Chancellor announces Operational Excellence effort
To the Campus Community:
I am writing to you again to ask for your continued support as we work to ensure excellence and access at Berkeley for present and future generations.
As you all know, a serious and precipitous drop in funding from the state of California has produced a budget deficit of nearly $150 million for the 2009 – 2010 year for UC Berkeley. I am grateful to everyone on the Berkeley campus for mobilizing to meet these dramatic reductions. Throughout the last few months, we have taken a number of temporary, short-term actions that allowed us to respond quickly to the unprecedented cuts. While we have raised revenue through fund raising, fee increases and other measures, we have also had to assign $67 million in permanent budget reductions.
This approach of temporary and permanent actions has helped us manage through this year; however, it is an unsustainable long term financial strategy. We are now planning for a future that relies less on volatile state funding. Though we continue our political advocacy, striving to convince Sacramento to reverse its disinvestment in higher education, we are also planning for what is likely to be even less state funding next year, particularly if the substantial federal stimulus funding that was included in this year's budget is withdrawn.
We must now stabilize our fixed costs to support the excellence of Berkeley and direct as large a fraction as possible of our resources to our core mission of teaching and research.
With that goal in mind, we are formally launching an effort that will build upon and expand the work already underway to reduce our costs and streamline operations. I will be leading this effort together with Vice Chancellor Frank Yeary. We will be conducting a comprehensive study of our costs - what we spend on our various operational and administrative activities - and developing concrete options that improve operations while reducing our costs.
Many initiatives are already underway and several ideas have also been submitted to Budget Central. These will be incorporated into the fact-finding. Following the assessment phase, we will determine whether and how to proceed with implementation of the most viable options.
We are calling this exercise Operational Excellence (OE) to reflect our commitment to an administration that is as effective and as excellent as we are in teaching and research. I am chairing a Steering Committee with representatives from faculty, staff, students, and alumni, that will oversee OE and advise me on the recommendations developed over the next several months.
As the work begins, we will be reaching out to several hundred representatives of Berkeley faculty, staff, and students to solicit ideas and input. The work will be led by Berkeley managers and staff, supported by an outside consulting firm, Bain & Company, to assist and advise us during the assessment. Your open and constructive participation in this process is critical to our developing solutions that will work for Berkeley.
We chose to engage an outside consulting firm after assessing several other options and realizing that we need this support to complete the evaluation. This particular firm, Bain & Company, brings significant experience in examining complex organizations and has recently completed a similar process at the University of North Carolina and will soon do so at Cornell.
Their fresh, objective view, combined with their knowledge of best practices in operations across higher education and other sectors, will serve us well. A working group of campus leaders and key staff will work with the Bain team to carry out the data-gathering and assessment of options.
We expect the assessment phase of OE to last from early October through March, 2010. During this time, we will regularly refresh the website at http://berkeley.edu/oe with updates and progress reports, and will keep the campus informed through regular communications as we reach milestones in the effort.
Finally, I would like to respond in advance to several concerns that have been raised regarding this effort.
"UCB is being privatized": Let me be clear: UC Berkeley will continue to be the nation's premier public university. Working to be as efficient and effective as we can be is not about privatizing; on the contrary, it is about being the best possible stewards of our public resources to protect and maintain UC Berkeley's academic excellence and access.
"We can do this ourselves with our faculty experts": Undertaking a project of this scope and scale is a full-time endeavor for a full team of professionals and experts. We simply do not have the internal capacity to divert our faculty from their core academic mission to manage a program of this size. More importantly, we recognize that "self-diagnosis" is not always impartial, that fresh ideas from outside our campus may have a role in helping us improve, and that the limited availability of internal resources to spend several months full time on this project would delay both the assessment and any subsequent implementation of opportunities.
"Consultants will decide UC Berkeley's future" – Nothing could be further from the truth. The role of the consulting staff is to aid our internal working group, those who know best our operations and our challenges, in fact-finding, identifying world-class practices, and developing options for the Steering Committee and campus leadership to consider. The consultants will absolutely not make the decisions regarding the strategies we choose to implement on operational transformation. The Steering Committee will make recommendations to the Chancellor.
As we continue on this journey, we look forward to an open and frank dialogue with faculty, students, staff, and community. I encourage you to visit the Operational Excellence website for more information about the effort and to share your ideas about how to improve operations across the campus. Working together, I am confident that we can navigate this current period of turbulence and set our course for a bright and sustainable future.
Yours sincerely,
Robert J. Birgeneau
Chancellor