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Rightsizing a System

July/August 2015

By C. Ray Hayes

When Hank Huckaby became chancellor of the University System of Georgia in July 2011, widespread criticism of higher education’s costs echoed around the country. With the backing of state leaders, the system took up the challenge of implementing major changes, with institution consolidation being the centerpiece.


Henry “Hank” M. Huckaby knows Georgia well. A native son of the state, Huckaby formerly served in the Governor’s Office of Planning and Budget, represented Georgia’s House District 113, and has taught and served in the administration at public and private colleges and universities across the state. His latest challenge: helping fashion the University System of Georgia for a new day. 

As system chancellor, Huckaby says he took the job to be a change agent for higher education in Georgia, knowing that many things would, in fact, have to change. “The one question I asked our state’s governor before I came on board was whether he was willing to support major transformation,” says Huckaby. “He said yes, and since that time he has backed us 100 percent.” In this interview with Business Officer, Huckaby details the tough decisions and actions taken by system leadership and institution faculty and staff to forge ahead with necessary cuts and campus consolidations, while also pursuing an ambitious agenda to put degree completion within reach for thousands more Georgians. 

The University System of Georgia has been in the limelight in connection with its consolidation efforts. What prompted leadership to move in this direction? 

The recession that began in 2007 was a wake-up call for all of us in public higher education around the country, because we all suffered tremendous budget cuts. At the same time, in Georgia, as in many other places, we began experiencing significant enrollment growth. One response to this increased enrollment pressure amid dramatic budget cuts was to increase tuition and fees. Yet, everyone knows that you can’t sustain that formula for long. We simply had to find a different way of doing business. 

At the time I became chancellor in July 2011, there was also general criticism throughout the country about the cost of higher education. It was within this context that the system assumed the challenge of implementing major changes, and consolidation became one of the many efforts we’ve focused on since then. 

How did you approach this challenge? Where did you start?

I learned a long time ago through my career in state government that if you’re going to change an organization—particularly its culture and vision—and you want to effect change relatively quickly, you usually have to change the people in charge. It can take a long time to change the mindset and vision of those who have been in place for some time. So, I brought with me a new budget director and a new senior vice chancellor for administration, and I was able to coax a longtime friend out of retirement to be our interim chief academic officer. Staffing concerns aside, out of the gate we began talking about our new normal. In my first meeting with the board, we agreed on the need to focus on three priorities in particular. 

What were those priorities?

One was enhancing performance. We had to do a better job with the resources we had and to manage our institutions more efficiently. We also had to be more effective in the classroom and to graduate more students. 

A second concern was strengthening partnerships. This was a key issue here in Georgia, because the relationship between the technical college system and the university system left a lot to be desired. We were anything but partners. And so we took that on and have made major strides in this area that have changed the calculus of that relationship. 

Our third priority was reinforcing the value of higher education. We had to change the thinking of many in our state who were questioning the relevance of higher education. In addition to talking about the economic imperative of a trained and educated workforce, we also had to frame the value of higher education in terms of quality of life for individuals and for our state.

How did consolidation become a core strategy of your change agenda? 

During my first five months, I visited all 35 university system campuses. One conclusion I quickly reached was that good things were occurring at each campus. And yet, the reality was that in our service model going forward we no longer needed that many brick-and-mortar institutions. Because Georgia’s technical college system underwent significant consolidation several years prior, the idea of consolidation was one that was already tested and found to be beneficial for the state. That said, because there was no university system consolidation model for us to follow, we realized that significant challenges were ahead.

In raising consolidation as part of our solution, we stated upfront that the purpose was not to reduce the bottom line. The purpose was to be more efficient, reduce administration, and direct those savings into the academic enterprise. I think everyone at the table working out the details of each consolidation was aware from the start that some employees ultimately would not keep their jobs. Yet, for the most part everything has worked fairly smoothly, and we are proud of our folks for the tough decisions they’ve made and for the many hours they’ve put in to making the mergers work, even as they had to continue conducting the daily business of their institutions. 

Your board was quite supportive in signing off on the mergers. What kind of resistance did you face among campus leadership and elsewhere? 

Once we made our recommendations and got board approval, we moved quickly to begin consolidating four of our institutions into two. Something that really helped us in this process was the support of our governor. As it turned out, one of the initial institutions that we proposed consolidating—Gainesville State College—was in his hometown. Our plan was to merge this two-year community college with North Georgia State College and University, which had a long and very proud history as an outstanding military college, recognized throughout the country in military veteran circles. 

When we first approached the governor with our plan, he took the high road. He said that if he couldn’t support the effort in his hometown, how could he expect others to support system consolidation? That was a tremendous breakthrough, and it served as an example that we could highlight for others who were opposed to the consolidation proposed for their respective communities. 

And did you face pushback?

We did. In fact, for this particular merger, there was naturally a good bit of angst on the part of former alumni of North Georgia State College and University who were commissioned into military service and then went on to serve long and successful military careers. That constituency presented the biggest concerted effort to impact our consolidation decisions. While there were bumps along the way, we stayed the course. Over time, as I have visited the University of North Georgia campus [the resulting merger of Gainesville State College and North Georgia State College and University], my assessment is that things are really coming together. The participation rate among the cadet corps alumni is going up, and this past academic year the university had the largest cadet corps in the history of the institution. 

What have been some of the trickier issues that you’ve had to navigate with your consolidation efforts? 

We were fortunate early on that at three of the four institutions we proposed for consolidation, the presidents were retiring, and so that took an important issue off the table in terms of having a president lose his or her job. Our governance structure has also made this process easier. The University System of Georgia has one board, and because of our legal standing—with the system set up by our constitution—we are not treated like a typical state agency. When the legislature appropriates funding to the system, in effect it works like a block grant for which the system’s board and staff determine the appropriate allocations to the respective schools.

None of this is to suggest that this process has been seamless or that it gets any easier as you go along, although we have learned from some of our early mistakes. We’re now in the middle of the most complex consolidation we’ve attempted, merging Georgia State University, Atlanta, which has about 32,000 students, with Georgia Perimeter College, Decatur, with about 20,000 students. 

Do I understand correctly that for each of these mergers, you’ve formed a working group from the different campuses to address the issues? How did those function?

Yes, in each instance we’ve established a consolidation committee made up of an equal number of members from the two schools being merged—about 20 members per institution. While one of our system vice chancellors has managed the overall process, our goal from the start has been to allow the individual institutions to drive the decision making, rather than micromanaging this at the system level. And it is fair to say that the success of these mergers is in large part the result of these working groups. 

Because the institutions, through this committee process, have had to address the day-to-day, nitty-gritty issues of the consolidation and how things would be implemented, they began to forge relationships that provided the basis for building a new culture and identity. Our hope has been that this process would help move faculty and staff from these separate campuses toward a common goal of having an even better and more effective merged institution. That’s where it begins, but it doesn’t end there. We knew going into this that to pronounce a consolidation totally complete would be at least a three- or four-year process, since residual issues take time to work out.

Logistically, what has this entailed for the working groups?

In the four years that we’ve been moving through this consolidation process, we have identified about 800 or more discrete decisions that must be made, and so this has provided some really good practice for our consolidation committees to learn to work together. As for time frame, from the day that we announced each consolidation, it’s been about an 18-month process to work through the actual merger. A lot of the timing is determined by our accreditor, the Southern Association of Colleges and Schools. Because the accrediting agency meets only twice per year, we’ve had to be sure we were aligned with its process. According to the consolidation committees, the biggest challenges have not been addressing admissions or overcoming things like the names of athletic teams or mascots, but rather, working with the U.S. Department of Education with regard to financial aid management. 

You mentioned lessons learned. Is there a particular example of something you might do differently? 

This may sound simplistic, but one thing we would likely do over is to announce at the outset the name of the merged institution. We found—not totally surprising, perhaps—that struggling over the name drained a lot of energy and focus from the consolidation committees. So, for the past two consolidations we announced the name upfront. Since the board ultimately has to make a final decision on this, why not go ahead and do it at the outset? I’m afraid this doesn’t provide you with any great philosophical insight about the consolidation process, but what it does suggest is that often the details are [at the level] where you really have to pay attention.

From a more overarching standpoint, I would say that communication—keeping people informed and involved—plays a tremendous role in the success of your efforts. Misimpressions and misinformation can get out of control very quickly. So we now work very hard with our campuses to ensure that the process is open and transparent, and we are continually communicating to all constituents within the institution and externally about how things are progressing. 

At the same time that you’ve been merging institutions you were streamlining administrative services and expanding educational offerings. How did you juggle all these efforts?

That’s right. Our new normal wasn’t about consolidation only, though that component has probably received the most attention. With regard to administrative services, a few years before I arrived, a shared services operation was launched primarily in the human resources area. While the concept was good, it was not working well, and in my first three weeks on the job, I got more complaints from the university system presidents about this than anything else. So, we identified the problems and vowed to do a better job. We are still restructuring our shared services model, but we think this effort will yield great dividends for the system in the future. In fact, we are looking to expand this approach into other functional areas where it seems appropriate for the system.

On the financial side, we did several things right out of the box. In the area of space utilization, we tapped an outside consultant to work with all our institutions to assess how effectively and efficiently they were using existing physical facilities on their respective campuses. We found that the range of space use was anywhere between 25 percent and 75 percent. While 75 percent is about as good as you might expect, 25 percent is unacceptable. We made it clear to our campus presidents at the outset of this review that the results of the study were going to impact budget decisions, and in particular, allocation of resources to build and renovate facilities. This has had the effect we intended, with many campuses altering their priority lists for new facilities. 

We have also taken a fresh look at our academic enterprise and have instituted some new policies under what we call “integrated review.” For example, if an institution proposes establishing a new degree program, the plan now has to be approved comprehensively by the system office. Prior to this policy, the only units reviewing those requests were those in the academic affairs side of the house. The budget and facilities functions didn’t review or weigh in on those proposals and their associated impacts. Now they do. We’ve also put in place a formal process of looking at low-performing degree programs at each of our institutions. In the process we have eliminated a number of programs, some of which were essentially dormant. 

In line with your academic restructuring, you also began your Complete College Georgia initiative. How does this fit into your overall system transformation plans?

Under the governor’s leadership, and through our system office, it made sense for our state to become a participant member of the Complete College America alliance, focused on increasing degree and credential completion. Even though we weren’t among the first states to join the alliance, we were the first state for which all the institutions in both the technical college system and the university system completed their campus plans. 

We are very committed to advancing the percentage of students in Georgia who finish some credential, either from us or from our technical college system. Currently we are at 42 percent and we want to move that to 60 percent by 2025. This goal has led to different ways of doing business on our respective campuses and different ways of supporting students to make sure they graduate. Our Complete College Georgia plan is a guiding factor for a lot of what we are doing on our campuses to restructure educational delivery, and we allocate resources and conduct annual budget reviews with each institution within the context of that plan.

Other states and systems are no doubt looking at what Georgia has done—whether with your consolidation efforts or shared services or academic restructuring—and considering how something similar might take place for them. What do you think the future holds for public higher education in particular in the next 10 years?

That’s a tough question. The truth is, no one really knows. We know that technology will play a big part in any change. We certainly understand this in Georgia and have made some dramatic shifts toward online programming. In the past three years we’ve gone from offering about 1,500 online courses to more than 5,000. At the same time, we have to step back and assess whether there is a more efficient and effective way to deliver education going forward. 

I’m of the opinion that online education is an important approach, but it is not a silver bullet. In the next 10 or 15 years, I think a lot of what we’re going to see in the use of technology will be focused on hybrid courses with some face-to-face time with professors, combined with online components. In general I think we as educators have to be increasingly nimble. I’ve been telling leadership within our system that the new normal is a dynamic concept, not a static one. We all must be in a continuous mode of evaluating, reevaluating, and reassessing what we do and how we allocate resources. 

How would you want all these transformation efforts to be described in the history books for the University System of Georgia?  

I would like it to be said that our leadership realized in 2011 that it was a new day and that we began immediately to respond to that realization—that we did not shy away from making difficult decisions. I think if you’re serious about carving a new model of public higher education, you must be willing to do some hard things and address some tough questions. And you have to understand from the start that not everyone will love what you are doing or stand up and salute your decisions. As with any major challenge, you simply have to commit to working through all the issues that emerge. As a leader, that may mean you have to answer not very pleasant e-mails and meet with folks who are upset or anxious, to give them an opportunity to voice their opinions. 

We tell our presidents and other campus leadership continuously that we’re not about buildings, or the budget, or athletics. We’re about the students, and that ultimately is the prism through which we must filter everything.

C. RAY HAYES is executive vice chancellor for finance and operations for the University of Alabama System.


SECTION IV: PROGRESSIVE PLANNING

Perpetual Process Review

Only-What-You-Need Outsourcing


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Leadership

In raising consolidation as part of our solution, we stated upfront that the purpose was not to reduce the bottom line. The purpose was to be more efficient, reduce administration, and direct those savings into the academic enterprise.