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Business Officer Magazine
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Break Out of the Ho-Hum Cycle

Representatives of institutions honored with NACUBO’s 2007 Innovation Award explain how to overcome inertia, spark creativity, and celebrate new approaches.

By (edited) Margo Vanover Porter

Professional development does more than spur the thought process, suggests Ron Coley, associate vice chancellor, business and administrative services, University of California, Berkeley. “Staff development is the engine that drives improvement, innovation, and excellence,” says Coley. “In the units that report to me, we have established an expectation that all staff complete at least 100 hours of training each year. This professional development has helped to transform Berkeley’s administrative culture into a more vibrant and supportive environment.”

Along those same lines, Don Bagby, director of facilities management, Baylor University, Waco, Texas, has just the ticket to rejuvenate your enthusiasm. To break out of a ho-hum cycle—and discover the latest trends in higher education—he recommends that you attend a conference, read a professional journal, or swap experiences with a peer. Then ponder what’s been presented or discussed. “Technology, materials, services, and systems are changing and progressing so quickly,” he says, “that we must constantly keep the newest and best in front of us. Of course, taking the time to dream up ideas needed to apply or implement that new information is a critical component of success.”

To stimulate creativity at his institution, Steve Kreidler, executive vice president, University of Central Oklahoma, Edmond, urges business officers to go beyond their ivy-covered buildings for input. “UCO has gained a reputation for innovation,” he says.  “Nearly all of that innovation has come from seeking best practices from outside of higher education. Because so many other kinds of businesses have different ways of measuring success, such as shareholder or owner income, they often have radically different ways of solving problems.”

These executives represent the institutions—Baylor University; University of California, Berkley; and University of Central Oklahoma—that were selected to receive NACUBO’s newest award. Introduced in 2007, the Innovation Award recognizes institutional innovation in business and financial management. (See “NACUBO News” in the September 2007 issue of Business Officer for a description of the award and an overview of the projects that garnered recognition.)

Here, Bagby, Coley, and Kreidler share with Business Officer their thoughts on the drivers of innovation, the barriers to creativity, and the ways to develop the kind of environment that emboldens those who dare to be different. (To hear from the recipients of NACUBO’s 2007 individual awards, see “Ways to Work the Problem,” in the January issue of Business Officer.)

Barriers and Boosters

What is the biggest obstacle to innovation in an institution?

Introducing Innovative Leaders

Representatives of the institutions honored with the NACUBO 2007 Innovation Award talk about ways to create campus environments that stimulate creativity.

Don Bagby, director, facilities management, Baylor University, Waco, Texas

Ron Coley, associate vice chancellor, business and administration services, University of California, Berkeley

Steve Kreidler, executive vice president, University of Central Oklahoma, Edmond

Bagby: Typically, the point of greatest resistance is the tendency of the administration to move slowly with new ideas. Fortunately, I have not found that to be the case at Baylor. Besides authorizing the recent 10-year energy purchase related to our receiving the innovation award, Baylor administrators provided a lot of other support. For example, they gave approval to build and operate an on-campus substation, implement a holiday energy-curtailment program, and purchase and install state-of-the-art central boilers that provide heating throughout the campus.

Kreidler: I expect that the answers many would give relate to inertia or to campus cultures and bureaucracies that inhibit innovation. However, I actually think that the biggest barrier is something different: In general, most of us limit our approaches to problem resolution. We tend to treat symptoms rather than their underlying causes. That’s because it’s often easier to treat symptoms; they typically are easier to spot, and the treatments tend to work quickly. The problem is that we don’t always get lasting results.

On the other hand, innovation attacks the problems behind the symptoms. Creative solutions come from digging deep enough to understand the basis for the pain that we are experiencing at our institutions. So, we must encourage our problem solvers to get at those root causes and then give them the tools to fix what’s wrong.

Here’s an example. For years we had been tinkering with our annual budget development process in an effort to meet the university’s ever-shifting priorities. After repeated failures (but each a learning process) in meeting that goal, we realized that we were only treating symptoms. We created an 18-month Financial Macrosystem task force, a team primarily of users—not developers—of financial resources and budgets. That group is recommending sweeping changes in how we source and use funds; how we provide incentives, rather than disincentives, to drive desired financial results; and how we tie results to additional resource allocations. It’s an enormously different approach for fixing the problems (the entire way we deal with money) rather than the symptoms (how we fill in boxes during budget development).

Coley: The biggest obstacle to innovation is grounded in our reluctance to ask and answer the question, “Why?” When we ask the “why” question often enough—and at many levels—the answers can reveal flaws that compel us to consider alternative ways of doing things. Often, such revised processes result in increased transparency and positive outcomes, eliminating the need for clarifying “why” something is done.

For example, too often we consider that we have managed our financial resources well if we have remained within our allocated budgets and spent our resources in compliance with university policies and state laws. By contrast, at Berkeley, our business and administrative services departments dared to ask why these are the only defining standards for fiscal responsibility. Why shouldn’t we augment these standards with an expectation to also generate revenue? We answered this question by accepting the challenge to identify revenue generating opportunities, which have subsequently resulted in several million dollars in new revenue over the past five years. Examples of related innovation include: creating a U.S. passports processing program in the recreational sports area; securing grants to support work in the physical plant and the environmental health and safety departments; development of a printer-copier-toner recycling program in mail services; and, of course, securing the grant from the Federal Emergency Management Agency for the development of the Berkeley Continuity Planning program, for which we received NACUBO’s innovation award.

What part does failure play as a component of innovation?

Kreidler: I haven’t yet thrown a party for a failure, but I should. Failure in our organization is not punished. It is accepted as a vital part of the system that encourages revolutionary, not evolutionary, change.

As many of my colleagues from around the nation have discovered, the ways that we have conducted business in the past are not working well today—and certainly won’t work in the future. Our revenue structures are radically different than before yet still not varied enough to sustain our needs. Our compensation systems have changed from traditional paychecks to market-based—and increasingly merit-calculated—programs. If we don’t try more modified approaches such as these—and quickly—we will not serve our students well with the wisest allocation of resources.

At the same time, trying new ways requires that we take chances, perhaps even big risks, in tackling underlying problems. We will fail along the way. But we must recognize that we can learn from those failures, eliminate the wrong turns on our path, and persist in finding alternatives that will lead us to achieve our goals.

Bagby: Failure can be a motivation factor that propels an individual or institution to take a huge step forward instead of small, safe steps. Small steps equate to improvements. Huge steps seem to lead to innovation.

Coley: Failure is a critical component of innovation for two fundamental reasons. First, and foremost, failure helps ward off complacency. In that way, it inspires us by reminding us of that which we have not mastered. Secondly, failure provides an opportunity for serendipity—the fortuitous discovery of the unexpected.
 
A striking example of the benefit of failure is illustrated by the several-year cultural transformation that has occurred in the administrative areas at UC Berkeley. Not long ago our business and administrative services departments behaved as though each unit was an individual service provider in a shopping mall. That is to say, each was singularly focused on providing exceptional service in its respective area of responsibility—with no thought of how things fit into the total operation. Numerous failed attempts were made to modify this perspective to one of shared accountability. The goal was not unlike the often touted “Nordstrom” service model, in which excellence is not defined by the success of an individual department, but, rather, by the effectiveness achieved when departments acknowledge and embrace their mutual dependency. Through both failure and persistence, we’ve evolved to the point that allows for integrated strategies. We’ve been able to significantly improve our use of available resources while substantially increasing the satisfaction of the customers we serve.

How can business officers create an environment that encourages innovation in their institutions?

Submit Your 2008 Innovation Award Nominations Now

The NACUBO Innovation Award seeks to honor the achievement of higher education institutions within each of NACUBO’s primary membership segments (community colleges, small institutions, comprehensive and doctoral institutions, and research universities). The award recognizes innovation in the specific areas of process improvement and revenue enhancement.

The NACUBO Awards Council defines a “process improvement” as a program that has been successfully re-engineered, improving a service or administrative activity in response to a campuswide need. A “resource enhancement” is defined as a process that has helped a college or university substantially reduce costs, increase revenue, or enhance productivity, making a campus-wide impact.

Only NACUBO regular member institutions are eligible to receive the NACUBO Innovation Award. For a complete overview of the innovation award and application requirements, visit www.nacubo.org/awards.

Nominations must be postmarked by April 11, 2008, for consideration. Direct your questions regarding the NACUBO Awards program to the NACUBO Community and Member Services department at 202.861.2560.

Bagby: Being flexible and open to new, unusual, or out-of-the-ordinary ideas can be beneficial to the creative process. Allowing freedom to explore those ideas and providing the time required to break out of the day-to-day business of keeping a campus running are practices that cultivate an environment for innovation. Fighting the business-as-usual attitude is the first step in motivating professionals to adopt an innovative attitude.

Kreidler: It helps to take some risks yourself. Set an example. Try a couple of things that work and some that don’t. Then, don’t beat yourself up, but laugh at the failures while trying the next potential solution.
 
Another recommendation: Find a true problem that needs resolution, but one that isn’t too hard to repair. Get a lot of helpers around the table so they can experience the thrill of a win together. Once people are part of an innovative team, they feel confident that they can lead their own such teams.

We did something like this to address the painful length of time it took us to process work orders. I knew that by using “Lean” improvement techniques we could reduce nonvalue-added steps and respond more quickly to concerns of campus clients and staff. Our clients and front-line, physical-plant workers got together and used the Lean model to make wholesale changes to our work-order system—and implemented the new process within one week. The results: The number of backlogged work orders fell from 3,000 to 300, while the waiting time for a service call was reduced from weeks to hours. We saved enough effort to reallocate to another area on campus our one staff position that had been focused solely on processing work orders. That quick win has led to dozens of Lean process improvements on our campus, which have freed up thousands of work hours and saved hundreds of thousands of dollars.

Coley: To inspire creativity, you have to model it. Start with yourself and the operations within your sphere of responsibility and influence. Next, you have to have the courage to lead. In other words, you must take every opportunity to inspire people to make it better, whatever “it” is.

Finally, you must reward innovation—whether it leads to success or failure.

Accomplishments and Enhancements

What was the reaction from colleagues on your campus to the idea that was eventually recognized by the NACUBO Innovation Award?

Kreidler: From the start, we experienced nothing but support from across the campus. We maintain a strong connection to all administrative programs, which results in a positive impact on our students. The project recognized by the NACUBO award involved—among many environmental sustainability programs—the switch to campus-refined biodiesel fuel and our investment in wind energy. Everyone was thrilled to help us design, build, and implement a world-class energy program that is environmentally friendly.

Since implementation, students, faculty, staff, administrators, city officials, and alumni have offered even more assistance. They continue to identify and facilitate additional sustainability efforts. In that way, we continue to grow our green campus and our environmental sustainability programs.

Bagby: The reaction was consistent with Baylor University administration’s history of supporting innovative ideas related to facilities management. We were among the first Texas universities to install co-generation capabilities on campus for generating electricity. So, we felt no resistance to the idea of enhancing that work. As a result of our cost-effective purchase of electricity and the support of Texas wind-farm financing, we are helping the environment while enjoying a low electricity rate. 

Coley: We started talking about business continuity planning at Berkeley more than 10 years ago, because our campus lives on an earthquake fault. We have been spending major dollars on seismic reinforcing of our buildings for 20 years. In 1997, our chancellor partnered with James Lee Witt, President Clinton’s FEMA director, in starting a nationwide program called Disaster Resistant Universities. Consequently, our campus has maintained a readiness for taking actions to minimize the impact of a disaster and reduce the recovery period.

If you could, what would you do differently to improve the process—from idea to implementation?

Bagby: I would have started the project coordination sooner. The process went remarkably well, considering that so many players took part in the development and implementation of the electrical energy purchase. The idea for this project was born of necessity. Our electricity rates were increasing, and we recognized the need to focus on conservation and procurement strategies to reduce our exposure to future budget shortfalls. Identifying the stakeholders and pulling them together right away to focus on the task at hand would have moved things along even faster.

Coley: Nothing really comes to mind. We gave this question continuous thought throughout the process and took corrective action in every instance at which we thought improvement was possible. I’d suggest using this technique to keep projects moving while adjusting to changes along the way.

>>>Conversation Starter
What processes or attitudes at your institution or in your department encourage people to think differently? What specific ideas have led to solutions or improvements?
E-mail: carole.schweitzer@nacubo.org

Kreidler: We could have included more stakeholders earlier in the process. We would have greatly increased the efficacy and efficiency of our early programs had we included external stakeholders like the City of Edmond Urban Forestry Board, the local Sierra Club chapter, and Keep Oklahoma Beautiful. Each of them has subsequently become an important resource for our efforts. We made a poor assumption that our on-campus efforts were only important to our students, faculty, and staff. We found that many other stakeholders care about our efforts to leave behind a better planet.

How can business officers obtain buy-in from stakeholders for innovative ideas?

Coley: When seeking endorsement from all interested parties, business officers must become adept at making a persuasive business case for their creative ideas. Would-be innovators must persuade stakeholders of the value proposition for any innovation.

Kreidler: A simple answer: Don’t ever take personal credit for innovative ideas.

MARGO VANOVER PORTER, Locust Grove, Virginia, compiled and edited this article for Business Officer.