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Creating Better C-Suite Partnerships

As the CBO’s circle of influence expands, so does the role. To meet today’s intertwined higher education challenges, interacting with academic officers and other campus leaders is just as important as fulfilling financial responsibilities.

By Sandra R. Sabo

Number cruncher. Bean counter. The person who says "no." For decades, such phrases were often used to describe the chief business officer, who toiled behind the scenes keeping books and records, paying the bills, and generating financial reports.

"As long as they kept a university out of trouble with the IRS and auditors—and paid everyone on time—business officers were superstars," observes Bob Lammey, leader of the higher education practice at Ernst & Young LLP. "In that capacity, they didn't have a lot of reason, or expectation, to interact with faculty, deans, and other leaders of the university. But that's not the case anymore."

Expectations of the CBO have changed, to put it mildly. Within the past decade in particular, the recession, shrinking state budgets, and heightened competition within higher education itself for faculty and students have combined to keep unremitting financial pressure on colleges and universities.

Today, every institutional decision is a financial decision. And that means the person who oversees institutional finances must not only be present for, but also participate in, the nitty-gritty discussions that inevitably flow from strategic planning and goal setting.

While necessary, having a mastery of accounting, budgeting, and financial management just isn't enough, as pointed out by the survey accompanying NACUBO's 2013 National Profile of Higher Education Chief Business Officers. The results confirmed that a CBO must rise above technical proficiency to become a visible, forward-looking leader, well versed in all areas of campus operations and capable of spearheading change management (see also, "Skill by Skill" in the November 2014 issue of Business Officer).

"As CBOs, we have to keep the financial engine running, but it's also our job to advise the president on all operational and business concerns," says Ken Long, vice president of administration and finance at East Stroudsburg University (ESU), one of 14 campuses that make up Pennsylvania's state system of higher education. "We are the problem solvers, who need to focus on what the university is trying to accomplish overall, rather than just making the problem go away." 

Read An Online Extra

Marquette University shares its financial performance through an interactive dashboard, see "Few Secrets: A Key to Collaboration," at Business Officer Plus at www.nacubo.org.

For example, financial constraints and decreased enrollment recently prompted ESU to eliminate a few academic programs. To avoid staff reductions, leadership reassigned faculty in the eliminated programs to vacant faculty lines in other departments. "If you just did the math, this approach did not maximize the savings," says Long. "But, aside from economics, it was the right thing to do—retaining those faculty members was good for individual faculty, better for students, and best for overall campus morale."

Creativity Is Welcome

With the business officer's role recast as a business adviser to the president—as well as other university leaders looking for guidance and support—higher education is following in the footsteps of the for-profit sector, according to Lammey. He says, "For a long time, a CFO in a commercial business has been expected to evaluate different financial challenges, identify potential solutions, and help make the best business decisions. Colleges and universities need the same type of creative business leader."  

Several years ago, for instance, budget reductions at Transylvania University in Lexington, Ky., had led to the decision to not fill the vacant position of events coordinator. "[But] our major university events didn't have the same look and feel as they did before, so the cabinet decided to reinstitute the position," says Marc Mathews, Transylvania's vice president for finance and business. With no new funding, however, Mathews had to exercise some creativity.

"I came up with a methodology to charge a little bit to each of the major programs that the events coordinator would be facilitating, so each cabinet member would contribute to supporting the position," Mathews explains. "The key was not to stop at, 'No, we don't have any money,' but to keep looking for a way to accomplish the goal." In the end, the vice president of marketing retooled an open slot to fund the events coordinator position.

Just having the vice president of marketing at the cabinet table is a relatively new development for Transylvania, which has expanded its cabinet from five to eight members within the past few years. Other newcomers represent information technology and athletics. "One hundred percent of the university's budget points to this collection of people, so I am always having conversations with everyone about helping them accomplish their goals within their respective budgets," says Mathews. In other words, his role has not only expanded, but so has the number of C-suite colleagues with whom he interfaces regularly and works closely.

One Needs the Other

In her 30 years in higher education finance, Mary Lou Merkt has experienced the CBO transformation firsthand. Now vice president of finance and administration at Furman University in Greenville, S.C., Merkt ticks off a list of developments that have made collaborating with multiple cabinet members imperative: a heavy reliance on tuition and fees, fundraising aimed at reducing that reliance, living/learning concepts and facilities, the pressing need for talent management and succession planning, enterprise risk management, and faculty/staff relationships, to name a few. 

"Programs in all these areas fit into the whole institutional strategy, so how can you possibly ignore any of them?" says Merkt, who serves on a cabinet that also includes Furman's athletic director and—in a nod to the university's faith-based beginnings—its chaplain. While she spends the most time with cabinet members representing academics, student life, and enrollment management, Merkt keeps in touch with areas such as communications and advancement so that she is ready to assist when Furman plans a new marketing effort or capital campaign.

Fostering such institutional interconnectedness—and understanding how all the program pieces fit together—leads to more cohesive strategies and maximized results, says Tracy Filosa, co-head of the enterprise advisory group of Cambridge Associates, an investment advisory firm based in Boston. At one private university embarking on a capital campaign, she has seen the fruits of collaboration between the vice president for advancement and the chief business officer.  

"Early on, the chief business officer was part of conversations about the right mix of new capital, such as how much to designate for the endowment, for facilities, and for operating, so advancement could tie their asks to strategic initiatives," Filosa says. In turn, the finance office was doing financial modeling of the staff and research investments needed to support those advancement goals. By working together, Filosa adds, they devised a feasible multi-year capital and operating budget that furthers the work of both divisions.

For years, the finance and enrollment management areas at Marquette University, Milwaukee, have collaborated on achieving their goals. As John ("Chuck") Lamb, vice president of finance and treasurer at Marquette, notes, "The finance area has to be in sync with our enrollment goals regarding net tuition revenue and the quality and diversity of our students. We couldn't do one without the other."

Traditionally, Marquette's enrollment management strategy team has included Lamb, the provost, a dean, and the vice president of advancement or marketing. Their collaborative approach trickles down to the tactical team, which meets every two weeks to focus on implementing the enrollment goals established by the strategy team.

Getting Along Famously

"Collaborations grow out of relationships-and you have to invest time to develop those relationships one on one, outside of regular cabinet meetings."

– Mike Frandsen, Oberlin College

Of course, not all collaborations happen on a large scale or relate to significant chunks of an institution's revenue. At Oberlin College, Oberlin, Ohio, where he serves as vice president for finance and administration, Mike Frandsen is working in tandem with the college's communications office to implement a new Web content management system. He was also asked to serve on the college's search committee for a director of career services.

"Collaborations grow out of relationships-and you have to invest time to develop those relationships one on one, outside of regular cabinet meetings," Frandsen says. Here are some tips for investing that time wisely.

  • Meet regularly. Marc Mathews takes the initiative to schedule lunch with each of Transylvania's eight cabinet members every few weeks, always at an off-campus location. "We go Dutch treat for a catch-up lunch, just to talk. The lunches help me understand the goals that the other cabinet members are trying to achieve and, outside of a crisis situation, start formulating ways the university may be able to fund those goals," he explains.

Mary Lou Merkt keeps a running list of topics to discuss with cabinet members so their time together, no matter how casual, still has some structure. "Each cabinet member has 48 hours of work to do in 24 hours," she says, "so you have to be respectful of their time.  

"Spending one-on-one time with your colleagues in the cabinet will always pay off, either in five minutes or five years," Merkt continues. For example, as part of a cost-reduction exercise, she met with the other vice presidents to review options for reaching the target budget. To keep cabinet members focused on Furman's goal, she often asked, "Are you sure students want to pay for that?" 

"When we all got around the cabinet table, I pointed out that we could preserve a lot of personnel if we cut the annual stipends we paid for personnel to have cell phones," Merkt recalls. "Over the years the list had really grown, and most people now have personal cell phones." After much discussion, the cabinet members—perhaps influenced by Merkt's student-centered question—voted to eliminate the stipends.

  • Leave your office. Mathews appreciates how his lunches with cabinet members break what can be an isolating cycle of office meetings and phone calls. He also fights the temptation to rely heavily on e-mail, where the tone is often open to interpretation, preferring instead to drop in on colleagues for face-to-face conversations.

Both Mathews and Ken Long favor an open-door policy when in their offices, believing it encourages interaction and information sharing. At ESU, Long notes, the president actively promotes such ad hoc get-togethers, so cabinet members don't miss opportunities to capitalize on news or information that may become stale by the next cabinet meeting. 

  • Attend campus functions. While out and about, make an appearance at staff appreciation gatherings, faculty meetings, athletic banquets, and so forth. "You'll eat a lot of chicken dinners but, by your presence, you'll show you care about those programs," observes Merkt.

"Insert yourself into their worlds, so they can see you're making an effort to understand what they're trying to accomplish as academics," says Bob Lammey. Then, he adds, you're more likely to be asked for input when other cabinet members are thinking about a new program or initiative.

  • Teach a class or a course. Want to boost your credibility with faculty? Put yourself in their shoes, either by making "guest appearance" lectures or sharing the teaching load for an entire semester. And if no one invites you to teach, says Merkt, raise your hand and volunteer.

"By being in the classroom, you can see what works and what doesn't. For example, you may find out why the faculty complains so much about IT in the classroom," she notes. "Plus, it puts you in touch with students, which is immensely helpful for focusing on the critical mission on campus."

  • Demystify the financial realm. "In finance, we sometimes make things overly complicated and fall back on acronyms and rules of thumb. But we should boil finance down to the basics people need to know to manage their area: cash position, endowment, debt, operating income, and capital budget," Marquette's Lamb recommends.

Lamb prepares a financial briefing book for each new cabinet member, customized for his or her area. Also, as part of a financial literacy initiative aimed at the entire campus community, Marquette now releases an interactive dashboard every month that provides easy-to-understand explanations of the university's key financial indicators. 

Similarly, Frandsen has developed a presentation on Oberlin's financial picture—operations, capital, and investments/endowment—that he routinely delivers to board members, alumni, faculty, and students. While Frandsen uses plenty of pie charts to provide a baseline understanding of the college's financial model, he purposely stays away from financial statements.

Another option: Encourage cabinet members to take an introductory course in higher education finance, or to study A Guide to College and University Budgeting (NACUBO, 2012), available at www.nacubo.org.

  • Expand your knowledge. On the flip side, make an effort to know more about your colleagues' areas—and learn their jargon—by sitting in on meetings and showing genuine interest in their programs. "You don't have to become an expert, but at least become conversant in the basics of their business, such as how advancement goes about its research process," suggests Tracy Filosa.

Showcase your collaborations. Whether you're presenting information to faculty, students, parents, community members, or even other business officers, team up with another cabinet member who played an integral role in the project or initiative. Simply preparing a presentation together will foster further collaboration, and your institution's reputation will benefit from the public display of partnership. 

The same goes for presentations to the president, says Merkt. Recently Furman's finance and student life divisions jointly hired a consultant to evaluate the university's residence halls and develop a plan for enhancing campus life. Merkt, who pitched the plan with her colleague, notes, "Presidents appreciate seeing cabinet members working well together." 

  • Guard your integrity. "Be honest and fair regardless of whom you're dealing with," advises Ken Long. "If you don't know something, say so. If something is, or isn't, your decision, say so. The other cabinet members may not like your answer, but they'll respect your truthfulness."

To have any hope of collaborating with your colleagues, you always need to have one another's backs, adds Merkt. If, for example, you overhear or see something happening in another area that needs to be addressed, she says, "You must address the other vice president directly, rather than going to the president behind your colleague's back."

As the CBO's sphere of influence has expanded on campus, the bean counter image has been firmly replaced by the idea of a trusted business adviser, the person who knows the ins and outs—and the hows and whys—of institutional strategies, operations, and finances well enough to guide others to effective decisions. Facilitating conversations and collaborations, however, exerts its own pressure on financial leaders more accustomed to focusing on numbers.

"You can't be concerned about just what you do—now you need to be out there talking to colleagues, sharing information, and trying to understand their perspectives," says Lamb, a 39-year veteran of Marquette. In fact, when Lamb hires for the university's finance division, he looks for people who demonstrate solid interpersonal skills as well as a grasp of Marquette's mission.

"You can be the best accountant in the world, but it won't mean anything if you can't relate to people," Lamb concludes. "In finance, we're not about the numbers or the bottom line. We're really driven by people—the students, the alumni, the faculty, the staff."

SANDRA R. SABO, Mendota Heights, Minn., covers higher education issues for Business Officer.

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The New Kid in Town

Ken Long began his career in higher education in 1987, as an assistant bursar, and over the years has held a variety of financial positions at large, small, research, and proprietary institutions. Now vice president of administration and finance at East Stroudsburg University, he was the first new cabinet member appointed by the university's new president, Marcia Welsh. 

"It's no different than coming into any organization," Long says of joining a cabinet. In addition to becoming familiar with the people and organizational structure, he adds, "You'll have to listen a lot and quickly come to understand the culture—is it designed around discussions, meetings, and regular interactions, or is there a top-down approach to resolving issues?" For example, Long continues, "It's rather routine for Dr. Welsh to stop in my office at the end of a day to get my input on a situation—and, in most cases, the situation has little to do with the university's finances."

Many institutions invite incoming cabinet members to attend one or two board meetings before their start dates, which helps build familiarity with faces and group dynamics. But, says Long, "Until you get boots on the ground, you can't truly appreciate the organizational culture and the obstacles or opportunities that culture creates." 

Early on, he recommends reviewing how major decisions were made in the past, such as the implementation of an integrated system, and how the institution handled it. For example, which committee, division, or person made the decisions? How was the change introduced? What new processes were put in place—or did the institution retain many of its former processes?

"An organization's processes and practices will tell you a lot about its culture and preferred way of doing business, including how it deals with change on the whole," Long notes. For instance, another staff member once told him, "You'll probably be here a few years and move on, so the rest of us will just wait it out."

That's not to say you shouldn't initiate changes that, from your fresh perspective, would improve a situation. Just be cautious about making too many changes, too quickly, which might give your new colleagues and others the perception that you think you know more than everyone else and that everything that was done before you arrived was wrong. 

Long advises, "Focus on the commonalities, where you can work with your colleagues to resolve or mitigate any problems—such as streamlining the registration process or improving academic facilities. This will foster positive good will and a better understanding of one another and highlight the goals you share. And it will help establish a better foundation for those situations where you may disagree."

One benefit of being new is the accompanying "honeymoon period," notes Mike Frandsen, who joined the cabinet at Oberlin College a year ago. He quickly discovered that most of the college's divisions did not typically spend all of their annual allocations of capital funds, designated for purchasing everything from microscopes for the science labs to new bassoons for Oberlin's Conservatory of Music. At the same time, the cabinet had identified the need to upgrade Oberlin's website, but funds weren't available.

Early in his tenure, Frandsen met individually with the division heads and encouraged them to "donate" their remaining allocations to a pool for funding the Web upgrade. He assured them the new fiscal year would bring a replenishment of capital funds. "The timing was good; I was new and so were two deans," explains Frandsen. "We successfully freed up resources allocated to divisional purposes to fund an institutional purpose that everyone agreed was a high priority."

That early achievement bodes well for continued collaboration. Frandsen adds, "Cabinet members now recognize that, when a collective institutional need arises in their own area, others will be willing to help out and even sacrifice to fund it."

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