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Business Officer Magazine

Words of Experience

When Business Officer asked how the recession has most affected chief business officers, you answered. Here is a summary of your collective thoughts, gathered in an e-mail poll.

Catalyst for Change - The Economic Downturn Reshapes Higher Education

Edited by Dorothy Wagener

*This year's recession series in Business Officer has examined the economy's impact on higher education and the forces that can drive transformational change—for institutions. We've reviewed endowment spending rates, staffing, academic options, collaborative relationships and consortia, and cost efficiencies of various kinds.

Here we offer a more personal focus: how the downturn has affected the role of the chief business officer itself. We went directly to our members to learn what is happening, and in an e-mail poll sent in November to 2,150 college and university chief business officers, we asked three questions:

READ AN ONLINE EXTRA with additional member responses in Business Officer Plus.

This informal poll provides a window into the chief business officer's experience, and the 67 respondents no doubt speak for many others. CBOs, like their colleagues in higher education administration, are challenged and stretched as never before.

“In some ways the role and responsibilities have not changed as much as become more intense and demanding,” said Phil Doolittle, University of Redlands, California, in his response. “Matters such as budget management, cash management, and strategic planning have become more important and more time-consuming. Effective communication with university constituencies has become even more important. Trustees have become more engaged and more demanding of information. Campus constituencies are concerned about the future. Everything is a bit more emotional.”

He continued, “The situation is testing our capabilities and resources, and the skills and experience of our people. Most people involved in the organization have never experienced an economic downturn of this magnitude. It is a new world for them.”

On the following pages, dozens of members testify to the “more intense and demanding” pace, and still more responses may be found in Business Officer Plus.

Many members also think the changes in their roles are likely to be permanent. But in spite of today's challenges, some see this time of testing as a passage to a more streamlined, efficient future.

“I never thought that an economic crisis of such enormous impact would happen so quickly,” said Janice Forsstrom, North Shore Community College, Massachusetts, or that it would “nurture a culture of utilizing 'green' principles in all aspects of an educational organization—and that I would play such a large role in this change.

“I've become more optimistic, even in the face of severe financial problems, that this convergence of needs and improved technologies may indeed bring about a different and better educational experience as well as efficiencies and effectiveness in operations.”

DOROTHY WAGENER is editor of Business Officer at NACUBO.

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Have your role and responsibilities as a CBO changed?

Expanded portfolio

Two middle manager positions reporting to me were eliminated in the budget process, so I now do the work that three persons formerly performed.

Scott Scarborough, University of Toledo, Ohio

We've adjusted from three vice presidents to two vice presidents. The remaining two and the president are sharing this workload, which has made it more difficult to complete important tasks in a timely manner. Additionally, we eliminated key administrative support positions within the human resources and physical plant maintenance departments, adding to my workload.

Glenn Little, South Florida Community College

Change in emphasis

Everything is getting more financial scrutiny. If a new academic program or a new delivery method is going to be initiated, I am being brought into the discussions early on to evaluate the financial impact of the proposal. I suspect this is going to be more of an organizational culture change that will persist.

In terms of treasury and debt management, my role and responsibilities haven't changed, but my focus has. In the past, I spent time looking for the best short-term and long-term investments. Today with interest rates so low, my time is better spent just making sure our investments are safe and focusing more on structuring new debt issues to lock in low, fixed interest rates and getting some construction projects up while contractors are hungry for the business and prices are down.

Ken Revenaugh, Missouri Baptist University

My set of responsibilities has not changed; however, the balance among the different aspects of my job—human resources, facilities, auxiliary enterprises, budget/financial planning, financial operations—has definitely changed, with more time being spent on the budget, financial planning, and financial reporting aspects than in the past.

It has always been true that the balance among the many parts of my position has been a moving target, and I expect that will continue. For the near-term future, I would expect the current balance would continue, but over time, it will reset again, as it has in the past.

Peggy Plympton, Lehigh University, Pennsylvania

I'm not sure it's changed much, as a CBO is always responsible for watching the budget and maximizing revenue generation and expense control. However, the current economic conditions have put a stronger focus on these responsibilities across the campus. It is still critical that the CBO be innovative to achieve the goals that the president sets.

Bob Lovitt, Lamar University, Texas

More involved campuswide

A Special Case

Interestingly enough, North Dakota is one state that has not experienced much in terms of negative impacts due to the economic downturn. The North Dakota University System received the best funding package in history for the 2009-11 biennium with minimum salary increases of 5 percent each of the two years and funding for several capital projects.

Trudy Collins, Valley City State University, North Dakota

My role has changed. I am more visible to faculty and others in the institution because of the tough decisions I have had to lead the institution to make, to survive the massive state budget reductions. Many in the institution have a difficult time grasping the enormity of a 30 percent reduction in less than a year and the significance of the decisions that have to be made in order to sustain the institution. While Midlands Technical College has avoided drastic measures such as furloughs and reductions in force, we have had to undergo major reengineering in a short time period. The reengineering caused us to rethink things such as faculty loading, the way support services are rendered, program offerings, community involvement, professional development, release time for faculty, and developing the ability to say no. Additionally, we have to reexamine our approach to how we charge for the education experience and support services.

Ron Rhames, Midlands Technical College, South Carolina

I am now far more involved in decisions affecting academic and student affairs. The CAO and her staff now regularly include me and my staff in discussions regarding their plans and if/how we can finance them. I think there has been a perception that money was unlimited in supply and the entire campus has now come to understand that we really don't have the assets to do many of the things they have always done. We are now seen as partners with student affairs in general, but especially so with athletics. I believe these are permanent changes.

Denny Terrell, Shippensburg University of Pennsylvania

With the economic downturn since September 2009, the college president turned to me to work quickly with the cabinet to recommend strategies for midyear budget cuts to our state appropriation, and to reconvene the strategic plan steering committee to review the strategic plan 2009–13. We developed a “cost savings and innovations survey” and other tools such as a blog to gather institutional input, and we used the results with the strategic plan steering committee to confirm consensus of priority activities and costs for the FY10 budget and beyond.

I expect this role“more focused on institutional leadership”will be permanent. CBOs must continue to have a greater institutional perspective and support cost savings balanced with investment, such as IT and sustainability initiatives, for the future.

Janice Forsstrom, North Shore Community College, Massachusetts

Not so much change

My set of responsibilities has not changed; however, the balance among the different aspects of my job has definitely changed, with more time being spent on the budget, financial planning, and financial reporting aspects than in the past.

Peggy Plympton, Lehigh University

As vice president of a relatively small university, I am and have always been required to “wear a number of hats” since we don't have the financial resources for large departments. Therefore, every day we must deal with financial constraints and tight budgets.

Angela Watson, Langston University, Oklahoma

My role has always been to provide professional and timely advice on university finance matters. The role is the same whether we have extra money or have less than we wanted or anticipated. While it is more fun to have extra money, the recent economic downturn has provided new challenges. Not only are we dealing with a shortfall of funding at the university level, but in some cases our students and their family situations have been impacted. Staff and faculty may be affected outside the OCU circle because a spouse lost a job, their retirement funds declined in value, and so on. The double layer of problems is a new challenge and one we have tried to meet with creativity, compassion, and utmost concern for the greatest number of people.

Brian Holland, Oklahoma City University, Oklahoma

Having faced six budget reallocations over the past eight years, we have continued to focus on the primary mission of teaching and research through difficult times. By strategically focusing on increasing enrollment and improving student retention, our budget challenges have been partially offset by new tuition. My role as a team member has not changed; rather, I continue to be informative and supportive throughout the budget process.

Christine Jackson, University of Nebraska at Lincoln

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Has your status or visibility at your institution changed?

Greater leadership role

I am the primary contact with the state legislature, and I have led our testimony for many hearings over the years. In addition, I now take the lead role in explaining the budget to internal audiences (faculty, staff, students); the board; and external audiences (the media, state government, the community, and our campus neighbors). The perceived importance of what I have to say is much higher and I need to choose my words carefully so that they are clear, intentional, and realistic. It's a fine line between panic and preparation for substantial and persistent challenges. For example, I talk so much more about how we balanced our budget and supported our debt rating. Two years ago the debt rating was important to a very few. Now, it is a constant question, as are many budget items.

Thomas J. Botzman, St. Mary's College of Maryland

When times are difficult, there is more visibility of the business officer role, as business decisions become central to the survival of the institution and resources become scarce.

Greg Morgan, Lane Community College, Oregon

Stronger cross-campus relationships

Absolutely, both status and visibility have been elevated. Institutionally, I am perceived to articulate situations, needs, and solutions clearly, and to be more approachable. I have presented budget information and planning updates regularly in a variety of communication formats, and have built positive relationships with representatives of crossfunctional areas within the governance structure. Academics see my role as more of an advocate for improving our teaching and learning environment.

Janice Forsstrom, North Shore Community College, Massachusetts

We have met with each school's faculty. We sought their input and feedback about the medium- and long-term solutions we need to find as we plan for the next budget cycle, to replace the short-term ideas we implemented. We would not ordinarily meet like this, but the situation provided us the opportunity to make some good out of it. Our president, provost, vice president of enrollment management, and I all attended each meeting. The meetings proved to be valuable in more ways than one-and we should probably continue them into the future, even without a financial emergency.

Brian Holland, Oklahoma City University

Actually, my visibility has been increased since we were able to construct a building, in contrast to many others who stopped construction projects. We also refinanced existing debt and obtained additional funding for the construction project. We will have completed the building for fall 2010.

Edmund Rutkowski, Pratt Institute, New York

With the added duties, I have become the designated liaison for some county meetings, so my visibility has been higher outside of the institution. Internally, there's certainly a lot of interest in the budget process, so there are more people listening and asking questions when I give my budget updates.

Glenn Little, South Florida Community College

More respect

Actually, I feel that our roles and responsibilities have been greatly strengthened by these times. We are in such unprecedented times, even the old warriors like me cannot draw a parallel. I think we will be expected to provide financial planning processes that will have built-in safety nets to avoid the serious downturn that we are experiencing.

Earle Holley, University of South Carolina Beaufort

My visibility on the campus is much higher. I think the faculty and staff have much more respect for what we do in financial affairs. We are involved in more campus discussions about the state of affairs and how this economy is affecting the college. I am asked for more solutions and given opportunities by the community to save money or guide program changes.

Danny Flanigan, Spelman College, Georgia

I'm taking a more active role in communicating financial concerns to the community. I'm much more visible.

Karen VanDerhoof, County College of Morris, New Jersey

I believe there is greater appreciation in the campus community for the bottom line and the staff that help the college monitor and manage its resources. The college community appreciates our collective ability to stay on course and the role financial management plays in that, while some campuses seem to face more trouble maintaining their bearings. There is also an appreciation for the openness of the president and the CFO in sharing financial reporting. This includes issues emanating from the campus, such as sustaining or diversifying our financial resources, conserving natural energy and resources, student assistance, savings from moving publications to electronic formats, and general economic trends affecting campus resources.

Jay Kahn, Keene State College, New Hampshire

A voice in more venues

The perceived importance of what I have to say is much higher and I need to choose my words carefully so that they are clear, intentional, and realistic.

Thomas J. Botzman, St. Mary's College of Maryland

I am now invited to many meetings of groups that I frankly didn't know existed. People are now interested in my views and recommendations because they are beginning to understand how they are affected by money. Administration and Finance is now seen as being able to help them achieve things they clearly will no longer be able to do without our advice.

Denny Terrell, Shippensburg University of Pennsylvania

Both in on-campus meetings and gatherings, as well as with the board of trustees, there is now an assumption that every agenda will have at least one item's worth of economic update. So the default assumption now is that I (or someone from my group) will be speaking, at least for a few minutes, whenever there is a public gathering. That definitely is a change from the historical approach, and is absolutely because of the economic downturn.

Peggy Plympton, Lehigh University, Pennsylvania

More time in the president's biweekly cabinet meetings has been devoted to the areas in my responsibility center. Additionally, I have spoken to the faculty at their monthly meetings more often than in previous years.

Greg Haselden, Erskine College, South Carolina

Not really different

My status hasn't significantly changed, since our college has a highly participatory budget process and continual communication and involvement in financial matters. My role has always been that of a facilitator. Even in the fall of 2008 when the college had to reduce its expense operational budget by $2.7 million, the entire campus community made it happen. That, along with higher-than-expected spring and summer enrollment, helped achieve a $2.5 million year-end operating balance for FY08–09.

Gerald Boothby, Guilford College, North Carolina

To a great extent, no. What has changed is the notion that maybe some of the conservative financial positions that were taken through the years (at some political cost) actually helped protect the college and made the impacts of the crisis less severe than they would have been had we been more aggressive during the growth years.

Michael Lochhead, College of the Holy Cross, Massachusetts

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What are you doing now as a chief business officer that you never imagined you'd be doing five years ago?

Taking on new responsibilities

Construction management and helping diversify our revenue portfolio.

Robert C. DeRose, Lewis University, Illinois

Working with our generous donors who wish to assist in bringing a few underwater endowed funds back above water.

Heidi B. Ellis, Austin College, Texas

I am setting financial aid policies. Financial aid does not report to me.

Sharon Meyer, Angelo State University, Texas

Attending more of our open houses, meeting with parents, and talking about the cost of higher education.

Michael Giampietro, Bay Path College, Massachusetts

Supervising campus police, acquiring a hotel and converting it to student residential space, acquiring other property given favorable market conditions.

Joanne Yestramski, University of Massachusetts, Lowell

The departure of the VP for student services and the financial downturn occurred at about the same time. Proceeding cautiously, the president determined not to fill the vacancy. Instead, we reorganized our co-curricular functions and set me over them. This change had never entered my mind.

Randolph Gill, Southern California Seminary

The increasing emphasis on sustainability and, along with that, how to continue to reduce fixed costs related to facilities usage and upkeep. This has resulted in many more demolition and renovation projects versus adding new net square footage.

William Maki, Bemidji State University, Minnesota

In the summer of 2008, our enrollment management division, consisting of the departments of admissions and financial aid, was assigned to me as the chief business officer. Due to my years of service, I do have a significant understanding of recruitment in our constituency and of financial aid, but the process of “wearing two hats” is more than a full-time job. No doubt the president made this decision due to the entire senior administration (other than me) being in transition and the tight financial budget that precludes hiring an additional vice president.

Charlie Fiskeaux, Asbury University, Kentucky

My range of duties had already expanded several years ago to include public safety and athletics. It's now further expanded to include fundraising, publications and communications, continuing education, community outreach, and a wide variety of board activities.

Thomas J. Botzman, St. Mary's College of Maryland

The CBO must be the chief pragmatic person on campus. While not abandoning the pragmatic role, I never envisioned that I would also need to be the chief optimist and cheerleader.

Earle Holley, University of South Carolina Beaufort

Considering the institutional perspective

I didn't imagine I would be required to rethink the core mission of the university in my role as a new CBO. Or trying to predict the future direction of higher education in America before implementing an annual budget allocation process for my own institution.

Charles Maimone, University of North Carolina Wilmington

I never imagined that the economy, as a whole, would implode. In scenario planning, a primary fallacy is to assume everything falls apart at once. In fact, that has very nearly happened this year. I will say that there have been, and still are, great opportunities for higher education in this environment. There are opportunities for creating a performance culture that have never existed before and may be our best hope for responding to increasing demands for performance. We are virtually required to examine things that have previously been sacred.

Beth Hardin, University of North Carolina at Charlotte

I don't know if there is anything that is happening that I never imagined, but the current environment is requiring me to be more front and center and to provide a lot more coaching and handholding. I am involved more in helping to build confidence in the organization and its leadership. I am having to dedicate more of my life to the institution to weather this storm.

Phil Doolittle, University of Redlands, California

Five years ago, I never thought I'd be ... part of an institution that is doing well in these difficult economic times.

Bob Hite, Golden Gate University, California

Watching more closely

Managing to the bank covenants. They're front and center, and we're doing everything we can not to trip any of them.

Tom Phizacklea, Goucher College, Maryland

As budgets have been screened, there is less available for discretionary spending and as a result, I spend more time than I would like making decisions about small expenditures.

Lisa Lewis, Fielding Graduate University, California

I'm having to closely watch decisions that will end up affecting certain ratios that we must maintain as a part of our financing covenants. Before there was never a problem complying, but now it takes great care. In addition, working to weigh the impact on certain government decisions (e.g., new homebuyer tax credit) that are negatively affecting our ability to keep a viable occupancy in student housing.

Ryan Hutchinson, Southeastern Baptist Theological Seminary, North Carolina

The tremendous emphasis on analyzing risk in virtually every aspect of our business operation. How much risk is prudent for the institution to assume in the context of long- and short-term considerations such as the economy, enrollment projects, strategic plan of the university, endowment investments, academic program structure and investment, etc.?

Michael S. Malewicki, Mount Saint Mary's University, Maryland

Managing shrinking resources

I never dreamed I would be cutting programs, doing layoffs, restructuring jobs, and looking for any and all ways to save a dollar.

Danny Flanigan, Spelman College, Georgia

Ask me again later

My role has not changed materially yet—you may need to ask this question again in two years. I anticipate a more active and challenging role when the one-time federal stimulus funds disappear in FY11–12. Life should be different, and likely very challenging, in higher education for a CFO by then.

Jennus Burton, Arkansas State University System

I never imagined I would be managing an organization that is operating with 30 percent fewer resources, both human and financial, than it did just 18 months ago. I now spend much of my time defending our division's resources instead of identifying resources to improve our business-service system and upgrade our technology. We continuously focus on areas such as energy savings, sustainability, reorganizational efficiencies, cost containment, and revenue-enhancement activities. Such are the effects of the recession on state revenues.

The intercollegiate athletics program reports to me. Five years ago, who would have thought we would have to defend in earnest continuation of a highly successful championship series football program or have to drop a 103-year-old men's baseball program? Such are the effects of the recession on state revenues.

Also, I never envisioned spending as much time as we must in negotiating with a faculty bargaining unit or compiling as much data and information for state legislature agencies, state budget units, and board of regents staff. Such are the effects of the recession on state revenues.

Tom Schellhardt, University of Northern Iowa

No changes

I am performing now just as I imagined I would when hired to do the job.

Andrew Harris, University of North Texas

We have been struggling with the same or similar issues for the past eight years that I have been in this position. We never recovered from the tech-bubble bust.

Nikki Krawitz, University of Missouri System

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