Walking the Talk
Edward J. Ray, President
Oregon State University
October 11, 2007
I thank the Faculty Senate for inviting me to speak to you this afternoon regarding the state of the university and our agenda for the coming year.
Each year I ask my direct reports to tell me what their three or four highest priorities are for the coming year. We further define their priorities and then review the extent to which they have been successful at the end of the year. In that same spirit, each autumn for the last four years I have addressed the university community to review the current state of affairs and to suggest several areas of focus for the coming year.
Collectively these speeches reveal that we have addressed our annual priorities and realized substantial success. True, some of our action agenda items took longer to achieve than I had hoped. I also realize, looking back, that my speeches were probably too long.
Therefore, the title of my talk today is "Walking the Talk", which suggests a shorter speech and a call to action.
Before looking ahead, let me note some major accomplishments of the last year:
- Together we provided the Board of Higher Education, the Governor and the Legislature with compelling arguments for increased state funding for higher education in Oregon.
- We crafted a new set of guidelines for the tenure and promotion process.
- We worked with alumni and friends to make the case for investing their own resources in this great university, and redirected $10 million in continuing funding to support key academic programs and offer more competitive compensation for faculty and staff.
- And our faculty generated $206 million in research grant and contract awards.
Realizing these achievements required the leadership of this great body and colleagues throughout the university. In looking ahead, it is encouraging to know that we have a team that gets things done.
In my first university address in 2003, I indicated that there were four broad areas that we needed to address if we intended to realize our aspirations for this wonderful institution and community. They were:
- Complete the university strategic plan;
- Lay the foundation for our first university-wide fundraising campaign;
- Manage our resources wisely, and;
- Achieve excellence through diversity.
We adopted the strategic plan in February 2004 and set a number of goals to be achieved by 2008. The provost will report later this month on our progress to date in implementing the plan. Next year we must assess our total progress, and chart new targets for the following five years.
Our success in establishing a solid foundation for the university-wide fundraising campaign is particularly notable. We launch the public phase of the campaign on October 26th – I hope you are all planning to attend the celebration – and we will be able to announce a total well in excess of our $300 million dollar target for the quiet phase of the campaign. Let me note in passing that 80% of the support generated during the fundraising campaign will benefit academic programs and 20% will benefit intercollegiate athletic activities.
We have also managed our resources extremely well over the last four years. In keeping with the strategic plan, we implemented faculty salary increases to achieve modest gains in compensation relative to our aspirational peers. This was done, despite insufficient funding from the legislature last biennium, by making difficult choices to trim some activities and redirect $10 million in continuing funds within the university. Again reflecting the strategic plan, we cut more heavily from business and academic support services than from academic programs. I am very proud of the collaborative efforts of administrators and colleagues that made those changes possible.
For the first time since my arrival here, the financial support from the Governor, the Legislature, and the Board of Higher Education during the last legislative session will permit us to implement competitive salary increases this biennium. We can also target modest increases in activities that support the strategic plan during the second year of the biennium. Nevertheless, it will take accelerated improvements in our state funding position over a number of biennia to meet the needs of Oregonians for quality higher education. Similarly, it will require continued growth in our other sources of revenue and effective management of our operating costs to realize our goals for this wonderful university.
As I said in my first university address we cannot simply put the burden of advancing this university on the backs of our students and their families through tuition and resource fee increases. Instead we had to do several things simultaneously:
- Increase our effectiveness in competing for research grants and contracts;
- Expand our business and government and inter-institutional partnerships to grow our technology transfer and licensing revenues;
- Rally our friends and alumni to provide funding for scholarships, fellowships, chaired faculty positions, academic program support, equipment and facilities that are pivotal to realizing our ambitions for learning, scholarship and engagement and;
- Manage our resources as intelligently and efficiently as possible.
Tuition and resource fee increases must be our last resort in garnering the funding needed to implement the strategic plan.
As I have said repeatedly, we have done these things well. To achieve our strategic plan aspirations, we must continue to establish priorities, leverage existing resources, and make strategic investments in targeted areas. This leads me to my recommendations for the coming year.
Setting Investment Priorities
Our first challenge this year is to work together to develop a detailed set of prioritized and significant investments consistent with advancing academic program excellence, enhancing the quality of the student experience, and strengthening our financial position, the primary goals in the university strategic plan. Our focus must be on academic program excellence and the impact of our programs in the five thematic areas. Accordingly, the provost will work with colleagues to direct a process to identify a prioritized list of activities for the university that we will consider for investment.
We will not compromise the spirit of shared governance for the sake of expediency. It is critical that the Faculty Senate and our student government leaders fully participate in the deliberations regarding priority areas for investment. The existing university strategic plan, the strategic plans of the colleges and support units, and the prioritization process conducted a year ago should represent an excellent starting point for this discussion. I am certain we will move quickly this year to develop an agenda for priority investments in the university.
We will then face the issue of funding these investments.
Surely some investment priorities will match our case statements to donors and resonate with their philanthropic wishes. Other priorities will benefit from research grants and contracts, and technology transfer and licensing revenues. And our modest gains in real state funding may help to fund additional priority investments.
Inevitably there will be important investments that simply cannot secure timely funding from these sources. We will face a hard decision. Will the lack of funding cause us to forego priority investments that we believe are essential to the future of this university, or will we act to redirect current funding back to important academic programs and academic support service initiatives?
I believe we must redirect funding to our critical investments. Even if our list of priority investment targets is short – as it should be –the individual investments necessarily must be significant if they are to make a difference in our academic performance and delivery of academic support services. Unfortunately, the recent increase in state funding will not sustain significant investments. This biennium, state funding for OUS increased almost 19% from $733 million to $870 million. The state’s own resource allocation model shows that funding student credit hours in OUS at the average rate of our peer institutions would require an increase in state funding of almost 38% to $1.2 billion. We simply do not have sufficient resources at hand to make continuing significant investments in key areas.
I know that over the last 15 years this community has suffered great harm as the result of the decline in state funding and the unrelenting rise in costs we do not control. I was asked recently how we could provide a quality education when our financial support, including tuition and resource fees, is well below many other public universities. I said one reason for our success is that all of you have shown great inventiveness in creating and nurturing extraordinary programs. Many here made significant financial, health, and other personal sacrifices because of their passion for learning, scholarship and engagement at OSU.
I think you are heroes. I thank you, and I have great affection for you and what you stand for as reflected by your good works and sacrifices. Ours is a spiritual as well as an intellectual calling and there are genuine heroes among us.
I also said that there exists a spirit of inventiveness, a can do attitude, and a deep regard for collaboration here at Oregon State University. The presence of those qualities at OSU far surpasses any university with which I am familiar. There are countless academic programs, research initiatives and outreach and service activities associated with OSU that exist only because faculty reached across college, department, and division boundaries to work with kindred spirits.
When I first came here from a much larger university I raised questions – and probably a little concern among some faculty – about whether or not we had the critical mass of talent we needed to maintain this program or that program. If one thinks only along traditional disciplinary lines, there are academic and research efforts we pursue here that simply are not sustainable. Yet there they are and there they stay because of the astonishing collaboration among colleagues who work to get things done.
Reviewing Our Business Practices
Our second challenge, therefore, is finding the resources to fund the priority investments we identify and to sustain the spirit of inventiveness and collaboration that is so crucial to OSU. We must continue making meaningful progress in achieving the goals of the strategic plan.
To meet this second challenge I firmly believe we must re-examine how we manage the business activities of the university, with a goal of identifying perhaps $5-10 million in continuing funding that can be brought to bear on those priority academic investments for which other sources of near-term revenue, described earlier, are unavailable.
This approach will also create an opportunity to strengthen the university’s culture of service by ensuring that our academic support activities and business practices are successful and responsive as well as cost effective.
Given the hardships we have endured over the last 15 years, I understand the skepticism that will meet a call to redirect an additional $5-10 million from business expenses to academic programs and services. Nonetheless, I believe there is a real opportunity to achieve these savings, because I have seen the world-class programs you have created by ignoring traditional academic boundaries. The depth of passion for academic pursuits and creativity, and the determination to get things done, is extraordinary here. I believe we can profitably apply these same qualities to our business enterprises.
First and foremost we are an educational community. As such, we have appropriately applied our imagination and talents to academic matters. But there are business aspects to everything we do. With much of our business activity distributed among colleges, departments, and divisions, we need to evaluate providing business services to academic programs and academic support services by centralizing business services or creating regional service centers that support multiple units.
I would not claim to know what is ultimately possible through re-organization and re-engineering, but I challenge us to bring the same intelligence we apply to our academic pursuits to the analysis of our business activities. I do know there will be no savings unless we are willing to ignore traditional business unit boundaries, and unless we clearly understand that the savings we generate – whether $5 million or $10 million – will permit us to make essential investments on the academic side.
The outcome is worth the effort.
Provost Randhawa and Vice President McCambridge, in consultation with others, will define a process to systematically explore re-engineering our business practices to redirect resources to academic programs and academic support services. Our faculty, staff, and students must participate fully in the deliberations regarding business re-engineering in the university.
I would hope these two processes, academic prioritization and re-engineering planning, could begin this quarter. If possible, investment priorities should be identified over the next six months in order to be considered for next year’s budget. Similarly, I expect us to implement a pilot project for re-engineering business activities before the end of this academic year.
Provost Randhawa will speak to the Faculty Senate next month and provide details regarding the process and timeline for investment decisions and the related assessment of our business activities.
There are three points I want to make strongly at the outset.
- First, the process of identifying a prioritized list of new strategic plan investments should be completed in the next six months or so.
- Second, the effort to re-engineer our business practices should result in a pilot project this year, and the university-wide effort should be completed within three years.
Third, and this is very important, our goal is to redirect resources to support the strategic plan, not to reduce our operating budget. We are not adjusting how much we spend; we are adjusting where we spend it. Our personnel costs average approximately 80% of our operating costs. Consequently, our available options entail moving some business activities and personnel to central and/or regional centers from departments and colleges to increase efficiency, and moving some personnel positions from business activities to academic positions and academic support positions to augment the educational mission. Training opportunities for staff must be part of the process. Some positions will be eliminated and some staff-people will not find a good match in newly created positions, but with annual turnover of 300 or more in faculty and staff positions across the university due to retirements and job changes, phasing in new business practices over three years should help us to minimize the impact on current employees.
Assessing the Baccalaureate Core
Before concluding, let me offer a final observation related to the investment in academic priorities and the strategic plan. The strategic plan outlines five thematic areas in which we will concentrate our teaching, research and service efforts over the coming decades in order to become one of the top ten land-grant universities in America.
The first thematic area listed is the Arts and Sciences. We aspire to be a great university. There are no great universities that are not strong in the arts and sciences. Through the rebasing process we have begun systematically investing in both the College of Science and the College of Liberal Arts, and arts and sciences remain critical to the implementation of the strategic plan and the realization of our aspirations.
This is the last issue I want to address today. I have been involved in a number of discussions regarding the structure of the state university system and the role of each university within that system. I have held firmly to the position there must be a solid arts and sciences core for every university graduate in Oregon, regardless of which university he or she attends. This has led me to examine my own sense of what should constitute this core, and how it reflects and differs from the core curriculum I took as a college student.
While I enjoyed my baccalaureate core, I am certain it would serve graduates poorly today. I do not have a complete sense of how satisfied you and other colleagues are with the current university baccalaureate core, but most discussions I have heard here and elsewhere tend to be about credit hours rather than content.
As I think about how the arts and sciences core might look today compared to when I was a student, I have come to a number of conclusions:
- First the core curriculum should contain more studies of the life sciences and earth system sciences.
- Second, the core should offer a wealth of courses that prepare all of our graduates to be culturally competent.
These beliefs reflect my conviction that our graduates must be able to work in multicultural environments, and to compete and serve in a world that is globally competitive – and also a very small and delicate planet.
Finally, a contemporary core curriculum needs to be much more focused than mine was on the international aspects of the arts and sciences.
The written, analytical and other skill objectives of the current baccalaureate core seem excellent to me, although one colleague suggested students need to be better prepared to accumulate, authenticate, assimilate and protect information. My concern is with the scope of studies experienced by our graduates, for these have a temporal dimension that merits periodic review. I therefore ask the Senate to lead a broad-based discussion across the university regarding the content of the baccalaureate core, and the explicit learning outcomes that students should achieve. And, we must be able to document outcomes. I am certain that the Senate will make any changes it deems appropriate.
While we must remain focused on strategic planning and financial resource management, I hope we will also reflect on that part of the curriculum, the baccalaureate core, that defines the soul of every one of our graduates. We must make certain that the core remains vibrant and contemporary and fully prepares our graduates to be our most important contribution to the future – and an extraordinary contribution at that.
I am impressed by the improvements that have been made in so many areas of the university in the last few years and feel privileged to work with all of you as colleagues. There is no doubt in my mind that we can address the challenges I have outlined here and that we will be successful.
Thank you for this opportunity to speak to you today. I look forward to the interesting and important work we will do together this year. I remain more certain than ever that the best is yet to come for this amazing place.