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Bridging Two Worlds: From CEO to University System Chancellor

Presentation Notes
“Bridging Two Worlds: From CEO to University System Chancellor”
Chancellor Erroll B. Davis Jr.
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The Nick of Time
National Conference on Trusteeship
Association of Governing Boards of Universities and Colleges
Monday, April 14, 2008
The Westin Copley Place, Boston

Thank you Mr. Weaver. It is a pleasure to be asked to participate in this year’s conference, and to share the stage with people such as Michael Beschloss and Juan Williams. I should point out that I accepted Rick Skinner’s invitation before I learned that one of America’s top historians and one of this country’s outstanding journalists would be the other plenary speakers. I also accepted before I found out that they were being paid! Rick, had I known this in advance, I may have scheduled my upcoming knee surgery a month early!

Right now, with this group of distinguished speakers, I am beginning to feel a little bit like pledge class filler. In spite of my trepidations, however, like a trouper, I set about the task of composing some remarks, albeit with a heightened sense of humility. Given Mr. Beschloss’s presence on your conference program, I thought it would also be appropriate to provide an example of humility with a historical reference.

Among the many attributes that can be ascribed to the late General Douglas MacArthur, conspicuously absent was a well-developed sense of humility. Today, he would have no problem matching his ego with some of our more outrageous public figures. Toward the end of his life, he spoke at West Point, his alma mater and where he had also served with distinction as superintendent.

MacArthur was being given the Point’s prestigious Sylvanus Thayer Award, and his remarks later became known as the “Duty, Honor, Country” speech. That day MacArthur began his remarks to the Corps as follows: “As I was leaving the hotel this morning, a doorman asked me, ‘Where are you bound for, General?’ “And when I replied, ‘West Point,’ he remarked, ‘Beautiful place. Have you ever been there before?’”

This, of course, reinforces my advice to one of my more high profile and obviously influential presidents. I suggested to him that whenever I got to feeling really influential, I would just try ordering somebody else’s dog around. That usually brings you back to earth real quickly.

In February of 2006, I began the job of chancellor of the University System of Georgia. This is a major public system composed of 35 degree-granting institutions, 40,000 faculty and staff, 270,000 plus students and an annual budget of $5.7 billion. We have an 18-member governing board.

And, as was noted in the introduction, I was stepping into the job after a long career in the private sector – a good part of which was in the utility industry. So, many people wondered as I began my new career if I truly understood what I was getting into. In essence, they asked me where I was going with the note that the Academy, like West Point, was a beautiful place, “but had I ever been there before?”

I took up this new career with a sense of respect and humility for both the physical and intellectual beauty that pervades our campuses. But I also took up the job with a moderate sense of understanding. Again, as was noted, I have sort of “been here before” through my service on a number of higher education boards and through the work of our family foundation. In short, I took up the position with the experience of many of you here who serve as trustees.

But, I also took up the position with a background in leadership of large and complex global organizations. I did not feel completely unprepared. And I did understand that, to be effective, I would need to make a successful leap between two worlds – the private sector and the Academy.

Over the past two years, two months and two weeks, I can say that it has been an “interesting” leap. “Interesting,” of course, is a word one uses to describe ugly babies. The transition has offered some confirmation of what I knew or expected. And, it has also provided quite a few surprises as I have learned more about the mindset and culture of the Academy from the inside instead of from a governance perspective.

So what I propose to do in my remaining time is to highlight some of my experiences and observations as I have worked to bridge these two very different worlds. And, with respect to many of you, who come to the crucial role of board membership or trusteeship, like me, from the private sector, my goal is to give you some insight into this very different world you now have to govern. I have sat – and still sit – where you are sitting.

While I make no promises to “build a bridge to the 21st century,” at least I can discuss how I have attempted to build a bridge from the private sector to the Academy. My comments then, will focus around what I believe are three key questions we must ask ourselves in our respective roles:

1. What is it that we are to ask of our institutional presidents – what kinds of questions and inquiries do we need to make to ensure effective leadership on our campuses?

2. What are the metrics we use and what type of information do we need to be comfortable in our governance and fiduciary roles?

3. Where is governance being done well? Where have boards and leaders integrated good not business, but leadership practices into good institutional governance and strategic vision?

Note that I stressed leadership practices, not business practices -- more on that later. Now, a caveat: the following comments are not necessarily intended to directly answer the above questions, but to provide you with my own insights and guideposts to help direct your work.

While I thought I was keenly aware of the differences in the culture between the private sector and the academy, I didn’t have a full appreciation for the effect of those differences in the management function. And, for those of you who have served on a board or as a trustee for any period of time, you also may have sensed this difference. In retrospect, it may be extremely difficult to understand this difference from the outside looking in. Frankly, I lost about a year because I didn’t fully appreciate how hard it is in this environment to build effective leadership capability and capacity in depth in order to get things done in higher education. To help you better understand this culture; let me compare the different routes to leadership in the private sector and the Academy.

Before I get rolling in earnest, a quick but important note or preface before comparing leadership in the academy and industry. I will be making broad generalizations, and I realize this. Please do not interpret what I say as a condemnation of the men and women who teach our students or have made our American system of higher education the envy of the world. I understand that at many universities great leaders are cultivated, that accountability is central to the culture, and that sustained professional development is a reality. I know that intensive teamwork – on committees, in the classroom, in departments, in labs – is also central to great universities. But all this said, I do believe there are some essential and fundamental differences in culture, and – albeit with some exaggeration – I want to underscore these, to provoke our thinking and, I hope, help you be a little more effective back home.

In the Academy, one’s early years are spent focusing on education – what you learn – your discipline. To earn a terminal degree, an individual has to have tremendous focus – and that focus is, by necessity, is usually quite self-centered. Today, you have a seven-year median after undergraduate school to earn a Ph.D. in the humanities. You end up with a lot of knowledge – but the process is designed to be all about you – your needs, your learnings, and your dissertation. So, now, at age 29, seven years after undergraduate school, you have your terminal degree and if lucky, you get a job as an assistant professor on a tenure track.

And now, your next goal – six years out – is earning tenure. It’s the same process you’ve followed all along, except now you don’t even have a thesis advisor with whom to interact. Tenure acquisition requires a focus on research, publishing, and supposedly teaching and service. But again, it’s really all about you – your research, your publications, your persona, your scholarly stardom. You do well and now, at around age 35, you finally earn tenure. And what do we have? We have a person with tremendous, bordering on incredible, knowledge, in one area – and not a lot more than that.

Now, let’s compare this to the private sector – the commercial culture. The fundamental rule when you walk in the door is that if you can’t get along, you won’t be around long. From the start, the focus is on working in increasingly diverse teams – and on learning team problem-solving skills. You learn to work together and you learn to trust each other. You learn skills: meeting facilitation, negotiation, team problem solving. After some time and some further training, you may be given the chance to manage people. But most importantly, you are assessed annually and you are constantly evaluated.

If you can survive all these filters, then you are given more responsibility over more people and more resources. The system is designed so that either you keep getting better or you reach the limit of your capabilities -- and hopefully don’t exceed them! At age 35, you are a pretty well developed product. For example, I was CFO of a New York Stock Exchange listed company at age 34.

You have been given the experience – you have the seasoning – now the question is how you handle bigger challenges – how do you deal with strategic issues. The tools, however, are already in place. The path to get to this point in the private sector is reasonably clear and usually quite well defined.

So let’s return to our academic counterpart – the now-tenured professor. How do I get this person into a leadership capacity? It’s not just that the path to leadership in the Academy is poorly marked; in some cases, it may not even exist. The background and experience and direction of our newly tenured professors also suggest that these are individuals with absolutely no interest in leadership – in management. The thought process at this point is “I didn’t study for 17 years just to be an administrator – a bureaucrat.” The power of leaders to manage risks and alter futures is very underappreciated in this environment. There is simply no structural or systemic aspiration to lead.

So, what do you do? First you seduce someone into becoming a department chair or assistant – then a dean or an assistant – then a provost or a vice president of academic affairs – and eventually, perhaps, a president. Is there any required management or leadership training in this process? Not consistently. Is there any rigorous ongoing and constant assessment for management ability? Not consistently! There may be some popularity votes along the way – which may do nothing more than reinforce the “make everybody happy” culture. The bottom line is that as a result of this disdain for “administration,” it is often very difficult to get people even interested in being managers and leaders. There is no leadership culture that creates these aspirations.

So you have individuals thrust into leadership positions who come to the table at times with imbalances you here wouldn’t begin to tolerate – short tempers, an inability work in teams, and often rudimentary social skills. What we have in many instances is not an absolute assessment system, but a weighing system of good versus bad. As a higher education leader, if your goods far outweigh your bads, you can get away with a lot of bad behaviors.

Let me be clear; the private sector is not immune to some of these same shortcomings. One has only to look at Enron or the mortgage industry to see the consequences when the culture allows people to get away with bad things. But I would posit that these are the exceptions that prove the rule: by and large, the private sector has done a reasonably good job of setting clear expectations for performance and providing a well-marked path of growth and accountability for its employees.

This is the primary lesson: you cannot expect a culture that doesn’t systemically train leaders, that doesn’t create aspirations in individuals to leadership, to adopt a more comprehensive leadership style and culture overnight. In this environment, processes are seen as something bureaucracies do to you and not for you. In fact, you are working in a culture that reinforces a strong sense of self as opposed to team – a strong sense of my goals versus a sense of the greater good or common goal. But these issues can be addressed; these challenges can be met – you just have to be aware of them at the outset. You can’t ignore them – you must create structures and processes that work around them and through them.

So, in answer to the first two questions – what to ask of our presidents – what metrics to use, I think it is clear that we need to frame them in the context of this discussion on leadership. We should be asking as members of a governing body just what are the processes in place that help develop leaders who understand how to develop leadership in depth and how to use metrics to hold decision makers at all levels accountable for their actions – or inactions.

We need to ensure that we are instilling an understanding of how crucial it is for both leaders and governing boards to base decisions on leading as opposed to lagging indicators. Graduation rates are a lagging indicator. Retention rates are a leading indicator. Leaders must be taught to understand that it is your expectation that they will use leading indicators to alter future conditions.

That is what leaders do – manage risks and alter futures. And with good leadership, we can also clearly delineate the proper role of governing boards to focus on the policy issues and the strategic vision. Governing boards don’t need to be in the weeds on the operational level – but that is a tendency we fall back on when we sense a lack of process a lack of accountability and a lack of any sense of urgency to get something done.

Currently I am focusing on trying to create the understanding for and the buy-in of such processes, first with our 35 presidents and then percolating down. And we are working to create the structures to implement and reinforce these processes. For example, today, there is no System wide HR function in our University system – that’s right! No system wide people function. We are in the process of changing that and installing a true HR function that will begin to implement the needed structures to create a clear path to leadership. We will begin to identify talent and make sure these individuals get their leadership tickets punched early in the game.

We cannot expect individuals to acquire the level of training, skills and seasoning overnight when they begin the leadership process in their late-30’s or early 40’s. We cannot expect the 45-year-old manager in the Academy to have the same depth of leadership kills or managerial maturity as the 45-year-old corporate manager. Our hardest challenge will be to create a system that begins to actively develop leadership skills much, much earlier in one’s career.

There is no question – we have a tremendous pool of bright, extremely talented people in our colleges and universities. However, we won’t get where we have to go in terms of a true System operation, in terms of efficiencies, in terms of process improvements, in terms of accountability, if we don’t develop our people. In fact, the lack of a deep leadership culture has consequences that we, and unfortunately our publics, see all the time in the form of poor risk management.

Simply put, too many things go wrong, too often. At some point, the public simply will not continue to support the truly good and great things we do if we keep demonstrating that we can’t effectively manage the mundane. Until we create a culture of accountability, until it becomes part of our DNA, we are going to remain susceptible to both operational and strategic perturbations.

There is no question that the private sector can offer tremendous resources to help advance higher education goals in this country. The challenge is to understand that these are two very, very different worlds and to figure out how to blend them in ways that truly benefit our colleges and universities. The danger is to ignore these differences and use the brute force approach to impose what many in the Academy view, simply as an alien culture; a culture promoted by the less intelligent who need a lot of rules and processes to simply make things work. The brute force approach won’t produce the results that a good management team wants and that the public expects and increasingly demands.

As Collins notes in his monograph “Good to Great,” planning, discipline and flawless execution are not business principles. These are leadership principles. And that is always the challenge everywhere – building leaders in a systematic manner.

As you have probably realized by now, I have not really answered the third question – who is doing all the right things? The answer is I don’t know yet; I know I am not. But I do see a lot of opportunity to be better most everywhere.

We are engaged in the process of bridging these two worlds at the University System of Georgia. We are working to do it right. But we are not there – yet. The jury is still out on if the bridge will be built – and if so, how enduring it will be. And we must build this bridge in a way that respects the people and values of the Academy, while, at the same time, providing our people with some new approaches to fulfilling our mission of teaching, research and service.
If you look at history – it is no accident that America has created a higher education that is the gold standard worldwide. But others are catching on – and catching up. In our roles as leaders, as trustees, we have an obligation and a responsibility to sustain and build upon this great historical legacy. And we can do that – and be successful – by working together to create a dynamic and effective leadership culture in our systems and institutions.

Part of the success of American higher education has been the historic partnership between the private sector and the Academy. It is a partnership that has a built-in tension – but we must make sure that this is a creative tension that ultimately benefits the Academy. This is the historic legacy that we all honor through our service on boards.

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This is the historic legacy upon which we build a more effective Academy – that educates society to solve the problems of the future – and that responds to them in an increasingly energetic manner. This is the historic legacy that I am proud to serve in my new career – as I am sure, do each of you. Thank you for the opportunity to meet with you today, and to share the stage with such distinguished company.