as much to do with getting the message to communities on and off campus, all with the goal of keeping "ahead of the curve." The business officers have a key role in this and are encouraged to
- go into the classrooms and share their experiences with faculty and students;
- give presentations to various higher education organizations;
- help formulate the key message about the business university that can be communicated to all constituents; and
- keep abreast of the state-of-the art business practices taught in the classroom and applied in the business world—and apply them in our operations.
Financing the next, next level initiatives will need to be accomplished without enrollment growth and without new debt. The additional faculty had already been built into the long-range budget planning models. Other funding sources are expected to include operating surpluses, fundraising, resources freed up from improving plant productivity, implementing a planned facility maintenance program, and, if needed, even another strategic tuition repositioning.
A Promising Direction
The business university strategy is working on all fronts. For faculty, it means a welcome reduction in teaching loads to accommodate burgeoning research activity as well as enriched teaching resources. Moreover, top scholars are joining the faculty ranks. Admission applications have jumped 43 percent since 1997, and the caliber of incoming students—as measured by SAT scores and high school class rank—has hit new highs annually for the past six years. Despite the tough economy, at commencement in May 2003, 71 percent of Bentley undergraduates had jobs or were headed for graduate school. Additionally, the number of job opportunities through on-campus recruiting jumped from 440 last year to 500 this year.
A $100 million fundraising campaign, four times larger than the last one, passed the $75 million mark at the close of FY03. The campaign supports a variety of initiatives, including student scholarships; curricular, research, and technology initiatives; and enhancements to student life (both facilities and programming).
In September, Kaplan/Newsweek placed Bentley among the nation's 12 "hot schools," the "rising stars" in American higher education. What's a hot school? According to Newsweek, it's a school "that we've heard about...from guidance counselors, from admission officers, from students, where something significant is going on."
Something significant is indeed going on at Bentley.
Author Bio Paul Clemente is vice president of business and finance, and treasurer, Bentley College.
- ED Publishes Proposed Rules on Cash Management
- IPEDS Considers Improving Finance Survey
- Guidance Available on Title IX Coordinator Role
- 2015 CAO and CBO Collaborations
August 3-4, 2015
- 2015 Planning and Budgeting Forum
September 28-29, 2015
- 2015 Tax Forum
October 25-27, 2015
- ON-DEMAND: Lessons Learned in Communicating Financial Information Effectively
- ON-DEMAND: Corporate Sponsorships: Getting it Right
- ON-DEMAND: Analytics that Support Planning, Budgeting, and Results
- A Guide to College and University Budgeting: Foundations for Institutional Effectiveness, 4th ed. - by Larry Goldstein
- NACUBO's Guide to Unitizing Investment Pools - by Mary S. Wheeler
- Managing and Collecting Student Accounts and Loans - by David R. Glezerman and Dennis DeSantis