Thinking strategically about priorities based on mission

In recent years, many community colleges have had to come to terms with a structural mismatch between their sources and uses of funding. Instructional expenditures have increased because of the investments in technology, salaries, and benefits. Simultaneously, administrative requirements to track programmatic expenditures, direct and maintain facilities, administer human resource programs, manage categorical programs, and comply with governmental reporting, have become more resource-intensive.

Community colleges struggle with their resource allocation models with an aim to ensure that it is equitable, fair, and objective. Without a strategy, budget difficulties become ongoing debates during budget, planning, and Board meetings. “One-time fixes” frequently do not address the underlying problem. Therefore, many institutions only postpone the inevitable, operating in a classic “downward spiral.” In the process, they drain contingency reserves and human resources to the point where more comprehensive corrective action is simply outside their reach.

Rather than simply reacting to crises or waiting for the State to rectify its funding problems, community colleges should engage the faculty community in understanding the financial implications of such mechanisms as Full-Time Equivalent Students (FTESs) and Weekly Student Contact Hours (WSCHs). Other colleges have found that increases in WSCHs will not only generate more net revenues, but also will help them to be in compliance with the 50% Law.
The preferred strategy is to enhance revenues and capabilities to meet demands, rather than to curtail important educational offerings or restrict enrollments.

Adopting a strategic approach to cost management requires that the colleges revisit and refocus their missions. Within the framework of their missions, the colleges can evaluate individual activities and programs against the goals of that mission. A strategic approach also requires that the institution look outside the boundaries of its four walls, and assess the strategic importance of its programs, facilities, and community service offerings in the broader context of the community. Only through this inside/outside perspective will the unique attributes and qualities of the colleges become apparent. In addition, this perspective is important in helping the colleges to:

• Assess their position in the community
• Understand ways in which external linkages and alliances – partnerships – may be used to reinforce these strategic linkages

Revisiting a college’s mission is no simple task because different programs and areas of the college offer different perspectives and interpretations of the mission. And, at most colleges, this task must be completed using participatory governance principles.

The ideas that KH Consulting Group (KH) will be sharing in the future assume that colleges are capable of self-renewal, have the capacity to increase revenues, and can involve stakeholders in providing input to how they can help the organization and operations overall. This strategic approach presents an alternative to reactionary management and should enable colleges to improve their operations, refocus their programs, and better serve their community needs overall.

Future postings will share ideas about how to do this.

Know-How for Higher Education: Sharing Revenue and Cost Savings Ideas

KH Consulting Group (KH) started this Know-How site in 2009 to create a forum for sharing ideas on effectively enhancing revenues and containing costs in the near and longer term.

The ideas are based on more than 20 years of work with more than 80 colleges and universities. In the 1990s, KH published more than 500 ideas in a booklet called, Beyond the Ivory Tower. This booklet was sold nationwide as a handy reference guide. It was based on an earlier poster of 50 cost-savings ideas that the KH President had worked on while with the Academy for Educational Development (AED) in Washington, D.C.

The ideas shared are not prescriptive and will not work in all situations or at all institutions. Some of the ideas are tactical – quick victories to save money in easy ways. Others are strategic, requiring careful analysis before implementing. The ideas can be grouped typically as strategies and tactics to:

• Manage costs
• Enhance revenues
• Allocate resources more effectively

KH will routinely post a new idea to stimulate thinking about new approaches to addressing the fiscal challenges facing colleges and universities today. We encourage others to share their experiences, reactions, and insights and, thus, form a network of stronger educational institutions that can weather the years ahead.

We hope you find many of these ideas useful.

Gayla Kraetsch Hartsough, Ph.D.
President

KH Consulting Group,1901 Avenue of the Stars, Suite 1900, Los Angeles CA 90067

tel 310.203.5417, fax 310.203.5419, www.KHConsultingGroup.com

Since 1986, KH Consulting Group (KH) has served more than 200 clients in 25 states and 6 foreign countries. We offer management consultant services in strategic planning, organizational structures, business process reengineering, human resources, management audits (including ethics and social responsibility), and accountability and performance measurements.