A Transforming Effect
West Virginia University embraced the tenets of transformational leadership to reinvent student affairs business operations.
By Ernest R. Goeres, Amir Mohammadi, and Marsa C. Myers
|Transformational leadership is a form of consensual or facilitative power that is manifested through other people instead of over other people. This leadership style has three elements: (1) a collaborative decision-making approach, (2) an emphasis on professionalism and empowerment, and (3) an understanding of change, including how to encourage change in others.|
The then-new university president, David C. Hardesty, Jr., and the university budget planning committee challenged the division to do two things: eliminate deficits and create reserves. Vice President for Student Affairs Ken Gray provided the leadership, support, and encouragement to meet this challenge. “Our responsibility to our students includes the correct management of our budget,” he explained. “We need to be creative in order to provide outstanding service while keeping costs to a minimum.”
Keeping with his vision of a student-centered institution, the president asked that existing resources and revenues (increasing student tuition wasn’t an option) be used more efficiently to create new student support programs. The division of student affairs rose to that challenge, and today, deficits, both real and anticipated, have been eliminated and sufficient revenues realized to meet the president’s mandate. How did this come about? Through restructuring of the units and re-engineering that included elements of transformational leadership, a close look at processes, and a particular emphasis on issues of specialization and centralization.
Much like the development of any college or university’s units, WVU’s 28 program and departmental units in student affairs were established as independent, more or less self-sufficient business operating units. In scope, they ranged from such diverse entities as student life and programs, auxiliary services, and enrollment management. Across time these units were reorganized and consolidated, but they still operated for the most part as self-contained business activity centers. The units operated individually despite the fact that most business operations were mandated by state and university policies and were uniform across the campus. In effect, these units operated as separate entities even though their business processes were the same. In addition, there was no formal structure for disseminating information to the unit level about ongoing business practices that would often change to meet state and university requirements. Employees were generalists dealing as best they could with a wide variety of complex business issues. Student affairs was not maximizing its resources, nor was it receiving the financial and operational benefits that a centralized, more specialized business operation could yield.
As the university moved to an entrepreneurial model of responsibility-based budgeting, driven in large part by continuous reductions in state support, it became critical for units in the university to become more efficient and cost-conscious. We had to establish priorities that were in line with the mission of our student-centered university. This was even more imperative for student affairs, a division in which many self-supporting auxiliaries operated, because it had to enhance its existing operations and position itself to fund new programs. At the same time, program deficits in several division programs had to be eliminated within a rather ambitious time frame. It was crucial that we identify programs that could generate revenue. Recruitment and retention, for example, were areas with the greatest potential of gaining a return on investments.
The Change Process
The restructuring process began in late 1996 using the tenets of transformational leadership, which is a form of consensual or facilitative power that is manifested through other people instead of over other people. This leadership style has three elements: (1) a collaborative decision-making approach, (2) an emphasis on professionalism and empowerment, and (3) an understanding of change, including how to encourage change in others.
Employee participation. First, a student affairs leadership team was established and led by the assistant vice president for student affairs for finance and administration. Other members came from the unit’s senior leadership level of vice presidents and assistant/associate directors. As part of its charge, the leadership team developed a broadly representative committee that was to function as a forum for generating and communicating creative ideas and improving business operations. The assistant vice president drew from appropriate leaders within student affairs who were asked to identify ways to increase efficiencies, eliminate problems and redundancies, and increase the accuracy of the business functions of the entire division, not just in each of its respective units. Committee members were asked to focus on how to seamlessly integrate the business operations of the division using the best aspects of centralization and specialization, with an eye toward increasing the “ownership” and empowerment of each employee in a newly shared re-engineering effort. The team’s far-reaching vision recognized the importance of centralizing the business operations while decentralizing the control of resources. The result of these efforts: the student affairs business office.
Each individual unit would continue to make its own decisions, but the new centralized business office would process all business transactions. One or more employees from each unit served as liaisons to the central business office, assuring that unit managers and directors were apprised of changes in procedures.
Centralizing the fragments. The centralized business office was introduced and developed in three phases, keeping in mind three considerations: urgency, importance, and ease of implementation. At first, phase one implemented the functions of purchasing, inventory control, accounts payable, travel management, payroll, budget development activities, general financial reporting, and internal training and development. Phase one continued with accounts receivable, billing, foundation transactions, and budget development activities. We selected these activities and functions as the first areas for centralization because they involved the tasks done most often by the most people. By beginning here, we immediately addressed aspects of efficiency and accuracy. Employees became specialists who could provide expert information about different processes to the entire division, ensuring that transactions and activities were performed in a uniform and policy-conscious manner.
In phase two the functions of human resources payroll, specialized financial reporting, and more training and development activities were added to the centralized business office. This occurred in conjunction with the implementation of Kronos, a human resource management software tool that includes payroll, time, and attendance systems technology. Kronos enabled the centralization of human resource functions for 2,000 full/part-time employees (including student workers and student affairs’ work study students) in the division. Student affairs was the first department at WVU to use this system, which is currently being phased in throughout the university. Finally, phase three included the development of administrative support systems that further enhanced the division’s information systems technology.
Many directors of the individual units were, understandably, apprehensive about losing control over their budgets, hence the phasing in of the change process. The directors began to understand the advantages of a centralized business office when they could maximize the use of budget funds (which always remained in their control) in a centralized purchasing program. For example, buying three new computers for one department didn’t save them money; however, by allowing the centralized office to purchase 100 computers at the same time, the directors saved money through bulk purchasing rates.
As these processes began to take place, the tenets of transformational leadership were revealed almost without effort. For example, this had less to do with positional authority than it did with the concept of interdependent work relationships. Core values that espoused the idea of efficiency and cost savings through co-generated budget control were not just theories. Rather, they became an application of day-to-day work processes. This organizational change theory granted the stakeholders a major concession that was critical for success: individualized control over the sub-layer of collective centralized business services. The stakeholders saw the positive effect on their budgets and the savings in their work expenditures, in terms of both money and human resource power.
After repeated reviews and modifications by the stakeholders in the operation of the division, the total reorganization of its business functions resulted in a formal plan. The plan was reviewed and approved by the director of the internal audit office and the chief financial officer and subsequently implemented by the student affairs division. This plan has been reviewed annually and formally modified as needed to meet changes in university and state regulations.
Changing role of employees. To what extent were the roles of personnel affected by these changes? First, as part of the new leadership paradigm, all were asked to assume a much larger role in the division’s operations by identifying areas that needed to be reviewed with an eye toward improving processes; streamlining operations; increasing responsibilities; and eliminating errors, redundancies, and bottlenecks. As part of this process, employees were given the latitude to determine their special skills and preferences for a narrower range of business activities. In short, they became specialists in fewer areas of business responsibility—a move from their previous orientation of being generalists in all areas.
Next, to enable employees to assume these new responsibilities and to meet these new expectations, we encouraged them to attend appropriate training and development activities sponsored by the university and senior leaders in the centralized business office. As employees learned new skills, they gained responsibilities as positions in the division became vacant and were eliminated. The department of human resources reviewed and updated these employees’ formal job descriptions accordingly. In most cases these reviews yielded position upgrades and associated salary increases.
Although low staff morale could have become an issue, employees formed more closely knit groups as new teams were created. An initial and natural reluctance to change and, in many cases, take on extra work, gave way to enthusiasm for the opportunity to learn new skills, have more ownership in processes, and specialize in more targeted areas. Overall, morale actually improved as self-esteem rose and work conditions became more comfortable. The outcome? Fewer employees are doing better and more challenging work and contributing more to the overall improvement of the operations. This progressive slant on business operations resulted in saved resources, reduced deficits, and enhanced financial status for the division—all accomplished without cutting programs.
In this process, not one person had to be let go. Even though the business operations offices became centralized, which eliminated duplication of services, the employees who left did so by choice through natural attrition factors, such as retirement and promotion or transfer to other positions within the university.
From Red to Black
The two biggest challenges we faced were the urgent need for immediate change and the need to keep the change process moving along while maintaining a participation mode. This was especially difficult because of the number of liaisons to the central business office. Those 60 individuals needed to be involved in communication efforts to serve as links between units and business specialists. These two groups, each of which was assuming different responsibilities and building new working relationships, found it difficult to make time for meetings, stay abreast of changes, and provide feedback on key issues. To remedy these problems, participants agreed early on that the agenda should supersede other time commitments and this project would take top priority.
A related difficulty involved scheduling face-to-face meetings (WVU has three geographic campuses). Technology including e-mail, listservers, and conference calls made communication possible among those who couldn’t travel to more traditional meetings. It is paramount that all stakeholders are involved in the process. Our approach—participation, patience, and persistence—takes a great deal of time and energy, but it is critical to engineering change in any organization.
Through the creation of one centralized business office with expert employees, we achieved the following customer/student-oriented initiatives:
- eliminated costly duplication of services;
- reduced or eliminated errors, thereby increasing accuracy;
- clarified and maintained clear lines of authority and responsibility;
- minimized the time and costs required to accomplish administrative tasks;
- improved customer service from adequate to excellent;
- clarified fiduciary responsibility for the use of public funds;
- continued training for business office staff, who now have the appropriate experience for their positions;
- delegated budget decision-making authority, where possible, to the lowest unit level;
- created a more challenging work environment and greater opportunities for career advancement for staff;
- allowed unit directors to focus on more strategic issues, such as program development and long-range planning; and
- established information systems that allow management personnel to make more effective decisions in a more timely manner.
Even though one might suspect that a centralized business office would only cut costs, the overall financial recovery has achieved much more than that. Saved resources allowed the budget to move from red to black, eliminating years of operating at a deficit. This restructuring, along with many other university-wide initiatives, also enabled student affairs to fund several new programs that have aided the recruitment and retention of new students.
Savings. In the past seven years, we reduced staffing without resorting to layoffs, which resulted in substantial salary and fringe benefits savings. Using the theory of specialization, we trained people to become specialists in certain aspects of business operations. Our 34 generalist positions were converted to 18 specialist positions with savings of approximately $300,000 annually, for a cumulative savings of more than $2.1 million dollars during this time period.
New programs. Several student-centered support programs have been created and are funded with the savings from the establishment of a centralized business office and help from other auxiliary centers. Students not only benefit from improved business services, they also participate in exciting new programs, some of which have received national recognition. WVU Up All Night, for example, was recognized on Good Morning America for its innovation and creativity in providing a successful weekend student program alternative to local bar-hopping.
We attained our goals by clearly identifying what needed to be accomplished in the beginning and then using proven management strategies to get there. By focusing on the principles of transformational leadership and rethinking old paradigms of financial boundaries, we not only eliminated deficits, we provided new programs and services to students. The initial challenge essentially boiled down to this: Can more be done with less? A “can-do” attitude and creative answers resulted in a resounding yes.
Author Bios Ernest R. Goeres is professor of higher education leadership studies; Amir Mohammadi is associate vice president for student affairs administration, finance, and technology, and chief housing officer; and Marsa C. Myers is senior program administrator and assistant to the associate vice president for student affairs at West Virginia University, Morgantown.
- IRS Releases Final Report on College and University Compliance Project
- NACUBO Seeks Input on Ethics, Fraud, and Controls
- FY13 Implementation Reminder for Independent Institutions
- 2013 Higher Education Accounting Forum
May 19-21, 2013
- CAO and CBO Collaborations: Leveraging Institutional Capacity to Impact Effectiveness
August 5-6, 2013
- 2013 Planning and Budgeting Forum
September 16-17, 2013
- WEBCAST: The Higher Education Accounting Forum Online
Wednesday, May 29, 2013 10:00 AM - 5:00 PM ET
- WEBCAST: Improve Your NFP Audit and Accounting Guide IQ
Wednesday, June 26, 2013 1:00 PM ET
- ON-DEMAND: OD: The Cashless and Paperless Business Office
- ON-DEMAND: Affordable Care Act: Implementation Roadmap for Colleges and Universities
- 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