Crash Course in how to successfully manage 29,000 public employees and a $3.3 billion annual budget
Part Two of the OAG360® exclusive interview with University of Colorado President Bruce Benson
OAG360: At the University of Colorado you’re managing 29,000 employees, 68,000 students and you have a budget of about $3.3 billion a year. What experience have you drawn on to successfully manage that size of an organization?
BENSON: I mean it’s simple. Higher education is not known for its efficiency. It’s known for waste. It’s known for people who don’t’ want to make decisions. It should be a businessman’s operation. Keep in mind, I only have a bachelor’s degree, I’m a conservative, I’m an oilman, and I get along with faculty just fine.
What we have to do is think about is who does what—who bring what to the table. And figure out where your bounds are, where others’ are. People I understand. I was in a faculty meeting in Boulder one time, and somebody said, “If we have that much of a budget problem, maybe we should teach more.”
Wow, what an idea. Somewhere around 30% of my faculty is teaching more than they have to. We didn’t tell them to. They get small stipends for it. It’s about $0.20 on the dollar compared to what they normally get paid per course. So you work with people and you get through everything.
I have pages and pages of stuff that we have done to cut costs, comparing us to what other people have done. And I’ll tell you, we’ve beat the hell out of them all.
Scott Walker [governor of Wisconsin] came out and said, “I’m going to cut $300 million out of higher education.”
So we [CU] looked at what’s it going to look like for Madison, because Madison and Boulder are very similar. We’re both high quality universities. So after they take out those $300 million out of Madison’s budget, their funding is still double what ours is. So how do we do what we do? Through efficiencies.
Our administrative overhead costs are 37% below our national peers and we’re not talking about community colleges. That’s the University of Illinois, that’s Berkeley, that’s all these [large state] systems.
OAG360: What’s causing the inefficiencies in other programs?
BENSON: Lack of business sense. You don’t keep doing things that don’t work.
But it’s not all about making money, it’s about educating kids. But you have to have a sustainable business model and these people just don’t have sustainable business models. If you look at the way they spend money, I mean, I cry every day when I look at poor old Berkeley out there. They pay their professors $185,000 a year. Michigan: $156,000. UCLA: $190,000. Stanford, Harvard – those people pay over $200,000. What do we pay ours in Boulder: $128,000.
Well, I’m all for competition and talent. And that is what we’re up against. But you have to be sensible in what you’re doing. So we have very fine people. They do work at less money than a lot of other places and they’re happier. You have to create an environment that’s good for them and that’s what I think we do here at CU.
So, what’s wrong with the other institutions? You don’t hire a bunch of history majors to run a giant corporation. And that’s what this is. Nothing against history, I’m just saying that that’s something you just better not do. So, you better bring in people that know how to run [a business] and know how to make decisions.
When I started here they’d come down to my office, two or three people in a group, and they’d say, “Oh my god, we’ve got this problem, oh my god.”
I’d say, “Ok, tell me about it.” And they would.
Then I’d say, “Okay go do this.”
They’d say, “You sure?”
I’d say, “Yeah.”
They’d say, “You don’t want to study it?”
I’d say, “No, just go do it.”
I’m proud of the fact that we’re cutting stuff out. Not willy-nilly, but thoughtfully. And that we’re putting in programs that will make us money. I mean, I had to go through a real slug fest with the legislature and the governors to change the number of international students. And I had to guarantee, and promise, we would not cut out any resident Coloradan from our institution. But we can now go from 4% international students to 12% — Boulder is the campus that I’m talking about here.
So, when it gets all done, it’s $80 million dollars of revenue. We charge $35,000 for a non-resident/international and we charge $11,000 for a Colorado resident. That’s a huge economic driver. And that’s only half of it. The other side is if you’re going to be an international university, then you need international students and faculty.
We cut costs for power generation. We redid a whole bunch of our power generation, saved a ton of money. Procurement: we used to have to be in the state system. Saved millions of dollars every year by getting out of it [for procurement]. Again, another battle with the legislature, but we got it done. So we’re doing all of that. Put in self-insurance, and we put in an insurance audit. We found $2.3 million dollars worth of people on our insurance that shouldn’t have been put on it. It just keeps going. I can’t tell you how much there is of that.
OAG360: You’ve been president of the University of Colorado for seven years now. Can you tell me your impression of the generation of students that’s currently coming through the higher education system?
BENSON: I think there is a change.
I’m not in The Greatest Generation; I’m in the Silent Generation, because I was born in the ‘30’s. Go back and look at the “Me Generation” of “give me everything.” I think the younger people today are much more inclined to say “I’m going to go out and work hard.” There’s no science behind that. That’s just my sense.
My kids, they were born between ’64 to ’70. So my youngest is 45 and my oldest is 50 and there’s one in the middle. They all work hard: don’t misunderstand me; but I think there is a generation out there that’s kind of like “you need to give it to me” and I think we’re bouncing back away from that, more into people want to work hard to succeed.
OAG360: What do oil and gas companies need to do to attract those kinds of students as they come out of college?
BENSON: Probably get the price of oil and gas back up so they can pay those exorbitant wages they have been getting. The people that I feel sorry for right now are the guys that are just graduating in engineering. They thought they were each going to get $100,000 a year and now they can’t find a job.
OAG360: I’ve heard a lot of students graduating from the School of Mines with degrees in petroleum engineering are having problems finding jobs.
BENSON: That’s exactly what I mean. What are they going to do? I mean, their sites were up here and they were in hog heaven and were happy and now they can’t get a job. So what are you going to do? Well, you wait it out. You do what you have to do to survive and go back and get a job in the industry [when companies are drilling again].