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Business Officer Magazine
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Ambassador of Change

NACUBO 2005-06 Board Chair Joseph Mullinix charts an ambitious agenda for fostering positive change in the year ahead.

By Jeffrey N. Shields

What are your current responsibilities for the University of California System?
I'm responsible for the business and financial activity of the system. My responsibilities focus on facilities (operation, design, construction), human resources (we manage our own benefit operations), information technology (principally focusing on administration), financial and treasury functions, internal audit, and medical center operations.

And you do that on behalf of all 10 campuses in the system?
The system is managed in a decentralized way, giving each of the 10 campuses a level of autonomy. Some functions, such as labor relations, benefits management, risk management, and treasury are centralized, but most day-to-day operations are decentralized. The system office is charged with policy and program overview.

You have worked at Yale and Columbia, and now you are working in a system office. What was your transition like from an independent campus to a system?
The positive aspect of working in a system office is that you get the chance to step back from a lot of the details of working directly on a single campus, and the day-to-day tasks are not as consuming. You also get to see a broader array of opportunities and problems to address. At the same time, you miss out on getting to see firsthand the outcomes of your work. I get a lot of breadth that I didn't necessarily get on a single campus, but I'm not as close to the end product, which is a bigger difference than I imagined.

Given your experience, what do you consider the top issues that business officers in higher education face today?
The biggest issue I see is resource constraints. That is probably the case all the time, but I believe it's more pressing at the moment. Most public institutions during the past five years have experienced a real tightening of resources as local governments have felt the financial pinch. Take my state as an example. Overall, we're seeing the state investment proportionally less in higher education. If you look across time, the subsidy per student in real terms is substantially less than it used to be. That creates a major funding gap.

This is exacerbated by a second problem: We are a personal services industry. It has been challenging to achieve the productivity gains that we see in so many other sectors of our economy. It's also complicated by the fact that our compensation levels are relatively high, reflecting the high levels of education of our faculty and staff. To compete for employees, we have traditionally placed a heavy emphasis on benefits, where cost has risen substantially in recent years. Changing benefits is extremely challenging.

Have you been in a situation in which you dealt with changes to benefits, health insurance, or retirement?
Yes. During the early part of my tenure at Columbia, changes were needed during a period of financial difficulty for the university and for New York City. We needed to change our retirement plan and our retiree health systems. In my current system office role, we have been fortunate not to require individuals to contribute to their defined benefits retirement plan. As we look forward, both the university and our employees will have to start making contributions to the retirement plan. When we look at what reasonable employer and employee contribution levels will require, that's going to hurt our budget and impact our employees. Additionally, UC has a very attractive retiree health program. GASB changes are going to require the university to recognize the cost of those benefits as well. I'm personally concerned about how the university is going to pay for the escalating cost of these benefits if we don't provide funding for them now.

Mile Markers
Joe Mullinix earned an M.B.A from the University of Chicago Graduate School of Business and a B.A. from Georgetown University. He is married to Diane, a University of California architect, and has three sons. Previous roles include vice president for finance and administration at Yale University and senior vice president at Columbia University. He was recognized with the NACUBO Distinguished Business Officer Award in 2003. Says Mullinix, "My father taught me to recognize each incredible opportunity that you have, to focus and take advantage of them and make the most of them for yourself, your family, and others."

What is your advice to other business officers who are dealing with similar constraints?
Business officers must make people aware of the challenges and issues. Any kind of benefit change is difficult, but a real exploration of alternatives, particularly with administrative and faculty leaders, can ease the pain. If possible, don't make major changes for existing employees. Try to phase in substantial changes over time.

What are the other key issues that you and other NACUBO members are concerned about at this time?
Probably in pretty much every place in the country, senior-level executives are discussing the changing demographics of student populations. In my state, we are seeing substantial growth in student populations that historically have not had high levels of participation in the university system. For us, the challenge is to reach out and serve these populations. Other areas of the country are experiencing shrinkage of more traditional college student populations. The key questions become: What does an institution do when planning for the long term within that context? How do we as institutions keep up with these changes to student populations at a time when higher education needs for society are also changing dramatically?

Can you provide an example of a major future need you believe your institutions are struggling to fulfill?
We have been discussing that the economy is going to be much more intellectually driven. A lot of the growth we have seen in California has been driven by science, technology, and other creative enterprises. We expect this trend to continue. Success in this new economy requires individuals with a broad education and more education than they've had in the past. Because of the fast pace of change, most of our students will not have a single career occupation with one employer. We need to focus more on developing people who are much more creative and able to think broadly and in different contexts for the longer term.

As you think about your leadership role with NACUBO this coming year, what opportunities ahead may impact members?
Two things. From the board perspective, the most important thing we will do is appoint the new NACUBO president and CEO and ensure that an environment exists which he or she can succeed in leading the association and its staff. Clearly as I look at my role in the coming year, being able to achieve that is incredibly important. But we can't focus only on that. We also must be sure that the basic critical elements of our organization are being addressed. We're all in the service business. The trick is to continuously improve. NACUBO has gotten better in providing services to its members across the years, but that likewise requires continuing to raise the bar. I think we have to keep improving the service that we provide the membership, such as information about the important issues of the day, professional development that provides our members with the tools to succeed, and advocacy for higher education issues. Within an enormously changing environment, the whole networking aspect of the organization is critical.

Roadside Fans

As Joe Mullinix takes the leadership reins for NACUBO, fellow travelers wish him well.

"Joe is a consensus builder. He is not afraid to present his own ideas and his own proposals, but he is always prepared to listen and learn from the ideas and proposals of others."
—DICK SPIES, executive vice president for planning and senior advisor to the president, Brown University, Providence, Rhode Island, and NACUBO board chair, 2004-05

"As we search for a new president and CEO, the role of the board chair becomes even more crucial. Joe, as a seasoned and competent chief business officer, has the skills needed to guide the transition of leadership for NACUBO."
—LAUREN J. BRISKY, vice chancellor for administration and chief financial officer, Vanderbilt University, Nashville

"Joe brings an unusually strong knowledge of how the business officer's work occurs in both the public and private sectors. He also has a breadth of understanding of NACUBO's advocacy role in Washington. He is a real pro."
—CRAIG BAZZANI, vice president for foundation advancement, University of Illinois at Urbana-Champaign, and NACUBO board chair, 2002-03

"He is one of higher education's greatest minds and will advance the issues and mission of NACUBO tremendously."
—JANICE M. ABRAHAM, president and CEO, United Educators

You recently experienced a presidential transition at UC. What lessons did you learn from that?
A new organization or a new team provides a feeling of excitement and an opportunity to explore different ways of doing business. It also is a time to redefine long-term goals. That's what I hope for NACUBO.

How should NACUBO view its long-range strategic plan during this period of presidential transition?
We've all learned that long-range strategic plans must be processes if they really are to succeed. They are not chiseled in stone. These plans need to reflect both the needs of constituents and the needs of the organization. Those needs are viewed differently leaders in the association. Transitions with the CEO, with the staff, and with members of the NACUBO board change the needs that are identified and prioritized. We have all seen it as we move into a new organization. Quite often, you do things differently than the person who was there before you. Hopefully you pick a few areas that perhaps weren't done as well and focus on doing those better. And the reality is that in the course of doing that, other areas receive less attention. I think that's what we will see here. With a new NACUBO president we will fine-tune the strategic plan with the vision of new leadership. Opportunities will exist for real advancement, but we won't forget about those areas where we have made progress in the past.

How would you describe your road map for leading the NACUBO board?
This is a challenging year because we've had a superb president with Jay Morley for the past 10 years. As he steps aside, it's going to be very important to work with the new person to be sure that he or she has the opportunity to step back and assess the needs of NACUBO. I hope this is a time when we can not only continue to provide high-quality services to our members, but also carefully look at opportunities for substantial improvement in the longer term.

This next year will include the final months of preparation for the 2006 Campus of the Future meeting with APPA and SCUP. What opportunities are available for members as we prepare for this one-of-a-kind joint meeting with facilities officers and university planners?
I've invested a lot of time in facilities planning, design, construction, and operations at the three universities where I've worked. Enormous prospects exist for business officers to learn and share ideas with their facilities and planning colleagues. I'll give you an example from my current role as a system office business officer. While we have an enormous building, planning, and design effort—$8 billion worth of projects in some stage of planning, design, or construction—we are investing an inadequate amount in the maintenance of our basic physical plant. Ironically, at the same time that we are building we are simultaneously disinvesting in our base. If we were doing the same thing with our endowment—that is, spending down the endowment a t the same time that we were adding gifts—everybody would be very concerned. But because it's harder to measure with facilities deterioration, it doesn't get the attention it deserves, and particularly—as I pointed out earlier—at a time of critical financial constraints.

Our failure to invest adequately in our infrastructure is of great concern. I think the whole planning, design, and construction effort will only succeed on campuses if an incredibly close partnership exists among business officers, university planners, and facilities people.

Another area relevant to this meeting is sustainable, green buildings. We have taken some big steps in California, but there are areas where we can make more progress. We implemented a green buildings policy this past year, and we're in the final processes of creating a green transportation policy. Both SCUP and APPA are natural partners in helping us look at these issues at the 2006 meeting.

Welcome to UC
  • Home to 10 University of California campuses with locations in Berkeley, Davis, Irvine, Los Angeles, Merced, Riverside, San Diego, San Francisco, Santa Barbara, and Santa Cruz
  • Established: 1868
  • Population: 329,177 FTEs, including 159,486 undergraduate and 48,905 graduate students and 120,786 faculty and staff
  • Points of Interest: Three national laboratories, five medical centers, and hundreds of libraries, museums, performing arts spaces, botanical gardens, and natural reserves
  • Current Funds Expenditures*: $17.9 billion plus
  • Endowment**: $6.6 billion plus

* Includes Department of Energy laboratories
** Includes endowments held by UC Regents and UC campus foundations

Along those lines of greater focus on collaboration, what impact do you believe the outcomes of the ACUBO Innovation process will have on our membership and the four regional associations, particularly with regard to development of a comprehensive curriculum?
When the ACUBO effort started, one area identified for high payoff was to better integrate professional development activities. It was felt that some programs could benefit from much more national participation—particularly more high-tech involvement and delivery—whereas for others, coordination and working with the regions was the obvious approach. Many opportunities exist for productivity savings and service improvements here. It's difficult at times to do that because you are changing the established order. So I think there undoubtedly will be challenges down the road as we try to exploit all the possibilities we have identified, but it offers a wonderful chance to try to get more programs to more members and to focus better on their program needs.

In the year ahead, there likely will be discussions related to reauthorization of the Higher Education Act. What role can member institutions play as these discussions unfold?
All of us on the business side need to do more to appreciate the process and understand how the changes in reauthorization are going to impact our institutions. Having worked in Washington for many years, and having followed national policy, I think of myself as someone who is informed. But often I am out of touch with the details of what is happening—and even beyond the details, I feel out of touch with some of the major issues developing. Business officers need to make sure that they remain informed, and NACUBO is a valuable source of information. It's also important for members to communicate to their leadership the impact of reauthorization on their institutions. Quite often folks are focused on narrower issues. One thing that all of us have experienced in working with the federal government is the impact of changes in rules and regulations on our institutions. The one aspect that I think is often overlooked with the Higher Education Act is the operational impact of many of those changes. So not only do we have to look at the substance of what's happening, but we also have to look at how this could affect day-to-day operations.

You've shared so many valuable perspectives based on so much success during your career. Is there a professional mistake you have made somewhere along the way from which you learned a great deal?
I get great satisfaction out of the changing organizations for the better. For me, running something status quo is not particularly satisfying. Sometimes your experience in the past tells you that something that has worked once would probably work again. So you try it. Or you hear of interesting things others are doing and you try to implement it on your campus, which is one reason you go to NACUBO meetings. But whenever you try to do new things, you inevitably make professional mistakes.

I still recall an incident a few weeks after I took my first job in higher education. I had worked in very small corporate ventures, had done consulting in some pretty large international companies, and had been at the Office of Management and Budget for nine years, so I thought that I had a good handle on how to allocate resources and how to approach it so that it wasn't threatening to others. So at this new job, I was asked to help a group of faculty administrators discuss some financial resource allocation issues. It was a challenging time, and we needed to do some reductions. I came to my first meeting and proposed a new way of doing the budget. I remember getting about halfway through my presentation and looking down at the vice president for arts and sciences. His face was getting redder and redder. He made only one brief comment about my proposal, but my new budgeting system was dead.

From that I learned that in higher education—and elsewhere, too—you have to have a good appreciation for how other folks think about things and what their objectives are. In this case, the faculty thought that they were entitled to certain levels of resources. And whether I agreed with that perception or not, I didn't fully understand or appreciate it. That's something that has never ceased to amaze me—that what seems so obvious to me quite often is not obvious to others. Now at least I'm more sensitive to understanding the perceptions of others.

Author Bio Jeffrey N. Shields is vice president, community and member services, at NACUBO.
E-mail jeff.shields@nacubo.org