President's Campus Communications - Sustainable Cost Savings
Sept. 30, 2010
Many thanks to everyone who came to the State of the University Address last week. We’ve since posted the video, text and background materials on the President’s Office website.
As promised, I’m writing with further explanation of the “non-process” we’re using to identify sustainable cost savings.
But first, here’s a quick recap of what brings us to this point. As you know, we began preparing last fall for a $14-million loss in state funding over two or three years. We’ve already lost $3.5 million, as reflected in our current budget, and we’re planning for an additional $10.5-million reduction. This does not, however, mean we have to cut $10.5 million from next year’s budget. We have four tools to manage the loss of state funding: revenue generation, reserves, cost savings and budget reductions. We’ll continue our focus on generating revenue with increases in both enrollment and tuition. We’ve also set aside a reserve we will use to smooth out the funding decrease over three years. And by identifying sustainable cost savings, we can minimize the need to make self-destructive budget cuts. Based on our five-year projections (which you can read about at FinancialPlanningDocumentBOT_Retreat.pdf) we think it’s reasonable to address approximately half of the $10.5-million cut with revenue growth. This means our goal for cost savings needs to be at least $5 million. We will identify the savings this year, but we’ll spread out their implementation over the next three years.
To identify these cost savings, we’re using a campus-wide brainstorming “non-process” to generate as many ideas as possible in the freest possible environment.
We’re looking for sustainable cost savings—things that are relatively permanent and ongoing. This is not about finding one-time savings that just tide us over to the next year. It’s not about eliminating or temporarily suspending necessary expenditures. It’s not about pointing to something (or someone) else that should be cut. And it does not replace the daily operational decisions we have to make about things such as budgets and hiring plans. This is an opportunity to liberate ourselves from thinking about doing more with less or the same with less, and to think instead about how to operate differently. As I said in the State of the University Address, we’re not going to sell our soul, but neither can we assume that everything we’re doing now is perfectly thought-out and organized.
The key question for this non-process is: How can we reinvent our operations in ways that improve our effectiveness, make UNC a better place to work, and also save money? This could include thinking about questions such as…
- Do we have processes that get in the way of fulfilling our mission?
- What is the purpose of a process or activity?
- Do we have practices or processes that are seemingly pointless?
- Have we centralized functions that we could do better if they were less centralized?
- Are there decentralized functions we could do better if they were more centralized?
- Where and how are we duplicating efforts?
- Are we using some procedures that simply aren’t effective?
- Is another unit using a process or procedure that might be helpful in your area?
- Do we provide services or functions that very few people seem to use?
- Why are we doing (you fill in the blank) that way?
Participation in the non-process is entirely voluntary, but its success depends on broad campus involvement. As we think about how to reinvent our operations, my request to you is that you talk not only with close friends and colleagues, but also with campus community members who aren’t affiliated with your area of expertise, discipline or unit. I encourage you to pull together or join an eclectic group of people who bring diverse perspectives, experiences and expertise to the conversation. One of the reasons for doing this in such an informal and unstructured way is to remove barriers or concerns that might be created, however unintentionally, by our organizational structure. In fact, in the spirit of moving entirely off the organizational chart for this work, I’m asking that our Vice Presidents and Deans not assemble or lead teams.
The first round of the non-process will go through October 20. The goal is to collect as many ideas as possible at this stage. It’s about brainstorming, so ideas don’t have to be fleshed out in perfect detail. You can submit ideas at http://www.unco.edu/pres/ideas/ or by clicking the “Sustainable Cost Savings Ideas” button on the President’s Office webpage. Submissions should not include the names or positions of the person submitting the information or the team members who worked on it. My office will compile all of the ideas submitted, with no filtering or prioritizing.
The second round of work will begin October 25, when we will share with campus all of the ideas gathered during “round one” as well as data and background information that might be helpful in further discussions. This stage is about refining, critiquing, fact checking and reality checking, and will use the same self-organized teams approach. We will set the end date for this phase of work after we get a better idea of how much work there is to be done.
I will be sending periodic updates and will continue to and post information on the President’s Office webpage. In the meantime, if you have questions about the non-process, please e-mail OfficeofthePresident@unco.edu.