Year-End Ideas for Spending Wisely, Safeguarding Revenue, and Assessing Talent
Those either seeking or providing higher education are searching for both savings and good returns on their investments, across the country and around the world. Colleges and universities are rapidly adjusting to the new realities of a challenging economy. Current financial conditions have made it imperative for institutions to examine how they are defining and measuring success. Doing so inevitably focuses leaders’ attention on spending wisely and protecting enrollment revenue.
As a traumatic 2008 concludes and administrators look with renewed energy to the coming year, it is the right moment to consider ways to assess and improve resource allocation. Indeed, for the determined, informed, and visionary, this environment creates meaningful opportunities for investments of time and money in new or revised processes, operations, and strategies that may not have been possible in better circumstances.
Difficult times certainly create great urgency to optimize revenues and control expenses. Interestingly, an uncertain economy also creates openings for significant improvement in how leaders assess, manage, reward, and promote an institution’s most valuable and expensive asset – its employees.
Here are some strategies for succeeding and leading – through investment, recruitment, and assessment – when money is on everyone’s minds:
- Investment: Be pound wise and penny foolish. Cutting budgets alone cannot compensate for the sharp changes in today’s market conditions. Yes, in this environment, there are many appropriate and understandable reasons to reduce spending, especially when it comes to utilizing scarce resources for tasks that provide little value but have become part of an annual budgeting habit. If nothing else, tough times mean questioning everything and cutting inefficient and ineffective expenses that should have been reduced or eliminated long ago.
Of course, resistance to unnecessary or careless spending is always warranted, in good times and bad. Yet, there is rarely comparable scrutiny to prevent cutting spending on valuable, strategic initiatives or in areas whose value may not be fully appreciated or assessed. In evaluating proposed investments or cost reductions, use deliberate diagnostics and cost-benefit analyses to assess those expenses. Let the evidence be your guide.
If you are not yet using research, market feedback, dashboards, and other metrics to evaluate performance in this manner, then adopting these approaches ought to be a high priority investment. Without valid evidence, determining where to increase or decrease budgets is fraught with unnecessary risk and guesswork. Additionally, evidence must be evaluated within the context of a shared understanding of your institution’s highest strategic objectives. As a rule, one should be reluctant to slash expenses on strategic priorities. That choice too often results in inadvertently reducing revenue, impairing image, damaging morale, and losing talented employees.
One useful approach to budget analysis is to ask whether and how each potential cut or new spending proposal affects your institution’s current and future ability to attract, serve, and retain students. Put any reductions that compromise these essential requirements to the bottom of the list and any investments that offer a verifiable promise to advance student recruitment and retention to the top of the investment list.
- Recruitment: Apply real intelligence to marketing programs. Surely, student recruitment ought to be one of the last functions subject to unthinking, revenue-sacrificing budget reductions. However, it should still be subject to a healthy scrutiny. For example, outreach that is not informed by underlying research can really miss the mark. Now more than ever, it is critical to understand your specific market segments – how they react to your pricing and value messages, which media and materials are successful in cultivating their interest, and which are not. Broad-based, blanket approaches to recruitment are an overpriced luxury these days, absorbing too much money without commensurate results.
Here are some areas in which better market intelligence can help you boost the return on your marketing investments:
- Assessment: Take a closer look at skills and performance – including your own. Some of the same principles and skills regarding evidence-based decisions that we advocate for student recruitment spending practices can be applied to other organizational dimensions. Professional development, talent assessment, and reward and recognition programs are sometimes casualties during economic downturns. However, with respect to talent evaluation and development, it is important to understand that the best performers are often identified in the most demanding and trying circumstances.
Who among your team is distinguishing him or herself right now with calm, thoughtful, strategic, and unselfish behavior? What evidence do you have to validate their success? And what evidence can you use to demonstrate that the institution values their commitment and effectiveness? Many fine people will seize this opportunity to rise to the occasion. Now, more than ever, exemplary performance needs to be noticed and rewarded.
It is relatively easy to perform acceptably in prosperity. Challenging conditions, however, can reveal the internal sources of future leadership as your institution envisions and approaches better days ahead. While it may be right to declare a temporary salary or hiring freeze in some situations, it is never right to abandon strategic talent management. There may be people on your team who are performing so far above and beyond the call of duty right now that they deserve special recognition in whatever form it can be provided, as a bonus or other alternative. Failure to understand this imperative may result in the costly departure of an institution’s best employees. Difficult times always require creative measures. Ask yourself what you can do in the closing weeks of this year to thank your team in a meaningful way. Then, acknowledge your very best performers either in public or private. Finally, ask yourself and a trusted colleague or two to assess your performance under trying circumstances and how you might improve your own leadership.
A New Year’s Resolution
It is not easy to develop a culture that reinforces the importance of making financial and talent decisions based on evidence and measured evaluation. It requires an unrelenting commitment to developing and investing in systems that generate the evidence needed to consider institutional and individual performance. An institution cannot have an authentic culture of evidence without the systems to produce that evidence. Developing and maintaining this capacity requires consistent communication and open dialogue about institutional performance and priorities.
At the brink of an historic year ahead, now is the time for uncovering new knowledge, developing new habits, and supporting stated priorities with action, attention, and resources. When security and certainty are elusive, both institutions and individuals are better served when they can report – whether to deans, vice presidents, presidents, or trustees – that they have the evidence to support their financial and human resource decisions. Conversations that identify the most important questions and determine whether or not those questions can be answered with the current inventory of information are the way to begin. If any cannot, make a New Year’s resolution to seek out that information and build the systems and practices to provide needed data in the future.
Whatever the numerous, complex conversations you believe may have been put off for too long at your institution, our holiday wish for you and your colleagues is that 2009 will be the long-awaited moment when "someday" becomes "today." There is no better time to start than right now.