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Doing Right by Departmental Business Officers
August 2005
The days of managing with command-and-control strategies are numbered. With the advent of decentralized administrative structures, coordination and cultivation are the best approaches to working with departmental business officers. By Thomas McWhorter
John Smith sat at his desk wondering what to do. As the business officer for a large division at a university, he is responsible for coordinating with the purchasing department on the procurement of goods and services. His boss, the dean of the division, sent him a contract for professional services that needed to be handled right away because it was critical for the success of a major divisional initiative. John knew the contract was lacking in several areas, but he also understood the urgency of moving forward and was feeling the pressure from his boss to get it moving through the system. He had reason to believe that this vendor had a connection to one of the faculty members in the division, which meant a potential conflict of interest.
As the key administrator for his division, should John follow orders and submit the contract? If he questioned the contract, how would his boss react? Would the dean become angry at John for being a roadblock—for being more concerned with following policies and procedures that tend to “get in the way” of doing business—instead of doing everything possible to get the contract approved? Who would support John if he did uncover irregularities that needed to be reported? Maybe he should just keep his concerns quiet this time and move the contract forward.
As the chief business officer, are you confident that the departmental business officers at your institution would act appropriately in this hypothetical situation? How certain are you that the departmental business officers know and will comply with the rules? If a departmental leader brought this issue to your attention, how supportive would you be? What kind of an environment exists to support open communication and collaboration when it comes to administrative procedures? This example is intended to stimulate your thinking about the business officer’s role in coordinating the efforts of departmental leaders to facilitate more effective management at all administrative levels.
Decentralized Management Takes Hold
During the past 20 years, institutions have grown more complex and have evolved into fairly decentralized management structures, placing an increasing amount of responsibility on deans and directors. The development of responsibility-centered management systems for budgeting and organizational management has been a major factor in the delegation of responsibility and the subsequent development of decentralized structures. Many institutions now have some sort of responsibility-centered approach to their organizational structure.
In his recent book, The Future of Work (Harvard Business School Press, 2004), Thomas Malone offers this definition of decentralization: the participation of people in making the decisions that matter to them. He uses the illustration of a decentralization continuum to show where many organizations fall based on the level and extent of decentralization in the organization. He places higher education institutions on this continuum at “loose hierarchies,” in which significant decision-making authority is delegated to low organizational levels. Today’s decentralization reflects more than organizational hierarchy—it represents a certain amount of autonomy in achieving goals and objectives.
Within this structure, the senior administrator or departmental business officer has emerged as the primary individual responsible for administrative operations within decentralized operating units. Depending on the size and complexity of their units, departmental business officers can be responsible for a wide range of activities, including human resource administration, financial management, strategic planning, information technology, contract negotiation, facilities and space management, and public relations.
To carry out these duties, departmental business officers must interact with all the central administrative areas within the institution. These business officers (and their staffs) must know and enforce the policies and procedures for transacting business. In addition, they need to be aware of the legal and regulatory issues confronting businesses and higher education and make an effort to stay current on these issues.
| Are You Ready to Cultivate Coordination? |
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If you want to cultivate a better climate of coordination on your campus, take these steps:
- Establish a process for regular interaction with departmental business officers to improve communication. Format these meetings to include information sharing along with plenty of time to discuss areas of concern. Conducting small focus groups is another way to get feedback on how things are running and to suggest process improvements. Encourage informal networking opportunities.
- Consider working with a group of departmental business officers to develop and refine new policies and procedures. Encourage the central administrative areas that report to you to enlist a group of departmental business officers as an advisory working group to meet and discuss current issues and to provide feedback on how to improve the delivery of services and work processes.
- Use technology to make coordination easier and to facilitate interaction. Automated discussion groups can be implemented, as can subscription e-mail distribution lists for policy discussion and information sharing.
- Ensure that your current professional development program contains topics appropriate for departmental business officers as well as other business services staff. Consider certification programs or mandatory modules of training to ensure that each staff member has the minimum proficiency required to perform his or her job.
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With Progress Comes Challenges
Decentralized structures foster responsive management and entrepreneurial decision making at the local level, which helps institutions respond to the changing market and environment within higher education. Unfortunately, decentralization can also create a lack of cooperation among units, competition for resources, a breakdown in communication, and other challenges for departmental business officers.
For example, an institution’s central administration may not fully understand the complexity of the departmental officer’s role, sometimes viewing that individual as merely an enforcer who makes sure that all the policies and procedures are followed. A lack of understanding of the myriad tasks performed by the departmental officer can lead to animosity between centralized and decentralized units. Most departmental business officers act as partners in developing strategy. Administrators, faculty, and staff in the local unit, who may not be aware of that strategic role, may become antagonistic, believing that the departmental officer is impeding progress.
Departmental business officers must balance local needs with rules and procedures defined at the central level. Compounding this issue is the fact that many work for senior administrators who may not be aware of the procedures, regulations, and laws governing the institution. Or a departmental business officer may work for an administrator who simply does not care about these issues and just expects the business officer to figure out a way to navigate the system to accomplish objectives. Additionally, departmental business officers may encounter confusion about their decision-making authority. Their levels of authority and responsibility may not be clear in policy or practice, rendering it difficult for them to make day-to-day decisions.
To support local decision making, departmental business officers need good information. As we all know, technology advances over the past several years have vastly improved the ability to obtain and manipulate data to support strategic decisions. However, many departmental business officers must either use centralized data systems that were built to sustain centralized needs (e.g., financial reporting, student registration, and bill payment) or develop “shadow” systems that provide the kind of information needed at the local level.
Another issue to consider: How does the institution reward departmental business officers for making good decisions? What would be the reward for exposing the unscrupulous contract that the boss was trying to push through in the earlier example? The departmental business officer would certainly face a professional risk, and without a clear understanding of how supportive the administration would be, it is difficult to determine what actions the business officer would take.
| Four Campuses That Have It Covered |
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According to Thomas Malone, author of The Future of Work, “when you coordinate, you organize work so that good things happen.” Here is how four institutions have organized their work:
Cornell University, Ithaca, New York, established a system of business service centers a few years ago. Business service centers continue to report to their respective college or administrative unit, with much coordination with the central administration. The director of each business service center meets monthly with the central staff, including the vice president/controller, to discuss what needs to be accomplished to refine procedures. In addition, a senior financial group, which includes college business officers and financial directors from administrative units, meets on a regular basis to discuss current issues and systems developments and review suggested changes to policies and procedures. The controller believes they get more accomplished within this structure.
At Purdue University, West Lafayette, Indiana, department business managers report to the vice president of business services (through a director of business managers) in a centralized reporting relationship. In place for some time, the arrangement works well—evidenced by the customer focus of business managers and communication within the organization.
Business managers from similar units are grouped together in clusters, which serve as a mentoring network. A formal training and mentorship program supports the business managers in carrying out their duties and provides a clear career path for moving up within the organization. Business managers closely coordinate with the central support area and are involved in financial and administrative decisions.
At the University of California, Irvine, what began as an informal meeting of academic business officers evolved over time into a formal working group. This group, which meets monthly to discuss issues with administrative and financial units, includes the assistant executive vice chancellor, academic affairs, and the associate vice chancellor for administrative and business services. The group discusses proposed policies and procedures and implementation issues.
The chair of this group (or chair-designate) also participates in a series of round-robin lunch meetings throughout the year with one of the other assistant deans, the assistant executive vice chancellor for academic affairs, and the associate vice chancellor for business services. These informal lunch meetings help to cultivate the working relationship with the academic business officers. Business officers from the administrative units participate in the chancellor’s advisory council.
The informal reporting relationship to academic affairs is reinforced when an assistant dean position becomes available. The academic dean works with the assistant executive vice chancellor for academic affairs throughout the recruitment and selection process. Once the position is filled, the assistant executive vice chancellor meets regularly with the new business officer, and one of the other assistant deans is assigned to work with the new hire in a buddy system to provide assistance as he or she becomes familiar with new responsibilities.
The University Services Renewal project at the University of Washington, Seattle, provides another example of strong coordination between central offices and end users. This project has transformed the delivery of administrative support at the institution through streamlined Web-based technologies. End-user teams created the systems in this project based on their needs and the needs of key business partners. Under the guidance of a steering committee, process improvement teams lead each system initiative in collaboration with user task groups in developing solutions. These teams provide insight into how project deliverables affect the end user.
The steering committee, chaired by the executive vice president, is made up of deans and senior business officers. A recent outcome of this concept has been a task force established by the executive vice president to improve customer service.
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Coordinate, Don’t Control
In decentralized organizations, responsibility is delegated. Top-level executives manage by exception, and communication from the top is infrequent. Managers, who have greater authority, can respond quickly to issues. But what happens if managers start to run their operation too autonomously, with little coordination and with a narrow-minded attitude? Top-level executives may try to regain control over the whole entity and return to a highly centralized structure. This approach usually fails.
Malone recommends that executives shift from “command-and-control” to “coordinate-and-cultivate.” Here are eight strategies to cultivate a better relationship with departmental business officers.
1. Improve the flow of communication to better coordinate efforts among business officers. Faced with the day-to-day operations within their units, departmental business officers find it difficult to stay on top of developments that occur at the institutional level that could have a direct impact on the unit’s activities and to keep current on changing regulations and institutional policies and procedures. The biggest challenge noted by one departmental officer is staying abreast of new policies and information released by the central administration, while ensuring that new information is promptly communicated to director, managers, supervisors, and staff.
2. Ensure that the institution’s organizational structure encourages two-way communication regarding issues and practices. This means cultivating an understanding of not just what is happening but why it is happening. The biggest tension between centralized and decentralized management seems to be the feeling that policies, procedures, and new systems are often imposed without explanation to or input from the end users. This illustrates the need for open dialogue with departmental business officers as changes are contemplated or implemented.
3. Involve schools and departments early and consistently in all systems and policy matters that have a direct bearing on the operations of the institution. Take advantage of the opportunity to include departmental business officers at the central level as active participants in the discussion and development of policy and system changes. They often can pinpoint the potential problems with proposed changes or recommend alternative courses of action that still achieve the desired result. Their inclusion can also increase communication and collaboration as well as build trust and shared objectives.
4. Make sure that the central administrative areas are working to foster good relationships. Encourage central administrative offices to actively solicit the participation and collaboration of departmental business officers in carrying out their responsibilities. The silo mentality of hierarchical organizational structures needs to be overcome; it’s not “us against them.” Create relationships around the issues facing departmental business officers and the central areas.
Dealing with this issue may involve a further look at organizational structure and reporting lines. Some institutions have dual reporting of departmental business officers to the vice president for administration, which formally acknowledges functional responsibility to central administration. However, this type of reporting relationship may cause stress within the local units and can be difficult to manage. The main objective is to move from the historical view of hierarchical, centralized structures to a more team-oriented, coordinated approach.
5. Encourage professional development and training activities for departmental business officers. Most institutions have formal staff development programs that offer general management courses, but it is a good practice to offer programs specifically addressed to departmental business officers. The University of Southern California (USC), Los Angeles, recently created a mandatory training program specifically for business officers. The program offered something for everyone, from the departmental business officer who has less than a year of experience to those with many years under their belts. Cornell University, Ithaca, New York, developed an accounting certification program with specific courses that are required for staff members in their business service centers (see sidebar, “Four Campuses That Have It Covered”).
6. Foster involvement with professional associations, which offer a wide range of professional development and member services. Participation can help departmental business officers improve skills and understand the issues facing higher education as well as provide for future growth opportunities within the institution. In an informal survey of colleagues about professional development, most respondents indicated that they kept current on higher education by reading professional journals and newspapers. Many also use institutional opportunities for professional development. Almost all indicated they have not been involved in outside associations but would find such participation valuable.
At the July 2004 NACUBO New Business Officers program, more than 60 percent of the participants came from outside of higher education. While it may be a positive sign that higher education is attracting qualified outside candidates, it raises concerns that we are failing to cultivate the people who know the academy and the culture and have a broad range of experience in administrative activities. With the right combination of professional development activities to enhance their skills, insiders with potential will become better prepared for such opportunities.
7. Provide better information for decision making. Departmental business officers need access to accurate and up-to-date information to influence good decision making. They should be able to get the data they need from the central systems and easily access data that allows them to make good strategic decisions at the local level. Departmental business officers need to be active participants in the design and implementation of new processes. Through collaboration and coordination, participants may develop solutions that benefit everyone.
8. Cultivate information forums and networking opportunities. At USC, the senior vice president for administration hosts three or four breakfasts each year for business officers where information is shared and departments make presentations to provide updates on current programs and initiatives. A Business Officer Forum allows for more interaction among colleagues and a more thorough discussion of topics. The meetings, which focus on policy development, information technology, and audit and control functions, encourage dialogue and interaction on best practices and provide additional opportunities for central administrative areas to share information.
Sharing Objectives
With decentralization, chief business officers need to ensure that the role of departmental business officers is understood within the institution and create an environment that promotes coordination and cooperation among the departmental business officers and all of the central administrative units. The end result will be departmental business officers who look beyond the needs of their local units, feel sure of their support, are aware of how their actions impact the institution, and have a shared objective with central administration.
Author Bio Thomas McWhorter is associate dean for enrollment services at the University of Southern California, Los Angeles.
E-mail mcwhort@usc.edu
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