Wild about Woo

I’ve been pretty tough on my alma mater in the Bacon’s Rebellion blog, but I’m detecting positive auras and penumbra emanating from Charlottesville these days. In a recent speech, Meredith Woo, dean of the College of Arts & Sciences at the University of Virginia, said some surprising things. First, she extolled the value of “virtue and character” — concepts that I thought had largely died out in Higher Education as hopelessly antiquated, bourgeois and politically incorrect. It’s good to know that someone still champions them.

Further, Woo indicated a willingness to make the kind of hard choices that leading universities must make in order to constrain costs while also pursuing excellence. Reading between the lines, I see her taking a page out of the business playbook. UVa, she seems to say, should reallocate resources from fields that generate a return on investment to fields that generate a higher rate of return.

As we remap the intellectual strengths of the College, we also need to make choices about the areas—or subfields—that need to be accentuated and nurtured, as we prune weak or unnecessary branches. No university has every possible department and no department has every possible subfield. We will endeavor to be known for the fields and subfields—some old, some new—in which we have unquestionable strength.

That is a greater departure from the conventional wisdom in academia than it might appear. In “The Revenue-to-Cost Spiral in Higher Education,” Robert E. Martin explains the inflationary bias in the price of higher education (a topic that I blog about with some frequency). Higher Ed is dominated overwhelmingly by not-for-profits, he says. Instead of maximizing profits, universities exist to maximize institutional prestige, which they accomplish by recruiting prestigious faculty, admitting students with the highest SAT scores, building championship athletic programs, erecting magnificent new buildings and the like — all of which require spending more money.

There are no financial metrics such as Return on Equity or Return on Investment in academia by which to measure performance. Even if such metrics existed, it wouldn’t matter. There are no outside parties, as there are in the for-profit economy, to discipline under-performing management teams via buyouts or takeovers. Accountable to no one, university managements pursue their own agendas.

Colleges and universities allocate resources largely on the basis of internal politics, in which the interests of administrators prevail over those of the faculty, boards of trustees, alumni and students. “The incentives in higher education … lead to a bias against reform and a bias toward increasing revenues,” writes Miller. Enacting painful cuts to under-performing programs leads to controversy and unpleasantness. It’s far easier to fund new initiatives by seeking money from outside sources. Universities, unlike private companies, feel very little pressure to reallocate resources to uses that generate a higher return.

If I read Woo correctly, she is bucking the trend. Perhaps it’s wishful thinking on my part but the new management team at Virginia — Teresa Sullivan as president, Woo as dean — is off to a promising start.

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23 responses to “Wild about Woo”

  1. Gooze Views Avatar
    Gooze Views

    Hey Hoo!
    Applying the business school template for a very good university is simply stupid. That's not the point of education. You try to do the same for health care and it is also stupid.
    Eudcation is to open the mind. Health care is to combat disease and injury.
    Neither is about ROI, ROE,P/e ratios, EBITDA or other biz terms. What you are proposing is S-H-I-T.

    Peter Galuszka

  2. James A. Bacon Avatar
    James A. Bacon

    Peter, If the best you can come up with is to label my ideas as "stupid" or "S-H-I-T", that's pretty pathetic.

  3. Gooze Views Avatar
    Gooze Views

    But Jim,
    It's the same old business principles crap. If you followed that, you'd have no art, no music, nothing at any way scientifically unique or unusual. You would only concentrate on what might be money-making now.That is the big problem with American business and you want to take their bad examples and bad results and ruin some good institutions.
    Also, you come at this from a basis that assumes they are bad, wasteful, immoral, non-conservative, whatever. And you never back any of this up. We are supposed to assuem, as you do that you are right and that we can reach into our market basket of free market tricks and everything will be fine and dandy. Why don't you get a job in the McDonnell administration?
    This approach is intellectually bankrupt. In other words, as Pushkin might say, it is S-H-I-T. Sorry if you are not used to push-back but you deserve it in this case.

    Peter Galuszka

  4. Groveton Avatar

    "It's the same old business principles crap. If you followed that, you'd have no art, no music, nothing at any way scientifically unique or unusual. You would only concentrate on what might be money-making now.That is the big problem with American business and you want to take their bad examples and bad results and ruin some good institutions.".

    Wow!

    The "progressives" are getting testy ahead of next Tuesday's election.

    No music? When you want to buy some music do you drive to the University of Virginia and walk into the "music dorm"? Or, do you go to iTunes (operated by a for-profit company) and download a song produced by a record label (a for profit company) made by musicians (who profit immensely from their efforts) using instruments made by companies like the Fender Musical Instrument Company (a private, for profit company). I guess they teach music at UVa. No doubt that's where Kid Rock and 50 Cent got their music degrees.

    Art is a pretty broad topic. Picasso? Owned huge homes and multiple villas in the south of France. Did some university fund his extravagant lifestyle? Michelangelo's State of David? Funded by the Guild of Wool (a collection of for profit merchants).

    Scientifically unique? The transistor? Invented at Bell Labs. Microprocessor? Intel (although that could be debated by two other for profit companies). The blog you are presently reading? Google.

    Busines principles drove each and every one of those artists, musicians and inventions.

  5. Can someone give an example of a University that does what is being advocated?

    Surely in a world of 131 countries there must be a few Universities that pay for themselves, eh?

    or is the a worldwide conspiracy of feckless Universities preying on hapless tuition-payers – the world over?

    How about China?

    would they be closer to the "model" than US Higher Ed?

  6. Gooze Views Avatar
    Gooze Views

    Groveton,
    P– O–. Maybe you smell blood but I bet it won't be what you imagine

    Meanwhile, hands off universities!

    (Dito for Cooch)

    Peter Galuszka

  7. There are no financial metrics such as Return on Equity or Return on Investment in academia by which to measure performance.

    ================================

    An academic institution has a net worth like anything else. All those edifices and the endowment, and the drawing power of big names add up to more donations.

    This doesn't necessarily translate to lower costs to the student because it also represents higher opportunities.

    Like Obamacare is going to cost us more, but there is more oportunity to collect something of what we pay.

  8. You can can music in an Ipod the same way Campbells makes chicken soup.

    Then there is chicken soup artistry as in La Bergerie or Auberge Chez Francois.

    Making money and making art are not the same thing. Remember the story of the famous musician who played his violin at a Metro stop all day?

    Only a handful of people recognized the rare treat they were being handed. And the guy only collected a few bucks.

    Of course, for some people, making money is the only art form.

  9. Groveton Avatar

    "Making money and making art are not the same thing. Remember the story of the famous musician who played his violin at a Metro stop all day?".

    Yeah, and I remember Michael Jackson too. And Jimmy Buffet, Mick Jagger, the three tenors, etc.

    Pavarotti's estate was estimated to be at least $100M at the time of his death.

    For every world class virtuoso playing for coins by a Metro station there are 100 world class musicians stuffing money into their pockets.

    There are very few global social realities. One is this, "Talent follows money and money follows talent.".

    I've been involved a bit in music. I know lots of very good musicians. Professional musicians. Most of them can earn a living with music. I also know two great musicians. They are both filthy rich. When you listen to the very good musicians play … they sound brilliant. Then you listen to the great musicians play. No comparison. Even to a tin ear like mine.

    Carlos Santana? Big time liberal. Super spiritual. Learned to meditate with an Indian guru. Hero of the impoverished. I guess he would have no use for money. Don't make me laugh. He has a net worth of $40M but he just opened a chain of upscale Mexican restaurants. I guess the $40M wasn't enough.

    Hydra … you believe in fairy tales. A world full of talented people who have no use for money. You see armies of virtuosos playing violin for coins thrown into the open violin case. I see Kid Rock acting like a poor redneck but living like a Saudi prince.

    You figure Yo-Yo Ma lives in a shack?

    Don't drink the Cool Aid Hydra. Talented musicians love money, talented artists love money, talented actors love money.

    But not liberals surely!

    Liza Minelli net worth – $50M.
    Robert Redford net worth – $600M.
    Julia Roberts – $140m.

    These liberals are playing you Hydra. They want people like you thinking that "making money and making art are not the same thing". Otherwise, you might resent shelling out $8 for the next lousy Robert Redford movie or $29.95 for Barack Obama's next truly horrible book.

  10. The Guy I referred to makes plenty of money. This was a stunt that was done to see if ordinary people recognized value or virtuosity.

    Clearly they do not, so it is no surprise that so many people make money doing bad jobs at most anything.

    It blows the doors off the idea that a free market produces excellence.

  11. The violinist in question was Joshua bell and he was playing a violin worth millions.

    Nowhere near the same category as the usual squeaking street musician.

  12. I agree it is a scam. A lot of people spend scars of money to attend a fancy school wherefore they cannot avail themselves of a fraction of what they pay for. Like an all you can eat breakfast, who really needs it? However, its a mistake to think that paying to make opportunity available is a waste. The alternative to opportunity is a trap.

  13. Making money from music is like making money from pro sports.

    Groveton actually got the analogy wrong.

    There are many, many more people who play music for pennies or less than millions.

    Just like with pro sports – we are fed daily doses of success -never seeing the millions who tried and did not make the top 1%.

    And that a big, big problem with kids – when the adults are idolizing the 1%.

    I do not think we should EVER crush you people's dreams nor any budding virtuoso in any field even beyond sports and music.

    But for every kid in high school that is a big man on campus – there are dozens… hundreds more that are not and they have nothing else to shoot for because even if they do very good in school – they do not believe they can go on to higher education after school.

    I was one of them.

    No one ever told me that if I got a 3.0 or better than I would be guaranteed a higher education so I graduated and went to work in a Phillips 66 service station after high school part-time jobs selling shoes in Leggets and toys in K-Mart.

    I note that in some inner city urban charter schools – that they have this bargain:

    you graduate with good grades and you get a spot.

    It's the same with our U.S. Military – which has enormously benefited from providing workforce training to anyone who can pass their entrance exam and achieve on merit.

    Our society has corrupted the entire purpose of a College Education …… in my view ..
    and turned it into a career path for those who have money or can figure out how to get money out of the system.

    In the meantime – we have an education system that basically invests in and favors about 25% of the kids – who will then grow up and be taxed out the butt to pay entitlements for 50% of the kids who – though perfectly capable – did not get a sufficient education nor go on to higher education.

  14. Groveton Avatar

    "Making money from music is like making money from pro sports.

    Groveton actually got the analogy wrong.

    There are many, many more people who play music for pennies or less than millions.".

    LarryG – Dear Lord … please try to get the point … just once.

    Take basketball. Millions of people play basketball. That's true but not the point. What do you think the 10 best basketball players on the planet do for a living? Not the millions who play, the very, very best.

    They play basketball professionally for staggering amounts of money.

    Why is Yao Ming in the United States instead of the playgrounds of China? One reason – the money.

    Top talent gets top money.

    In everything.

    There are millions of accountants and financial people in the world. Where are the best? On Wall St, in London, Hong Kong, etc. Why are the best financial people in those places? Because that's where the money is and (let's review) …

    Talent follows money.

    Why did Yao Ming leave China? Why didn't Carlos Santana follow in his father's footsteps and join a local Mexican mariachi band? Why did Vikram Pandit (CEO of Citigroup) move from India to New York?

    Why are universities full of mediocre professors who spend their days clawing each other's eye's out for tenure, textbook deals and research grants?

    Because talent follows money and there isn't much money in those institutions.

    The richest musicians are the best musicians. The richest athletes are the best athletes. The richest accountants are the best accountants.

    Or …

    The best musicians become the richest musicians, the best athletes become the richest athletes, the best accountants become the richest accountants.

    The big question, in this era of pervasive technology, is whether a decent athlete or a decent musician or a decent accountant can earn a living.

    I can improve my golf swing without the local pro's help. I get videotaped hitting a few balls and the videotape is sent over the network to a really good golfer trying to get even richer. The local pro is a decent golfer but now is reduced to operating a video camera.

    The increase in bandwidth at affordable costs lets me watch so-called comedy all day long on the comedy channel. I don't have to go to the local comedy club to watch a decent (but not great) comedian do stand-up.

    Great accountants finesse mergers and acquisitions in Manhattan. Good accountants ply their trade for American companies from Bangalore, India over the internet.

    Liberals should be venting their anger at the loss of jobs for Americans of average to above average talent instead of fuming about the 1-3% of people in all areas of intellectual endeavor who make the most money.

    The problem of too much money at the top is not because the people at the top have cheated. It is because the money in the middle has gone into silicon or India. We still need airline company CEOs – we just don't need travel agents to sell the airline's tickets. Those people have been largely replaced by software.

    So, LarryG – what you rail against with regard to high school athletics is happening now in almost every field. Many aspire to the field but very few will ever be able to earn a decent living in that field.

    The great athletes didn't make the average kid aspire for something he or she couldn't attain. And the rich CEOs don't tell average kids that studying subjects that can be accomplished by computers is a good idea. No, that bad advice is coming from people like you who think advanced studies is only for the rich kids. Here's the sad truth in America – advanced studies better become the norm for all American students or we won't have any more rich kids. Or middle class kids for that matter.

  15. The point of my post was that here is a true virtuoso, playing for free and no one noticed. So much for the efficiency of the free market.

  16. Right. And every city used to have a symphony. But now that everyone can listen to the London symphony, the lesser known ones are out of work.

    I don't buy the idea that the highest paid are the best. Just look at any aging star athlete.

    Talent and skill counts, but there is usually a lot more going on.

  17. Groveton Avatar

    "The point of my post was that here is a true virtuoso, playing for free and no one noticed. So much for the efficiency of the free market.".

    Free market <> mass market.

    Why do you think the people walking into the Metro near your virtuoso represented the free market?

    If I showed your virtuoso the latest network security appliance would he or she see the brilliance in the composite device?

    Hydra – you virtuoso had to go to LA or Nashville or New York and perform for people who risk their own capital in the free market. If they all ignored him – you might have a point.

    But just playing near a Metro stop while people from all walks of life scurried past on their way to work?

    C'mon. That's not an assessment by the free market. Was anybody asked to buy the work? Was anybody asked to invest? Was anybody asked to choose?

    Beyond that – most of the Metro riders were probably government employees anyway.

  18. That's a pretty hefty sample. I would have stopped in my tracks.

    The free market is largely satisfied because consumers have developed low expectations based on the products generally available. Same crappy products in the same prepackaged stores nationwide. Hugely successful corporations supported by a rush to the bottom. Don't get me wrong, I'm in favor of competitive markets, but true competition needs a level playing field which a free market cannot provide. Mogadishu has a market free of government intervention, and it is a mess.

    Minimize total cost where TC=PC+EC+ GC.

    EC, External costs includes not only costs that should have been borne by the production sector, but outright theft by CEOs like Tycoon and Adelphi. ill Adelphi. It also includes the cost of unintended consequences of government regulation, regulatory and enforcement failures, inadvertent and deliberate loss of competition due to stifling or protectionist regulations.

    We need to do a lot better job of measuring and figuring out what works and what doesn't before we swallow all that free market sushi.

  19. I'm guessing half of those people walking past the subway were free market types on our way to sell something to the government.

  20. What do you mean it was not an assessment by the free market?

    It was the highest quality product at a very low price.

    And yet no one was willing to pay. A clear case of market failure, I'd say.

  21. Groveton Avatar

    "What do you mean it was not an assessment by the free market?".

    Too small a sample. Only a small percentage of people like classical music at any quality level. Then, of the people walking into the Metro, only a small percentage is even listening. Of the few who might listen, like classical music and recognize talent … what were they going to do – offer the guy a record contract?

    I would have certainly walked by without another thought. I don't like classical music and I tune everything out when I am commuting.

    Now, put a rockabilly or reggae band in a bar where I've gone for a beer and to listen to music and I might be trying to get them into a studio by the end of the night.

  22. Of the few who might listen, like classical music and recognize talent … what were they going to do – offer the guy a record contract?

    ==================================

    I think that in this case a "purchase" consists exatly of stopping your busy commute to enjoy something new and unususal.

    Your coment epitomizes part of what is wrong with the free market: it does not price externalities, either positive or negative.

    That is also what is wrong with the current popular diatribe against all governement regulation (which is an affront to the free market): it does not price either the the positive benefits from regulation, the negative benefits or unintended consequences, nor does it price the cost of externalities like theft and fraud.

    Some people claim that government is eating up 65% of the economy and we could all double our income by cutting government in half.

    That is patently crazy, and yet some people actually believe it.

    First, if governemt is consuming 65% of the economy, if we cut it in half we would have to increase the consumption pert of the economy by 32% just to break even, because we would have throen that many people out of work.

    That 65% figure includes taxes and the assumed but not measured secondary burden (external costs) of compliance. But the out of pocket cost is only 30%. So If we cut government in half (which isn't going to happen) I save 15% on my taxes. Even if I save another 15% in hidden costs, where am I going to invest 30% such that it DOUBLES my income? And we are ALL going to do that?

    Its a joke. Laughable. Nothing is going to explode the economy like that, and if it does, we are seriously screwed.

    Hell, if I had an investment that good, I'd stop worrying about taxes.

    But yet that is the story that is being told by some free market types.

    ===============================

    A production worker in Vermont makes around $25 an hour, not including benefits. A production worker in China makes $3 an hour, including benefits – and they have a lot more of them.

    They are gettting richer and more urbanized and their currency will devalue. They will be ABLE to buy more American goods, whether they will, or not.

    But even if we reach some kind of parity with China, other places are even cheaper.

    Nothing any politician can do will change that. And if you believe in free market principles, you would say we should stop working in the US and hire other people to do all our work.

  23. Wild about Woo sounds like the title to a dr seuss story.

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