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Data Point the Way

Together, the CBO and CAO can use data-driven decision making to take aim at the institution’s strategic goals.

By Margo Vanover Porter

*You can't make institutionwide data-based decisions by yourself ... and you shouldn't try. That's the advice of chief business officers who—in unison with their chief academic officers—have successfully integrated the framework, methodology, and metrics associated with data-driven decision making on their campuses.

Often referred to as performance management, business analytics, or business intelligence, data-based decision making uses a set of integrated processes to address financial as well as operational activities. Core processes include financial and operational planning, consolidation and reporting, modeling, analysis, and monitoring of key performance indicators that are linked to the institution's strategy. 

Read An Online Extra

For a summary of discussion at the October 2012 Ad Hoc Group on Performance Management, see "Charting a Data-Driven Strategy" in Business Officer Plus at www.nacubo.org.

Although considered part of the chief business officer's bailiwick, these functions extend deep into the hallowed halls of academia, where CBOs hesitate to tread unless accompanied by their chief academic officers.

There's a good reason for that, points out Craig Woody, vice chancellor, business and financial affairs, University of Denver. "The last time I looked, there weren't that many CFOs who have ever been a department chair or dean of a college," he says. "The chief academic officer has that background. When making decisions, you certainly want the impressions, experience, and nuances of someone who has done this for a living."

Ron Coley, associate vice chancellor, business and administrative services, University of California, Berkeley, wholeheartedly agrees. "The chief academic officer represents the raison d'etre for the institution," he says. "The chief financial officer represents a critical support function that manages resources so the academic officer can achieve responsibilities. Inextricably dependent on one another, they ought to have a symbiotic relationship." For more on how beneficial it is for the chief business officer and the chief academic officer (CAO) to work together, see "A Solid Front."

Start With a Plan

So how can these two chiefs put their heads together to make joint decisions for the good of the enterprise? It helps if your institution has a plan-driven approach to management, answers Hossein Sadid, vice president for business and finance and treasurer, University of Richmond, Virginia. 

"Everything we do is in the context of our five-year plan," he says. "For instance, our academic strategic plan, called the Richmond Promise, drives the priorities for us. A key component of finding data helpful in making decisions is having an environment that is plan- driven. Your plan should drive resource allocation and decision making, as opposed to the other way around. In that environment, you will find respect for the culture of data and information."

"The critical component is that every major initiative now has co-leadership that includes a senior executive from the administrative side and an academic dean."

Ron Coley, University of California, Berkeley

Tom Freitag, vice president for finance and administration, credits his institution's leadership for instilling a data-driven culture at Montgomery County Community College, Blue Bell, Pennsylvania. "Our president, who has a data-driven approach to decision making, made sure we invested in the data infrastructure on the academic side and is making a similar investment on the administrative side now," he says. "I'm fortunate to work with a person who wants to invest in the data analyses and the infrastructure necessary to do that."

The community college is currently analyzing the data behind a steady upward trend in online education. "The world around us—and students—have made a decision to choose online education," he says. "It is growing in our world faster than our traditional in-seat enrollment. We're using analytics to look at what's happened, project what we think is going to happen, and put together financial scenarios that allow us to make strategic decisions with guidance from our board on how we make investments for growing online education."

According to Freitag, the leadership team collectively establishes the institution's goals, ensuring that he and the provost are trying to achieve the same objectives. "We as a leadership team establish our goals together so it's not the provost saying, 'Here are my top 10, and by the way, these don't relate to your top 10.'"

Sharing Ownership

Ron Coley believes that shared ownership of goals is one reason that Berkeley's current performance management initiatives are succeeding when earlier initiatives were only marginally successful.

"The critical component is that every major initiative now has co-leadership that includes a senior executive from the administrative side and an academic dean," he says. "When we go forward, it's amazing how the waters open. Having leaders from both sides produces a sense of shared ownership that has resulted in extraordinary success and buy-in for us."

The data-driven process, which at Berkeley is called Operational Excellence, explicitly does not apply to teaching and learning, only to administration—both academic and nonacademic. "It's important for the academics to know that we're not trying to play in their sandbox," Coley explains. "Operational Excellence does not apply to how they do research or how they teach, but it does influence how they support those efforts. We can do whatever we want on the business side, but until the academics see it as a joint priority, it just isn't going to happen."

External factors drove Berkeley to implement Operational Excellence. "While we should always use credible data to make decisions, what's driving it now is the environment in which we find ourselves," Coley explains. "Unfortunately, we ignored our infrastructure for a long time. We had under-resourced it to the point that our administrative services were beginning to undermine our ability to conduct research and teach. Rather than consider this strictly an administration problem, we decided it was a total university problem."

With those factors as the impetus, leaders invited an outside consultant to conduct a diagnostic, which identified several dozen areas of concern. Berkeley chose to pursue seven initiatives. "We had a clear target of saving $75 million annually, and we were willing to invest 
$75 million one time to make that happen. We created an infrastructure with a program office to manage the change process, which was absolutely essential. Although we were late coming to the party, we realized that this change management stuff is not just hocus-pocus." 

Two of the initiatives dealt with access to financial information and campus culture. "One of our enabling initiatives is to actually be able to see and understand our financial information in ways we can make decisions. The university is a $2.5 billion operation, yet we have to make that statement. Because we have already established a sense of trust with our departments, academic and otherwise, there was less threat in seeing inside that black box. 

"Another core initiative is to create a high-performance culture," he adds. "We're still trying to figure out how to dance to that tune."

Partners to Provosts and Presidents

To collaborate on strategic issues that span both sides of the institution, business officers must first establish a solid partnership that is based on integrity and trust with their chief academic officers. "I could have the best data and metrics in the world, but if the provost doesn't trust me, or vice versa, it isn't going to do any good," says University 
of Denver's Craig Woody, who reinforces the values of trust and integrity in conversations with his CAO and peers throughout the year.

Ten Critical Components

What will it take to infuse data-driven decision making into your institutional culture? Business officers 
who have implemented game-changing initiatives recommend the following:

  • Develop an academic/business partnership.
  • Communicate to stakeholders continuously.
  • Produce transparent financial data for use institutionwide.
  • Instill a high-performance culture within the institution.
  • Invest in outside change management expertise.
  • Set up a program office to monitor progress.
  • Convince top leaders to support and defend the process.
  • Tie measures to goals and hold people accountable for them.
  • Use validated models for regressions and comparisons.
  • Create standards of practice.

"Whether we're in the developing or monitoring mode of our budget, our bylaws provide that we have to work together toward the ultimate university goal, which is not resource allocation or financial reporting, but it's to have the budget reflect the institution's priorities and mission. That's what it's all about. To assume that finances drive program is a mistake," Woody says. "The loci of responsibility for that would be the chancellor and the provost. Finances support the mission, not the other way around."

In addition to the provost, business officers had better be able to count on their president's support when building consensus for using business analytics across the institution. "Business officers can't do it alone," Coley emphasizes. "They need to accept the fact they don't have the juice to make most of this stuff happen. This can be successful only if the chancellor or president is fully invested. That's Leadership 101. 

"You can get lip service, you can get marginal accomplishments, you can get people to stop whining, but to move to the upper reaches of what is possible, your leader must be fully invested and engaged."

He explains that until recently, Operational Excellence topped the agenda of every cabinet meeting for a year and a half or more, which had a cascading effect on the priorities of everyone in the leadership chain. "If you don't have the ultimate leader committed to this, all you will be able to do is trim around the edges," he says. "There are tens of millions of dollars in academic administration, and it's almost impossible to reduce those costs unless you get a president or a chancellor who is willing to take that on as a priority."

Practice Diplomacy

Married to a provost at another institution, Coley has learned the art of administrative-academic diplomacy. "Approach academic officers in a way that indicates you are here to help," he suggests. "Show them credible data about the current state of the enterprise. Ask them if they want more detail and if so, what data would be relevant to them? You need to recognize that these folks are brilliant in their own right. Ask 'What would you want to have happen?' and then help them achieve that vision." 

For example, in a meeting with the chief academic officer, he might explain how faculty would benefit by adopting a procurement change with this reasoning: "Is it better for Berkeley to spend less money, let's say $40 million a year, in procurement, than for you to keep doing your own thing? If you continue doing your own thing, you can continue spending what you're spending, but if you engage in this program, we can reduce the university's operating cost for procurement by $40 million. That $40 million does not come to Ron Coley. That's money that you can reinvest in faculty and students."

Walk Awhile in Their Shoes

What other steps can you take to collaborate with your CAO and create a long-term vision and strategy for your institution? Business officers share five ideas:  

  • Leave your biases behind.  When you meet with the CAO to discuss priorities, don't let preconceived notions, perhaps about generating as much surplus as possible, get in the way, urges Sadid. "That can be a nonstarter," he says. "Obviously, finances are important, but you should start with what makes sense programmatically and strategically for the institution and then scale it to fit within financial confines. One of the mistakes CBOs and CFOs make is that they go into discussions with set parameters, which is not conducive to collaboration and exploring all of the options." Natalie "Nikki" Krawitz, vice president, finance and administration, University of Missouri System, Columbia, concurs. "The CFO often comes with a particular lens," she says. "We look at things from a business finance perspective. The academic side of the house is being driven by a different set of metrics. Try to put yourself in their shoes," she suggests. "I have an advantage because I've been on both sides. I was a faculty member at another institution so I understand what drives faculty. It's important for the CBO to get out there and understand why faculty members think the way they do."
  • Pick your battles. Krawitz reports that even though she has a good relationship with the chief academic officer, she hasn't been able to settle every skirmish. "I can think of a situation, for example, where we had implemented at the university an e-procurement platform and were using data to monitor use of the platform," she says. "On one of our campuses we identified a unit that was creating its own contracts with vendors and had its own store operation. I went to the chief academic officer on the campus and said, 'We've got this situation. Our procurement people haven't been successful at getting them to work with us to leverage the contracts we have. I need your help.'" Unfortunately, she says, the chief academic officer on that campus wasn't willing to enter the fray because he had many other challenges to address at the time. "The chief academic officer has to carefully select which issues to work on," she says philosophically, "and sometimes there is a lack of alignment between the chief business officer and chief academic officer because each has different priorities."
  • Offer alternatives. In addition to asking how you can be of service, give the provost choices after you provide the data, Krawitz suggests. You might say, "We can spend $10 million on administration or we can spend $10 million on faculty salaries." Laying out the trade-offs is a key step in the process, she says. "Sometimes we don't do a good job articulating the choices. We may not like the decisions that are made, but our responsibility is to present the options with good supporting data so everybody understands the trade-offs." 
  • Communicate more than you think is necessary. "You can't communicate enough," Coley says. "No matter how much you do, you need to do more. You need to communicate with people where they are, using an array of different means. It may take multiple messages, not just at different times, but sometimes saying the same thing in different ways. You have to communicate to each individual in each department, where each is in the evolution of dealing with this kind of change. Change is very personal to people." 
  • Tackle the culture early. If he had it to do all over again, Colely would have advocated even more strongly for making the cultural change the first initiative to be tackled by Berkeley.  

"You have to realize this really isn't about the data," he says. "It's not about the metrics. It's about the people. It's about transforming the culture. You have to change the psyche. You have to change the value of collaboration. Once you do that, if you do it well, people will begin to behave in ways that your objectives can be achieved. What happens too often is we see a burning platform so we say we have to save money and we're going to cut. We might save a million, but if we don't change behaviors, if we don't change the culture, the organization will be spring-loaded to go right back to where it was before."

In his opinion, cultures begin to adjust when faculty and staff stop performing mechanically and instead rely on their good judgment to make everyday decisions. "To do that, we have to show them respect and communicate that what we're trying to do is in their best interests and the interest of the institution," he says. "You can't get the type of change you want through coercion. You can have the right information, but people won't believe it without culture changes. If you can tap into the spirit and motivations of people, then you can create something the whole of which is greater than the sum of its parts."

MARGO VANOVER PORTER, Locust Grove, Virginia, covers higher education business issues for Business Officer.

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Moving Toward Data-Driven Institutional Success

As colleges and universities struggle to emerge from the Great Recession, business officers must develop a new dialogue, a new set of tools, and a new set of behaviors with data-driven outcomes for organizational success.

Last fall, NACUBO explored the status of this methodology among its members with two events. A webcast in early October, "Higher Education Analytics and Data-Driven Decisions," focused on how predictive analytics are driving institutional performance (find it in On-Demand Webcasts under the Distance Learning tab at www.nacubo.org). Shortly afterward, the association convened an Ad Hoc Group on Performance Management for a daylong discussion. Institutional participants in the event were:

  • Ron Coley, associate vice chancellor, business and administrative services, University of California, Berkeley.
  • Thomas Richard Freitag, vice president for finance and administration, Montgomery County Community College, Blue Bell, Pennsylvania.
  • Natalie Kellner, director, administrative data management, New Mexico State University Main Campus, Las Cruces.
  • Natalie "Nikki" Krawitz, vice president, finance and administration, University of Missouri System, Columbia.
  • Kathleen McNeely, vice president of administration and chief financial officer, National Collegiate Athletic Association, Indianapolis.
  • Rick Niswander, vice chancellor for administration and finance, East Carolina University, Greenville.
  • Hossein Sadid, vice president for business and finance and treasurer, University of Richmond, Virginia.
  • Craig Woody, vice chancellor, business and financial affairs, University of Denver, Colorado.

In addition, three representatives from NACUBO business partners contributed to the ad hoc group discussion, which was facilitated by Richard Katz of Richard N. Katz and Associates. The business partners—and cosponsors of the event—were Microsoft Corp., Ellucian Corp., and Nuventive LLC.

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