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The President and Finance

  • By Dr. Scott D. Miller, Dr. Marylouise Fennell
  • 03/01/14

For many years we led the popular Council of Independent Colleges (CIC) New Presidents Program. We consistently heard that many new presidents lacked basic experience in finance, which could set them up for failure.

Our colleague Dr. James L. Fisher, noted author, former university president and president-emeritus of the Council for Advancement and Support of Education (CASE), recommends that new presidents appoint superior individuals as chief financial officers because they are critical to accomplishing institutional goals. “Their task,” according to Fisher, “is to financially implement effectively the president’s plans and dreams, which they have helped to shape.”

Although higher education has often been slow to implement a customer-oriented business model, new campus CEOs should analyze the strategies of effective corporate leaders in allocating resources, insisting on best business practices and evaluating staff.

Allocate Resources Quickly

A recent analysis by the management consulting journal The McKinsey Quarterly suggests that new CEOs earn superior results when they shift human and capital resources early in their tenure. Because the “honeymoon” period is ephemeral, presidents must capitalize on this fleeting time to enact transformational change.

Follow Best Practices

Not only is it possible to apply best business practices to academe without compromising academic quality, but doing so can also enhance instructional rigor as well as the entire learning process. Thus, we suggest:

  • Evaluate teaching loads and staff efficiency. Increasing teaching loads to 12 or even 15 hours per semester need not alienate faculty, governing boards or accrediting agencies. Consider performance bonuses to motivate faculty and other employees. Evaluate staff efficiency with regular reviews of operational effectiveness.
  • Strengthen evaluations. To enhance teaching quality, all faculty evaluations should include student, peer and supervisor assessments. To help measure institutional effectiveness, we recommend systematic post-tenure review and assessment by external measurements of students’ academic achievements.
  • Encourage entrepreneurship. Engage faculty in grant writing, program development, and student recruitment and retention along with other strategies to capitalize on good ideas and to build resources.
  • Reduce administrative overhead. At the senior management level, we recommend no more than four vice presidents. All positions titled “associate” or “assistant” should be scrutinized as to whether they are necessary.
  • Cut the institutional allocation in financial aid. Instead, concentrate on public funds or special scholarships. Some enlightened presidents have turned their institutions around within two fiscal years by halting altogether the insidious practice of tuition discounting, which drains the operation of needed funds.
  • Invest in marketing. Put more money into marketing than into fundraising. Advertising and promotion across all marketing platforms can produce needed results in terms of visibility, enrollment and annual fund support, while major-gift fundraising typically takes three to five years of consistent, focused effort to pay off. Make sure your institutional image and messages to constituents are consistent, with user-friendly web services.
  • Outsource services. In addition to dining services, bookstores and student housing/maintenance, we’ve had excellent results outsourcing payroll services, some information technology, campus safety/security and financial aid services.
  • Lease space rather than build. Before taking on a heavy construction debt load, consider leasing. If new facilities are constructed, design them with an alternative use in mind.
  • Study trends. Paying attention to student and parent expectations, career trends, technological innovations and learning methodologies is critical to effective strategic planning and serving your student clients. Ignore social, economic and cultural realities at your peril.

Using such business and financial strategies, a CEO can reduce an institution’s annual operating budget while positioning the campus for greater visibility and enrollment growth.

This article originally appeared in the issue of .

About the Authors

Dr. Scott D. Miller is president of Virginia Wesleyan College in Norfolk/Virginia Beach, Virginia. He was previously president of Bethany College, Wesley College, and Lincoln Memorial University. He is chair of the Board of Directors of Academic Search, Inc. and serves as a consultant to college presidents and boards.

Dr. Marylouise Fennell, RSM, a former president of Carlow University, is senior counsel for the Council of Independent Colleges (CIC) and principal of Hyatt Fennell, a higher education search firm.

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