Though I share in this budding optimism, I am painfully aware that the unfavorable forces confronting universities are the result of deep, long-term trends and not simply fleeting political or economic perturbations. We have entered a fundamentally new era characterized by increasing constraints on revenue, severe cost pressures on everything that we do, and heightened public expectations. Whatever favorable things may happen in Washington or Harrisburg, times are going to continue to be tough for us, and we must respond creatively.
Penn and all of higher education will continue to be the focus of increasing public attention, not only from public officials but from business and community leaders, the media, and the families of our students. The fact is that our missions of international leadership in teaching, research and service are simply too important to be ignored by anyone who has a stake in the future of our economy, our society, or our local community. International competitiveness, technology transfer to industry, the quality of the American workforce, the education of foreign and American students for leadership roles in a changing world, solving the health care crisis, providing a working model for social relationships in a diverse and open community, creating an efficient and supportive workplace, and charting a responsible course through our long-neglected environmental dilemmas-all these tasks depend heavily on what we do here at Penn everyday: create new knowledge, teach, and live together.
The invitation that these expectations provide, coupled with the challenging intellectual opportunities that abound in almost every field, hold out the hope of an exciting future for us here at Penn. But if we are to make the most of our prospects, if we are to prove that the nimble can prosper even in parlous times, we are going to have to learn how to do more with less, how to achieve higher levels of quality with fewer resources.
The faculty and administration are already well started upon this path. Several years ago, we began the process of reducing the percentage of our resources that is spent on the administration of the University. This process must continue. In December 1991, Provost Aiken and the Chair of the Faculty Senate, Louise Shoemaker, appointed a joint Faculty Senate-Administration committee on cost containment within the University. I look forward to their advice on further measures we need to implement.
My own rough estimate is that we need to reduce our administrative cost base by 15 percent over the next four or five years. We want to do that carefully and in ways that do not destabilize our operations. This implies a thoughtful re-engineering of all of our administrative processes (both centrally and in the schools and resource centers) through a well-coordinated reassessment program-not simply through crude budget slashing.
Our priorities in this effort were set forth last spring in a series of meetings with faculty and staff on the 1992-93 University budget that responded to the loss of our Commonwealth appropriation. Provost Michael Aiken, Acting Executive Vice President John Gould, and I aim, first, to protect the academic core of the University; second, to utilize normal attrition, transfers and retraining to avoid layoffs to the greatest extent possible, while gradually reducing the total number of staff positions; and third, to manage our way through this restructuring so that we increase the quality of the administrative services we provide even as we lower their unit cost. We have already accomplished some of this kind of careful restructuring through "total quality management" teams and in more traditional ways, and we will be more visibly and extensively engaged in it during the next few years. We will also be energetically seeking new sources of revenue to supplement our traditional sources whose growth is increasingly constrained.
Collectively, this mandatory re-engineering of what we do will make us better, stronger, even happier, but it will not be painless. Fortunately, as compared to a number of our peers, we are in sound fiscal and academic shape, well-managed, well-focused, and with several strategic advantages to help propel us into the 21st century as a model international research university that puts undergraduate education at the center of its efforts.
I will discuss the sources and the implications of this new era for Penn, and for higher education generally, in these pages during the weeks ahead. For the moment, we must each recognize that while these are not times for business as usual, they need not be catastrophic times either. We must bend the times to our own purposes.
January 12, 1993
Volume 39 Number 17
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