Let me begin with the most obvious and practical point, the need to allocate and use resources responsibly and carefully. It cannot be "business as usual."
First, as emphasized in a recent statement by the Board of Trustees, it is vital that we take a long-range and fiscally responsible approach to budget building. We have had an unbalanced budget for many years, a budget built with unrealistic expectations for increases in revenues, shored up by exceptionally high returns on investments. We must build clear, realistic long-term budgets that align with our strategic goals.
Second, we must make more judicious choices about major operations and capital investments. We have not always analyzed and prioritized major expenditures fully, evaluated their true impact, examined alternatives, and identified a secure revenue stream. Even in these difficult financial times, we must continue to make major long-term investments (from scholarships to capital projects) that are critical to our future, but we must choose these investments with great care, with a full understanding of their costs and impacts.
Third, we must contain costs. Virtually all of higher education has experienced "mission creep." We offer more options and provide more services than ever before. The possibilities are endless, and virtually all of them are good things to do. But with a future of constrained revenue, it will be necessary to stop doing some things in order to do other things at the high quality we demand. As we know from experience, it is hard to stop doing things, but in order to invest in new initiatives, or to improve the quality of our core activities, we must do so.
We must also relentlessly focus on improving efficiency and productivity. One area of cost-cutting of special interest to us all is the push for energy conservation. Success in this area has the dual effect of improving our bottom line and reducing our carbon footprint, two critical goals for us. By changing the thermostat settings we estimate annual savings of $250,000 and an annual reduction in carbon emissions of 1,620 tons. Our individual behaviors can and must add greatly to those savings. Let me give an example and a challenge. Each year, we have an energy contest in October, and each year our residence halls rack up substantial savings—for the month! In 2006, with a very aggressive campaign, students reduced energy consumption by almost one-half million kilowatt hours, saving over $40,000 in one month. Unfortunately, that level of reduced consumption dropped sharply after the contest, and the level of savings in subsequent years has been only a small fraction of the 2006 success. Individual behavior matters!
Earlier, I described some of the organizational changes in IT at Miami. Other IT initiatives used technology to make very substantial positive impacts on cost and productivity. The server virtualization project, which employed new technology to manage shared physical servers, allowed us to avoid huge costs associated with a new data center while greatly reducing energy consumption.
Another example of the effect of improved productivity comes from Human Resources and Payroll where the new People Admin System, greater use of electronic forms, and the reorganization of work have reduced costs by $300,000! In order to increase further our ability to "think outside the box" and adapt new technologies and business strategies that will lower costs and improve service, we will be engaging an outside consulting firm to examine our operations and identify further options. Such an approach has proven to be very effective at a number of other universities, including the University of North Carolina.
Dealing with productivity in the academic world has proven to be much more challenging. After all, we have a long-held expectation that the smaller the class and the greater the contact with the professor, the better the educational experience. Increasing productivity would seem to require moving in the reverse direction. However, there are alternatives from organizations like the National Center for Academic Transformation, that may improve learning outcomes and improve productivity, hopefully allowing for more of the personal interactions between students and faculty that matter most. Our regional campuses are having great success with hybrid courses that are not only more convenient to the students, but that decrease costs while maintaining or improving the quality of outcomes.
Few issues are as critical to the learning experience as how we use faculty time. Several years ago, we introduced the idea of variable workloads to better accommodate the scholarship of our teacher-scholar faculty and to more fully account for all of the contributions faculty make to our immersive learning environment. Unfortunately, one of the unintended consequences that resulted from unclear guidelines was a significant drop in the proportion of student credit hours taught by tenured and tenure-track faculty. We have subsequently adopted and implemented faculty workload guidelines that provide for more clarity and consistency. As a result, the proportion is improving, and is once again noteworthy by national standards.
The allocation of faculty time is central to our core identity, and we need to constantly work to find the right balance of activities. This is not about working harder, Miami faculty work incredibly hard. Rather, it is about allocating our most valuable asset—faculty time—with great awareness and intention. For example, teaching one course more or less every two years is roughly the equivalent of adding or subtracting 80 faculty positions. That's a lot, and together we need to manage this resource carefully.
It is also critical that we continually sharpen our thinking about the criteria for promotion and tenure as well as other faculty incentives. Clearly, we value teaching, scholarship, and service, but do we have them in the right balance, and do we measure them effectively? We are a distinctive university, yet our expectations appear to be quite standard. If our core goal is to make the Miami undergraduate experience among the best in the country, do we adequately reward those, regardless of faculty rank, who "move the dial" in terms of pedagogical, programmatic, or developmental innovation? As a university that values education so highly, can we do better in recognizing outstanding contributions to the advancement of teaching and learning?
The pace of production of new knowledge is accelerating and new and exciting fields of study are emerging that challenge our centuries-old departmental structures. In times of relative affluence, Miami has responded to the development of new areas of study like most universities, by adding new programs or departments and associated support staff. As new and exciting programs that draw student interest and enrollments are developed, resources must be made available to ensure their success. But, in times of financial constraint, we must operate differently than we have in the past. Much of the cost of supporting new programs will have to come from savings that result from consolidating, reorganizing, or eliminating existing programs. We must continue to innovate, but we cannot assume that support for innovation can come from new funds.
The review of graduate programs last fall was an extraordinary effort to assess all programs simultaneously, primarily in order to reallocate resources across those programs. Very few universities have even attempted, let alone completed, such a daunting, yet vital task. It was not easy, but it was necessary. As we strive for an appropriate balance between graduate and undergraduate programs, it will be necessary to continue this critical evaluation, focusing on program quality, the ability to leverage university resources, and the ability to generate revenue to support programs, either through grants or tuition.
Recognizing the changing landscape of higher education, especially the shortened time to degree being brought on by students earning AP college credit before matriculating, Professors Rich Taylor and John Bailer have recently encouraged possible paths to create more attractive options for potential students by linking our core strength to the new reality of students entering college with many credits already accrued. One path is to highlight our rich academic environment by actively encouraging double majors and dual degrees. We are already leaders in the proportion of students with double majors, so let's make that a signature part of our identity. We should emphasize that when students enter with a large number of college credits, they can accomplish even more at Miami, rather than emphasizing leaving early. At the same time, we might expand our programs that offer a streamlined bachelors-to-masters program. This would provide another academically richer outcome for students while also providing a more financially sound basis for some graduate programs since students would pay for their masters program. The Provost is appointing an ad hoc committee to explore these possibilities and the institutional accommodations that are necessary for success.
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