On Wisconsin education: why politics and restructuring are bad bedfellows

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.

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There’s the rub, because the governor is trying to dictate not only the budget but the strategy as well. Two weeks ago, he released a new mission statement for the university system that eliminated the aspirational language of the last 110 years and replaced it with a bland workforce development goal. The fallout was immediate, and the administration quickly backed off, saying the new language was included because of a “drafting error.”

But questions remained.

For example, how would trustees who have overseen a Steenbock, DeLuca, Carbone, and Mackie deal with both a budget cut and a new mission statement? The answer is, they wouldn’t, because they would be dealing with an essentially political document. Does anyone else think it strange that the budget document was the mechanism used to publicize the new proposed mission statement? Hmm. I have a prejudice as a restructuring expert, and it is that politics and restructuring make bad bedfellows. Restructuring is rational. Politics is not.

I suspect that the university will negotiate a new, less dramatic budget and will live on with its historic mission intact. I also suspect that the budget document was not meant to impress Gov. Walker’s Wisconsin population of 5.7 million but presidential candidate Walker’s Iowa population, which is 3 million.

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