As with budgets that I’ve managed while guiding businesses through challenging times, the devil is in the details. The Board will review the President’s plan in detail; as a concerned alumnus, these are my initial reactions to details released so far.
After a preliminary view, I believe the College’s plan to address the fiscal crisis seems to be a smart and balanced program. The proposed way forward takes into consideration multiple stakeholders interests and effectively closes the gap without excessive tuition increases.
I particularly like the idea of reorganization for continuous improvement, cutting out waste, overlap and driving purchasing savings. Every large organization, over time, finds itself with excesses, redundancies and inefficiencies that must be rethought and realigned out of the system.
It is no surprise that President Kim has taken a very thoughtful approach, with fresh eyes, to re-imagine how the College will be administered and, in so doing, drive out cost that is non-essential to the core of the Dartmouth experience. I’m very pleased that there has been no direct impact on the faculty who are the engine at the core of a Dartmouth education.
Where force reductions were necessary, they appear to have been approached in a humane and conscious fashion through attrition and voluntary early retirement, minimizing the need for layoffs. Resizing an organization is never an easy process and I know the personal challenge President Kim faced in making these tough choices. He has done so with skill, caring and an eye toward preserving the values and the heart of Dartmouth.
Force cutbacks are always painful for those who leave and those who stay – I know, as I’ve implemented them. One lesson I have learned is to have overall budget cuts (not just staffing levels) produce more than the estimated shortfall. While cuts are painful, the most corrosive impact on morale is a continuing set of rolling cutbacks.
I applaud the President for putting his own skin in the game to resolve an issue that he inherited. By reducing his own pay he demonstrates his personal commitment to owning the problem and being part of the solution. This should make it easier for the rest of the organization to accept the proposed benefit reductions.
Finally, I am delighted that the College was able to preserve our need blind admissions policy. This is vital to attracting a diverse and exemplary student body.
Financial crises can help focus all stakeholders and enable systemic changes that would not otherwise be instituted. Especially in a non-commercial enterprise, inertia is often significant. President Kim has recognized this, and the Board needs to help provide the space for him to act boldly, and to support his expressed goal of acting in long-term interests of College and community.
While this is a great first step to putting Dartmouth back on a sustainable cost foundation, I urge to Board and Administration to continue to be vigilant in their fiscal stewardship of the College. Problems are best solved through prevention. We must keep working our cost base, weeding out excesses in operational waste and non-revenue generating assets while maximizing revenue opportunities. Only then will be able to hold tuition rates in line with inflation and, in so doing, keep Dartmouth within financial reach of a rich and diverse applicant pool.
For more on President Kim’s plans, see http://thedartmouth.com/2010/02/09/news/budget.
