Thinking Outside the Box
Last year, sizable budget cuts were implemented by the Dartmouth administration, with little noticeable impact on the quality of student life. The newest round of reductions, which may total $100 million, will likely not be as painless. Although some easy cuts may still remain, these easy fixes will not be enough to make up the entirety of the budget shortfall. The time for difficult decisions has come. These cuts will require us to look inward as an institution, deciding which values are fundamental to our mission, and which are negotiable. However, the fact that these decisions must be made on the basis of more essential considerations about Dartmouth's core values does not preclude us from turning to outside experts for some advice.
According to The New York Times, a number of universities facing similar budget woes have hired private consulting firms to help identify potential areas for reductions. At the University of North Carolina, where an anonymous donor financed a study by the firm Bain and Company, private consultants made recommendations that may result in $150 million of savings. Cornell University and the University of California, Berkeley, have also recently joined the ranks of universities hiring consulting firms that typically work with private, profit-generating companies.
The use of such firms has led to complaints that colleges are being treated like profit-making entities. Critics argue that the goals of fostering an environment that encourages a vibrant exchange of ideas, building a sense of community and producing academically rigorous research may be compromised by the use of consulting firms. While this is a legitimate concern, it is important to remember that such firms only recommend changes they don't have the power to institute them. The responsibility for final budget decisions always rests with university officials. Additionally, colleges typically request that consulting firms target only the administrative and organizational elements of their institutions; academic issues do not generally come under consultants' purview.
With these caveats in mind, hiring a management consulting firm for expert guidance in these difficult times makes a lot of sense. Although colleges and private companies have very different missions, ultimately they both have budgets to balance and organizational structures to streamline. Consulting firms have traditionally worked with private companies because, among these organizations, the demand for simple, effective organizational structures and economical administrative practices is great. In contrast, universities have had a tendency to be complacent during periods of economic prosperity. Layers of administration are added and redundancies in the chain of command emerge. As long as a university is breaking even, it does not have the same incentive as a private business to keep a check on administrative growth. Being inside the university can also make it hard to recognize inefficiencies that have built up slowly.
In 2005, Dartmouth demonstrated that it was aware of such dangers when it hired McKinsey and Company to look at the College's administrative structure in the hope of maximizing its effectiveness. The report McKinsey turned in called for greater transparency, consolidation of some administrative offices and more accountability for performance by departments and individuals.
Back then, John Crane, the College's deputy librarian and liaison to McKinsey, acknowledged the benefits of hiring such a firm: "Quite naturally the College administration has grown and changed over time relative to particular needs and particular moments," Crane said. "By having a fresh eye from outside, we hope to learn things that we may not be seeing ourselves."
Today, a fresh perspective, especially one provided by a firm with experience in management and organization, could be just as helpful, if not more so. In academia, where "multidisciplinary" is the buzzword of the moment, we have seen the benefits of sharing ideas and techniques among related fields. The beauty of this interdisciplinary sharing is that you can borrow the lessons that are applicable and discard those that aren't. In this spirit, the field of higher education can learn something from the business and management fields without compromising its core values.
In other words, hiring a consulting firm will not turn Dartmouth into a soulless, profit-motivated corporation. Rather, it is an example of looking for novel solutions in unexpected places, the kind of outside-the-box thinking that crises such as the current recession call for.