What Incremental Change Looks Like

Teresa Sullivan. Photo credit: Diverse Issues in Higher Education

by James A. Bacon

As long ago as last October, if today’s Washington Post article is to be believed, leaders of the University of Virginia’s Board of Visitors had lost faith in the willingness of President Teresa Sullivan to “consider dramatic program cuts in the face of dwindling resources and to approach the school with the bottom-line mentality of a corporate executive.” Convinced that she was not the right person to lead the university through tumultuous times, Rector Helen Dragas, Vice Rector Mark Kington and Peter Kiernan, a former Goldman Sachs executive who led the foundation for the business school, embarked upon a campaign to remove her.

The Dragas-led group coalesced around the sentiment that Sullivan was moving too slowly. How so? Unfortunately, no one’s talking. Other than making vague but unsatisfying statements about the university’s perilous condition, Dragas has remained steadfastly silent, even as the university community has erupted into a uproar. The only meaningful detail to come to light is Sullivan’s reluctance to trim marginal departments such as the classics or German.

To gain a deeper understanding of the issues involved, we must consult the  “Academic Strategy” memo that Sullivan wrote Dragas and Kington on May 3. The memo highlights how the UVa president viewed the challenges facing the university’s academic division and outlined an approach for dealing with them. Given that Sullivan has been even more tight lipped than Dragas, that document is almost the only source we have that illuminates her strategic thinking — or sheds light on the source of conflict with the board barely a month before her departure.

The memo shows a university president who is candid and perceptive yet deferential to the faculty and focused on the university’s reputation. There are several very good ideas in the memo, but nothing to suggest that Sullivan was willing to rock the boat. While board members saw the university facing a fiscal crisis coinciding with a technological tipping point in online education, Sullivan’s proposals would have taken years to implement and bear fruit.

By way of background, the University had been guided by the strategic plans, Virginia 2020, dating back to 2002, and the Commission on the Future of the University (COFU), published in 2008. Sullivan notes in the memo that she had been instructed upon her hiring not do a strategic plan for the academic program. Faculty were said to be fatigued and discouraged by the lack of follow-through. It is not clear from the contents why Sullivan was writing the memo, but one can infer that it came in response to queries from Dragas and Kington.

One of the more interesting observations in the memo is Sullivan’s statement that the university “suffers from a reputation gap.” Most institutions believe they aren’t getting the recognition they deserve. Sullivan worried that UVa didn’t deserve the reputation it had — “in a number of critical areas we are reputed to be better than we actually are.” More significantly from a strategic perspective, the university’s areas of strength are in the humanities and professional schools, while the priority is to build science, technology, engineering and mathematics (STEM) programs. “It must be candidly admitted that some of the fields that bring us the greatest distinction are not those in which most people would today invest (e.g., Spanish, English, Religious Studies).” Moreover, the reputation for excellence is derived from a small number of exceptional faculty, rendering it vulnerable should they retire or be recruited.

The competition for top academic talent is intense. As Sullivan noted, “A recent offer included a salary increase of more than $100K, subsidized housing and school tuition for dependents, the ability to hire two or three additional faculty of the person’s choosing, and the creation of a new research center as a personal research playground for the former Virginia faculty member.”

In Sullivan’s analysis, the University of Virginia occupies an awkward middle ground between large and small.

Our competitor public institutions are typically much larger, and we have foregone the economies of scale they can achieve in favor of an emphasis on smaller courses and closer interaction. Our competitor private institutions are typically smaller, but do not face the political pressures to grow in the service of the Commonwealth that we feel.  One result of our scale is that our departments are typically smaller than those at most research universities (including privates).  Rankings are known to correlate with size. Thus,  our choice to remain relatively small means that collaboration across the Grounds – the ability to achieve a critical mass of faculty in some important problem areas — will be a necessary ingredient in our continued academic recognition.

Beyond the reputation gap and the fragile top-ten standing of leading schools and departments, Sullivan identified other strategic issues: Continue reading.

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  1. jlanderson Avatar

    I disagree, JAB. You’re looking at the University … any “real” university … as a business, in the 21st century, corporate sense of the word.

    It is NOT. Institutions of higher education that have centuries of history at its core are NOT start-up ventures. They are NOT for-profit ventures. And most of all, the education they deliver is NOT something to be compared to UofPhoenix, DeVry or any institutions about an hour’s drive south of Cville.

    The full story simply is one of big-time money and egos of people who see themselves as “revolutionary” thinkers who can fully grasp “strategic dynamism,” whatever that means.

    I think the full story — or at least, the fullest version today — has finally emerged with the following stories on various news websites.

    1. The Hook, in Charlottesville, is reporting now that former President John Casteen has been leading the faculty’s fight against the Board of Visitors’ actions, “stiffening their spines” in advance of Monday’s BofV meeting:

    2. It’s now pretty much confirmed that Paul Tudor Jones, a billionaire hedge fund investor, UVa alum and name-designee contributor to the John Paul Jones Arena, is the “big alum” Peter Kiernan, late of the Darden Foundation, alluded to in his now-infamous email. Jones reported dangled a $100 million check to the University, setting as price the ouster of President Sullivan. Jones has authored an op/ed in today’s Daily Progress in which he comes out in support of her ouster, though the “facts” he cites are somewhat dubious and skewed to support his thesis.

    3. And I include this link simply because, in my opinion, it puts to the lie the statements by Rector Helen Dragas and now Paul Tudor Jones that President Sullivan didn’t see problems at the University that needed to be addressed. This detailed memo she prepared for Dragas early last month identifies many of the same problems Dragas cited — on her own, as she would have us believe — that led her to the conclusion Sullivan had to go.

    I, at least, can now say that I think this is the story: A rich (and therefore powerful) donor and the rector think they know more about higher ed than the professionals hired to run the University. Couple that with a personality clash between the president and the rector, it’s fairly certain egos and big-time money did in President Sullivan.

    And I’m disgusted by it all. I’ve said all along, I have no basis to judge President Sullivan’s effectiveness (or lack thereof), but am angry and outraged by the underhanded process by which Dragas and the Visitors engineered Sullivan’s ouster. The damage they are inflicting upon the University is incalculable.

    1. I doubt that anyone on the BoV wants UVa to become remotely like the University of Phoenix. As an alumnus, I certainly don’t. But I do believe the University needs a plan to survive in a world that is full of for-profit University of Phoenixes and not-for-profit Udacities. Also, UVa, like every other institution of higher learning, must come to grips with the fact that tuitions are out of control and that an entire generation of college students is going into indebted bondage to pay for their educations.

      1. jlanderson Avatar

        I don’t disagree with you about the rising cost of tuition. Plugging into a CPI-based inflation calculator the roughly $8,000 that my dad paid for a year of tuition and room and board in 1980 for me, it comes out to approximately $18.400 in 2010 dollars. According to the UVa website, the estimated yearly cost for an in-state student is approximately $24,000.

        That’s quite a gap, and one that policymakers must address.

        But it also spans the period of time in which state support of public institutions in Virginia declined dramatically. Some of the drops corresponded to economic downturns of the past three decades, but the overall trend can be attributed to shortsighted, tax-averse members of the General Assembly who just do NOT want to do their jobs as elected leaders and make the tough choices required of them.

        Just as the General Assembly has pushed more responsibilities down onto local governments over the past 25 years or so, forcing them to do and pay for what are essentially state duties, so too has the Assembly done the same to public institutions of higher education. Admit more in-state students, freeze your tuition, blah, blah, blah.

        Local governments, however, have the option to turn to their own taxpayers to fund what the state won’t. Even then, Richmond has the audacity to require local governments remit “Aid to the Commonwealth” checks.

        Universities, though, have only tuition and donors as sources of revenue. It’s just a catch-22 situation for them.

      2. FreeDem Avatar

        >But I do believe the University needs a plan to survive in a world that is full of for-profit University of Phoenixes and not-for-profit Udacities.

        Yes. And that strategy is to offer the quality of an actual academic experience on a real campus, with a historical quality to boot. The for-profits and not-for-profits driving change in higher education are looking at the masses, they will ultimately be competing with the community colleges and the lower tier universities of today.

        But you’ll always have a group of more affluent, upscale, overachievers from wealthy families that want the status symbol of sending their boys and girls off to a real college, with old brick buildings and fraternity houses. UVA is well positioned for that market, but it means resisting the demands of the Commonwealth to turn itself into a massive public university on the scale of other states.

    2. Regarding your point three, read this post — it’s a critique of Sullivan’s strategy memo. I don’t think Sullivan’s vision is very close at all to what the BoV, rightly or wrongly, is looking for from a university president.

  2. With regard to the student loan crisis one should remember that students do not just borrow for tuition. They borrow to maintain a middle-class lifestyle. Student loan money frequently pays for iPhone monthly bills, car payments, cable TV, good apartment living, dining out. I went to a private Virginia college in the 1970s and had no car, TV, or phone, and lived once off campus in a log cabin. The money I made in the summer went to tuition. No debt. Universities have no control of the fiscal irresponsibility of students and their families.

    Making faculty teach more isn’t going to help much. Administrative bloat is a much bigger problem, and world-class research faculty will clear out instantly if punished by teaching loads much greater than their peers nationwide. There is no such thing as a world-class deanlet.

    1. Interesting point about borrowing to maintain middle-class living standards. When I went to UVa back in ’71, it was two people to a small dormitory room. (It still is for some, I think.) But on many campuses, there is a widespread desire for private rooms. Likewise, I never had a car until I graduated. Young people are very casual today about racking up debt. They’ve absorbed all the worst lessons from their Baby Boomer parents.

  3. mindful Avatar

    One can make just as good an argument that a “revolutionary” approach to changes in higher education, and particularly to one of this country’s oldest universities, should be done with great care. Since education has much to do with the transmission of wisdom and knowledge accumulated over centuries, perhaps an evolutionary approach is more fitting to the UVa’s core mission.

    Where is the concept of humility or at least knowing enough to you know that you don’t know all of the answers here?

    As for the value on online education, it has tremendous potential especially for professional training, but will never replace the human interaction that occurs in a classroom. And you can bet your last dollar that the ultra-wealthy members of the BoV would never consider allowing their own children to be schooled primarily through online instruction.

    I worry that one consequence, perhaps unintended, of a rush into online schooling will be to create a tiered educational system in this country, in which only the privileged will have access to anything like a real college education.

    1. Regarding your fear that a “tiered educational system” might emerge?

      What do we have now, if not a tiered educational system? A very, very expensive tiered educational system.

      1. mindful Avatar

        We may have a tiered system — but it could be much worse than it is right now. Incidentally, those who suffer the most under the current system are from middle to upper-middle class families that don’t qualify for financial aid. (Try being from a family of five children with seven years between the oldest and youngest, and being told that you were too well-off to qualify.)

        I’m in a profession that requires continuing education, and I think some of the online courses available in my field have been a wonderful innovation. But they have limitations– the biggest one being that there is no opportunity to ask questions. How do you think that would play in a college environment?

        Plus, there is too much related to the U.Va. story that doesn’t smell right– they way the “emergency meeting” was held, the involvement of wealthy contributors who many speculate have financial interests in online education, — and last but not least — the fact that Sullivan was told to vacate the home provided to her in a very short period of time. When all of the facts are known, I suspect that Dragas will become radioactive.

        BTW — I live in Charlottesville and have been following this story closely.

        1. FreeDem Avatar

          >(Try being from a family of five children with seven years between the oldest and youngest, and being told that you were too well-off to qualify.)

          While I’m sure you can whip out anecdotes, only 4 percent of women have five or more children. In the era of birth control, why should it be the responsibility of the state to subsidize your decision to have a large number of children?

  4. Why is it wrong to hold higher education officials to a duty to control costs? How angry would the public be were groceries, prescription drugs, electricity, clothing to have increased at the same rate higher education costs have? It is not the responsibility of taxpayers to fund institutions that cannot keep their costs in line with increases in inflation or, better yet, personal income. It’s time the public sector learned what most of us in the private sector have been doing for years — produce more and better with less. The problem may not be too many college presidents have been fired. It may well be too few have.

  5. Costs have gone up in part because income has gone down from the state. This is a fact. And of course universities can do a better job–cutting administrative bloat and getting rid of the nonsense imposed by the General Assembly for starters.

    “How angry would the public be were groceries, prescription drugs, electricity, clothing to have increased at the same rate higher education costs have?”

    No angrier than you appear to be. But I’d check your figures on the total cost of prescription drugs — what’s your starting date? Which drugs? And you left out gasoline. I remember gas @ 30¢ a gallon and have seen it push towards $5.

    “It is not the responsibility of taxpayers to fund institutions that cannot keep their costs in line with increases in inflation.”

    Now for the laughing out loud part: we continue with the DoD don’t we? Price of a Mustang fighter in 1950? $40,000. Price of an F22 in 2012? $150,000,000.

    Lest you object, do you have any clue how much more it costs to set up a nano-technology lab than a lab in 1950?

    1. Will, permit me to correct you. *Tuitions* have gone up, in part, because of diminished state support. However, *costs* have escalated consistently faster than inflation. Thus, rising costs are a big part of the problem.

      And, yes, you are correct that the cost of military hardware has gone up just as fast, and so has health care. Do you see a common denominator? Education… health care… the military… Think real hard what it might be.

  6. “Do you see a common denominator? Education… health care… the military… Think real hard what it might be.”

    Let’s see . . . . what might it be? Profiteering by private corporations as part of the military-industrial complex Eisenhower warned us against? . . . no. Operating the most expensive health care system in the world–because it is the only one that allows unfettered profit-taking off of sick and dying people? . . . can’t find a common ground there. Education . . . well, there is a serious rise in anti-intellectual business schools, who build gigantic palaces and pay their faculty 2-3 times the wages of a Classics professor, but I’m having a hard time linking these up. I’m stumped.

  7. Unless you accept the proposition that human beings in some industries are greedier than in others, there must be a reason why some industries experience consistently rising costs while others do not. Could it have something to do with the way the industries are structured? I’m thinking, I’m thinking, what could that common denominator be?

  8. Ah, I know! Lack of competition! That’s because everything–all the way to the end of the milky way galaxy–should be run “lak a bidness.”

    Except Education and defense are not businesses, and health care shouldn’t be.

    1. You’re getting close. Universities have plenty of competition. It’s just the wrong kind of competition — for prestige, not profit, so there’s no real bottom line.

      No, the problem is that government, in its infinite compassion and wisdom, is the ultimate cause of the dysfunction. In higher ed, the federal government fed the tuition boom through a massive and unsustainable program of student lending. As long as students could borrow more, higher ed could raise charges with impunity. As long as it could raise charges, it never had to make hard choices. Now students/parents are in rebellion, and computerized/distance education provides them a less expensive alternative to the traditional model. The system may not collapse, but there’s going to be a lot of blood on the floor. The UVa board just gets it before most others.

  9. “The UVa board just gets it before most others.”

    No, they’re clueless. This “getting it” about changes that are going to work out over the next decade hardly mandated an “emergency meeting” that resulted in instability and a few million dollars worth of bad publicity–especially when Sullivan’s writings show that she got it as well and was willing to work with the board. If she had sacked a handful of Classics professors at the whim of a condo developer she would really have caused an uproar.

    Distance education has been around forever. Trinity College Dublin had a version of it in the 18th-century. It’s not new and calling it “on-line” isn’t going to change that much. It’s only significantly cheaper if you use contract labour and pay them by the head. On-line courses for 18 year olds result in a higher rate of DWF, as its called in the trade–many are just not self-starters and being alone with a computer screen leads to other sorts of play. Hybrid courses can work well in some disciplines. Everybody is making incremental changes. No major university in the country has reacted the way Dragas–or whoever she’s a front for– thinks Virginia should.

    Now if we turn to a straight competition for profits, everything changes. Gone will be unproductive graduate programs in theoretical physics and pure sciences, classics, etc. In will come even more “Mass Comm” majors taught cheaply by adjuncts on-line with the promise of a job as a TV weather girl at the end of the road. Out will go research, in will come recruiters paid by the head. I have friends who teach at the for-profits and what they tell me is disturbing.

    Not too long ago a state-sponsored university education was thought of as preparation for citizens to be leaders in a democracy. Now it’s seen as a job-training subsidy for major corporations. The job-training cadre has been prepared to tolerate the vestiges of the arts and sciences. After all, when you take all the tuition dollars paid for humanities courses and deduct the costs of those departments, you show a nice profit. But now it seems like they’re going after the liberal arts with sheer malice. Perhaps they’re so dumb they think “liberal” always means the same thing? Like you and the word “government”?

    1. I totally agree that the BoV bungled the way it handled the Sullivan resignation. I’ve made that point repeatedly in my blog posts. That’s one set of issues. But the other set of issues is how to cope with the crisis in higher ed. Like you, I am dubious that a career-college approach to online learning is anything that UVa would want to try. But, then, I don’t know anyone who thinks UVa should emulate career colleges. You’re creating a straw man.

      The question, which you consistently dodge, is what’s the plan? What’s the plan for constraining costs? How will UVa position itself in an era of increased online education? I haven’t seen such a plan. The BoV is correct to want one.

  10. But it’s your straw I was responding to: “Universities have plenty of competition. It’s just the wrong kind of competition — for prestige, not profit, so there’s no real bottom line.”

    But we can clear that rick off. The board should have worked with Sullivan the way the VCU board has done with Michael Rao. If Sullivan was “insubordinate”–which may be so because she is obviously a lot smarter and more knowledgeable about higher education and specifically higher education finances than Ms Dragas, then the Rector should say so that she feels she’s the boss and that she canned an employee who didn’t say “Yes Ma’am” when ordered to gut a Department that has been considered for 600 years the sine qua non of “University.” But is that what the “Board of Visitors” should be doing?

  11. FreeDem Avatar

    This is the root of the problem:

    “Our competitor public institutions are typically much larger, and we have foregone the economies of scale they can achieve in favor of an emphasis on smaller courses and closer interaction. Our competitor private institutions are typically smaller, but do not face the political pressures to grow in the service of the Commonwealth that we feel.”

    The politics of Virginia are working to destroy the caliber of Virginia’s high ranking public universities (UVA, WM). Affluent suburbanites raising spoiled, selfish little brats in Northern Virginia believe they have a divine right to get into UVA and/or WM. Other quality public institutions like GMU, JMU, and CNU are not good enough for them. So the pressure is on our top publics to keep expanding and expanding, taking in more and more in state students, regardless of quality.

    The push by WM a few years ago under their own President Sullivan to become more independent from the state was the right direction for the schools.

  12. WahooLaw Avatar

    I think you and Dragas fail to understand how difficult universities are to manage, and why incremental change may be the only immediate option. The academic side of universities (i.e., the part that makes U.Va. worth worrying about) can be led but cannot easily be controlled. The Board and the donors behind the Board don’t seem to get that change in an academic institution cannot be imposed from above, but must be achieved through consensus. In the best of times, this would have been hard to achieve at U.Va., but the Board’s panicked Chicken Little response to disruptive change on the horizon has just created fault lines that will make it exponentially harder.

    The core issue in managing a university is that the faculty have tenure and have extensive power over the curriculum due to accepted concepts of academic freedom. What’s more, the reputation building faculty are remarkably mobile – their publication records make them easy to identify, and in many fields their grants and key staff can go with them. Once you understand that you must inspire the good ones to keep them, can’t easily fire the bad ones, and have limited control even over what’s taught in a given course, the correct approach becomes obvious – this is not an environment where fiat works. Great university presidents inspire and enable, rather than direct.

    Leadership takes time. Goals have to be identified, trust has to be built, and the sale made over and over again.

    I think Jones, Kiernan, and some of the other background players screwed up so badly here perhaps because they come from financial, ‘do the deal’ environments. Financial organizations are relatively small for the money involved, and staffed with highly motivated people who are easier to control with money. You move quickly to get the deal done, and move on to the next one. Rapid top down change works in that environment, but universities are a very different kind of organization.

    The screw up is all the more troubling because the board members are right about one thing – radical change is headed to higher education, and even to elite schools like U.Va. It’s not just the internet. Computerized courseware allows much of the routine information transmission and routine skill building to be offloaded to machines. If you have read Clayton Christensen’s work, you understand that the early adopters will be the lower tier offering education to people who otherwise could not afford it, but these technologies will march up the value network. Already, they aren’t bad – questions can easily be asked, forums and chat rooms can expand on lectures, conference technology can bring together faculty and students from around the world. It might be U. Phoenix today, but in time the better schools will be incorporating all this technology. It will change the resources needed, and will require schools to think hard about their mission and goals. Commoditized schools that just offer a credential useful to employers will be the first hit, and some may not survive in their current form. Christensen sees the disruption reaching all the way to the Ivy League in the end, however, and that would imply that U.Va. really can’t safely rest on its laurels. And that doesn’t even get to globalization, which is hitting higher education today the way it hit business a generation back, with forward thinking schools taking their brand worldwide.

    In light of the coming disruptive change, what’s needed is a coherent strategy. Again, this isn’t something you can order from a catalog, but something that has to be developed in light U.Va.’s resources, capabilities and mission. Technology will commoditize some aspects of education, but will create opportunities for enhanced experience at other levels (why not, for instance, use the kind of video conferencing routinely used by law firms and businesses to integrate students from Buenos Aires or Santiago de Chile in Spanish literature or history seminars?) It’s hard to instantly and radically change an established and successful organization in light of impending change, and impossible without remarkably effective leadership. The saddest thing about the way the mediocrities on the Board have handled this is that they’ve empowered the traditionalists in a way that makes developing a coherent, forward looking strategy more rather than less difficult.

    One final point – the managerial screw ups here are the kinds of things that anyone who has gone to a decent business school learns to avoid in the first year of case studies. All the the leaders of this catastrophe are not only Darden graduates but closely linked with today’s Darden. It makes me wonder about Darden.

    1. Well stated. The organizational culture of a university is very different from a corporation. You cannot impose top-down change without creating a furor. My only point of disagreement is that the BoV is not trying to micromanage that change. They just want a strategic plan. And Sullivan did not deliver one. Her “academic strategy” was not a plan, it had hints and suggestions, some very tentative, that might one day become a plan.

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