University Expense Growth

A new Moody’s Investors Service report says that “…enrollment at public colleges was essentially flat, revenues grew less than 2 percent, and expenses increased more than 3 percent—nearly twice as fast as inflation… ‘The developing trend of expense growth outpacing revenue growth is unsustainable’.” (CHE, 14 August 2013).

The question is whether the highly educated leaders of public higher education will simply continue doing what everyone else does: Address their cost problem by taking it out on lower-wage, value-creating workers – faculty and staff. Or, will they do something different?

There is a better way. Lean management can be used to address current and future financial and non-financial challenges in higher education. It is illogical to keep using the same old tired routine of budget cutting. This painful, zero-sum (win-lose) approaches to solving problems drive people apart and usually do not lead to the kinds of substantial or lasting improvements demanded by students and other stakeholders. They also reflect a dramatic void in creativity and innovative thinking.

Lean Teaching and Lean University describe how to create and deliver improved educational services (quality, access, affordability, attainment, student engagement, graduation rates, and post-graduation student success), and reducing costs in non-zero-sum (win-win) ways.

Lean management is a far more productive approach to improving higher education. It offers the unique opportunity to do good without doing harm. The alternative causes me great worry.

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