Part One. Today we highlight some of the pitfalls encountered when leaders have embarked on an effort to integrate distributed units across the university.
Part Two. Next week we’ll share strategies on how to integrate units can help consolidation strategies at universities succeed.
Universities face threats that would have been hard to imagine six months ago.
Slashing the indirect reimbursement funding that allows the institution to house the research, provide the infrastructure, and keep the lights on will dramatically reduce operating dollars for most universities. Terminating current grants and threatening to cancel more on an almost weekly basis raises even more financial concerns for leaders. The pending increase taxing the endowments for some schools will bring about even greater financial pressure to conserve resources.
As university leaders explore different scenarios for how to respond and then navigate such drastic actions, developing a viable shared services strategy is viewed as one path for optimizing the overall spend.
Over the years, numerous initiatives have been designed to bring together distributed functions such as human resources, financial services, research administration, and information technology. These efforts face predictable challenges based on each institution’s historical, cultural, and political dynamics. The forces will often manifest themselves as headwinds that the sponsors will encounter.
In many places, universities evolved from their early founding to become a collection of colleges, schools, institutes, and centers with their own benefactors. They raised some, if not all, of their own funding. This has historically provided these units the autonomy to hire and build the support they decide is needed to successfully carry out their mission. Deans, directors, and even vice presidents with their own budget dollars will question or challenge the call to consolidate resources to benefit the greater good.
For those considering consolidation strategies at universities, if you have been involved or will be involved in planning or implementing such an initiative, here are classic pitfalls that others have encountered. That is, here is what not to do if you lead initiatives designed to optimize resources by bringing together people who have similar jobs or roles.
1. Don’t use the words: consolidate, centralize, reorganize, or restructure.
These titles and their related approaches immediately provoke reactions from the people impacted, leading many to resist this effort from the outset. Our brains are constantly on alert to scan the environment for threats, and you unintentionally signaled “code red.”
2. Don’t overlook the local expertise or relationships people have built.
Stakeholders in the distributed units have been accustomed to having responsive support nearby. They fear losing this timely assistance. Also, remember that the relationships formed over the years between the faculty and staff have sometimes created deep connections. This project threatens to disrupt this familiarity, and this will often create push-back.
3. Don’t have a few people determine how best to reorganize
Leadership may decide that aligning services and resources is a strategy they believe will help optimize the overall spend, which is their prerogative. The process will not go well or be embraced if only a few people design the plan and then communicate this via a directive. Taking a more unilateral approach will surely rile up a number of people who are on the receiving end.
4. Don’t start with a lack of clarity on the purpose or goal(s)
Determine the purpose or goal(s) associated with this undertaking so you can share this in ways that will help others understand and ideally support the initiative. It will be important at this stage to be clear about the impact on people and whether there will be reductions in staffing as this rolls out.
Some sponsors have been able to share at the outset that this will not result in layoffs. Other leaders have been able to share that whatever reductions will take place will be through attrition over time. In some cases there is a need to reduce the costs, and this will lead to staff reductions. Being transparent is critical to the credibility of those leading this change.
5. Just because people are nodding, don’t think you have their support.
As a Provost shared with the Dean’s Council that they would consolidate all the units across the university, everyone appeared to be nodding in support. Keep in mind that it is the perfunctory nod. You’ve seen it and sometimes repeat it to yourself, “yeah sure we’ve heard this before.” This mild expression of acknowledgement should not be mistaken for their support. These local leaders will hear from their staff and faculty about why this is a bad idea. The defenders of the current state will share how key people are going to leave or never be seen again as they get absorbed into the amorphous central organization, along with how unresponsive the new organization will be. The list of genuine and imagined concerns will go on and become a campaign to undermine these consolidation strategies at universities.
6. Money does matter in the end
Keep your eye on who has the resources, how the costs and potential benefits will rebound to whose benefit, and what the financial goal or structure will be. One early objective was to optimize the overall spend. How will this be accomplished? Will there be winners and losers?
Next week
Stay tuned, as next week we’ll offer ideas on how to enhance the likelihood that consolidation strategies at universities will lead to a more integrated and effective aggregated organization.
On initiatives like this you have witnessed, what do you think contributed most to the difficulties encountered?
- Using words like consolidate, centralize, reorganize, or restructure
- Overlooking the local expertise or relationships people have built
- Having too few people determine how best to reorganize
- Lack of clarity or compelling purpose or goal(s)
- People were nodding as if they supported, yet you didn’t have their support
- Money does matter in the end, and the funding was an issue
Last week, we asked about your biggest need when you think about what you can stop and start as an organization at this time.
- 35% said the ability to focus on the most strategic and value-add.
- 24% said a better process for stopping things.
- 22% said the ability to say “no” to new incoming work.
- 20% said prioritization of existing work.
These four choices are largely different ways of approaching the same concern: focusing on the most strategic and value-add. If you feel you or your organization could be doing this better, pick the place to start where there would be the most significant impact: limiting incoming work, prioritizing existing work, or stopping initiatives of limited value.