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Feb 19, 201509:21 AMMad @ Mgmt

with Walter Simson

On Wisconsin education: why politics and restructuring are bad bedfellows

(page 1 of 2)

Wisconsin has always seemed to have an influence in this big wide world larger than its population of 5.7 million would suggest. Part of that influence arises from the audacious mission of the University of Wisconsin, which includes the directive “to serve and stimulate society.”

It was under this banner, unfurled in 1904, that Harry Steenbock discovered and patented synthetic vitamin D, and that 17 winners of Nobel Prizes in physics, medicine, chemistry, and economics were nurtured. The subjects of the winners’ research have touched us all: cancer, transistor effects, bacteria, cell function. The audacity of the research could only have taken place in a university that had encouraged a larger mission in society.

The university also has a unique structure, as it fostered a sister institution, the Wisconsin Alumni Research Foundation, that invests the proceeds of Dr. Steenbock’s and other researchers’ inventions to promote university life. WARF has not only funded countless life-promoting inventions and technologies, its establishment helped make the intellectual property license a part of both university and venture capital economies. We wouldn’t have the cell phone, Google, Warfarin, or safer radiation therapy without it.

The university itself is a sprawling thing, with 13 four-year campuses and a 2014-15 biannual budget of $2.5 billion. In the current budget, the state’s provision was $1.2 billion, or 46%, which increased by $26.8 million, or 2.3%, over the prior budget submission. Tuition and fees, the other budget component, also increased by 2.3% in 2014-15.

Now Gov. Walker is proposing a $300 million cut to the state’s provision and couching this in the language of a much-needed restructuring. The budget proposal will provide the university system with needed focus and a new, transformative flexibility, he argues.

Let’s examine this from a restructuring perspective.

Restructuring is hard but essentially rational work that usually occurs when a change in the external environment forces reexamination of priorities. In my world, if a client were faced with a 13% reduction in funding from its key constituent — the external change — I would help re-craft the institution’s strategy to live in the new, lower-budget world.

Note that I said strategy, not cost-cutting. So it is likely that some current program, department, or facility would be let go as the forced change in priorities was realized. The essential missions would be maintained, and the company or institution would emerge with its essence not only preserved but also clarified. Given the university’s historic role and mission, it would be natural to entrust the current trustees and managers of the system to come up with the new strategy.


Feb 19, 2015 01:56 pm
 Posted by  Anonymous

What's lost in all this is why the governor now after a re-election has decided that the U W should be restructured and have its budget cut. YOU'VE ADDRESSED IT EXACTLY.....IT'S POLITICAL. The governor saw no need to campaign on the U W issue because his announced budget cut would have brought to light that he had run the budget over the cliff with his political pre-election tax cuts. Only when safely elected was he willing to couch the $300 million cut to U W under the guise that the U W was in need of restructuring. Let no one be fooled, this governor has put Wisconsin in a fiscal straight jacket and he is cutting everything and anything, borrowing and refusing to pay existing debt as it comes due to overcome the deficit he created. U W restructuring and autonomy is merely political cover for the fiscal damage that he has wrought.

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