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Using Your First Summer

Using Your First Summer
June 17, 2011

For new presidents, the summer provides extraordinary opportunity to make an early impression that convinces constituencies on and off campus that you have a good grasp of your new institution, understand its (and their) needs, and will be effective in your role. The summer gives you an opportunity to earn trust, respect, and legitimacy. But, how, exactly do you, as a new president, approach that task in a difficult environment?

Higher education has, as everyone knows, been severely stressed in the past several years. Between fiscal year 2007’s end and FY 2009’s end, independent institutions on average lost approximately 25 percent of their financial net worth, according to studies I have done of hundreds of IRS 990 forms from GuideStar.org. It’s likely that the recovery will be a slow one for many schools. The reason for this is simple: income has fallen but expenses haven’t kept pace.

Colleges’ main income source, net tuition revenue (NTR), continues under severe stress from competition and discount rates that spiked during the downturn and have yet to turn back down. Other income sources are not making up for NTR's fall. Government student financial aid from many states has been dropping and federal aid is poised to follow. Other government aid, e.g., earmarks and similar discretionary items, is a prime target of budget-cutters. Private gifts have taken a major hit; some recovery is starting but is unlikely to make up for the rest of the bad news.

On the expense front, institutions have made savings from personnel lines by holding salary increases to a minimum, lowering contributions for retirement accounts and health insurance, and leaving vacant positions unfilled. They have also done across-the-board budget reductions, as well as more targeted cuts in some cases. Due to the suddenness of the onslaught of the financial and market downturns, institutions have had a challenge to respond coherently and strategically. Many have simply scrambled to minimize damage.

That brings us to the opportunity facing new presidents. Paradoxically, you may find good fortune in the timing of your arrival into office, if your institution is still stressed from the economic fall. If so, chances are good that your people are tired, occasionally depressed and inclined to pessimism, but hopeful. Your arrival may be a major source of whatever optimism they feel. That means you may have their assistance in becoming a "turnaround" president who stabilizes their institution.

But first, you need to know that much of the optimism that folks are feeling can be uncritical and unrealistic, nostalgia for a past that won’t recur. Your challenge is to help them see that realism is the only way to a better future. There is a good chance they will.

My first advice is: Whatever the health of your institution, use this moment, when people are listening and want to believe in you and what you can accomplish, to set up ground rules that will place your relationship with them on a sound basis. Make clear at the outset that you will follow the rules and that you look forward to their reciprocating:

  • Tell them the truth. Ask them to do the same with you.
  • Work hard to understand what the institution’s situation is. Expect them to help.
  • Neither overstate nor understate issues. Ask them to shun defensiveness and histrionics.
  • "Let the past bury its dead." No one should scapegoat the past or past leadership.
  • Focus on building the strongest possible sustainable future for the institution, together.
  • Neither ask them to do your job of leadership nor presume to do theirs.
  • Move as quickly as is responsible to solve the challenges that confront you and them.
  • Keep them informed and involved. Expect them to give you the same courtesy.
  • Listen carefully to advice, and then make decisions. Expect them to be accepted.
  • Understand and respect the different roles of administration and shared governance.
  • Never promise anything you are not sure you can deliver.

As a new president, you will have a major impact through the tone you set as you begin to lead. Words will be important, but deeds will be crucial. Here is a second piece of career advice: Make it your first priority to understand the institution’s realities. Do not simply depend on what you were told during the search. “Trust but verify!” e.g.:

  • Test the solidity of revenue and expense budgets.
  • Look for “optimism” that makes budget numbers suspect.
  • Identify unsound practices (e.g. budgeting large bequests) underlying numbers.
  • Ensure that institutional budgeting reflects an understanding of both present and future needs through such practices as funding depreciation and real margins.
  • Understand the realities of your admissions “funnel,” discounting, competitive forces and how they are changing, strategic weaknesses, and forces driving attrition.

As an incoming president, use your first summer to develop a deep understanding of the strategic realities you face from curb appeal to structural deficit and then report to your constituencies on what you have found and what you intend to do. You need to know the real picture before you can lay meaningful plans, and so do the board and the campus. The best compliment you can pay people is to trust them with the truth.

My third piece of career advice relates to a one-time opportunity to lead from the front: Now that you know the facts, figure out what you and your close-in team, with the agreement of your board and the understanding of other significant leaders, needs to do administratively to set the institution on a better course now. These are decisions you can take so that the entire campus doesn’t bear the burden for tough, necessary changes, e.g.:

  • Review major contracts to identify waste.
  • Look for administrative positions created just to save a job for someone.
  • Look for administrative positions added because a new task was identified and someone was hired for it without consideration of alternative ways to accomplish the work.
  • Review administrative organization to identify opportunities for consolidation.

You are the president and one reason you were hired was to bring a fresh perspective to the work of the institution, so, figure out what needs doing in and around the administration, and do it! Do not accept the statement: “We’ve already made all the cuts we possibly can -- we are down to flesh, muscle and bone.” That statement is never true. You will gain credibility by leading from the front.

My fourth piece of advice is a caution: Do not do administratively things that your institution’s by-laws, culture, and/or traditions require to be done through governance channels. On the other hand, do not automatically assume that everything has to go through those channels. Understand clearly what is administrative and what is subject to governance. To the extent possible (your board chair and dean can be sources of guidance on this), focus on the former to do as quickly as you can while doing them well.

My fifth and final piece of advice is to get on with it: Do not delay personnel changes out of a misplaced humanitarianism. If you know a change must be made, “…then ‘twere well it were done quickly….” The more time people have to prepare a new career direction, the more likely they will be to succeed. The most humane course is usually the quickest. People often know they are in a threatened place and worry, even if they say nothing. Better they know with certainty that they need to move on so they can “get on with it,” too.

This is not an invitation to high-handed unilateralism. What I advise is a philosophy of action-oriented, fact-based, collegial, transparent management, particularly concerning administrative matters.

The summers before and after a new president’s first year are consequential for setting tone and agenda for a presidency. Given the economic challenges our institutions face now, a new president’s first year and the summers that precede and follow are even more important than usual. Use them to tell and show people that you are prepared to be an effective, transparent, lead-from-the-front president who does heavy lifting, creates momentum, and moves the institution forward collegially. Oh, by the way, take time to recharge your batteries. Before and after all the hard work, you also need to play!

Bio

Richard Kneedler is president emeritus of Franklin & Marshall College and a consultant and operating officer with Ann Duffield & Colleagues, a firm providing strategic counsel to college and university chief executives and boards. He previously served as interim president of Rockford College.

 

 

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