In the first two parts of this series, I presented the structural features of Responsibility Centered Management (RCM), how money flowed throughout an RCM campus, and how campus costs were covered in this decentralized budgeting system. It is now time to discuss some of the “political” aspects of RCM, namely campus (from faculty to the top) attitudes that determine the success or failure of RCM. There are institutions where RCM has operated successfully for years as well as institutions where it has failed and been replaced very quickly.
In reading about RCM and in talking about it with deans across the country, I have concluded that there are some behaviors that will almost certainly render RCM a useless and failed exercise. Upon further reflection, it seems that each of these toxic circumstances can be controlled or eliminated with vigilance from the RCs and by strong and committed leadership from higher administration.
1. Failure to recognize who the competition really is.
Under RCM, deans and chairs are incentivized to recruit new students to their programs/courses, generate additional credit hour income by improving retention, and attract students through the use of best practices in pedagogy, creative uses of technology, student-oriented course scheduling, optimizing section enrollments, etc. What is expected here is that these efforts be largely externally-facing such that they produce new student growth. However, in some cases we see the deliberate recruitment of other majors from within the institution and program/course duplications (see item 2 below). A given unit in one school should never be allowed to actively solicit a student who is in, or committed to, another school. This helps one unit, hurts another equally, leaves the institution neutral in student head count and credit hours/income, and causes friction between the schools. All units, however, should be able to recruit from the exploratory and undecided student pools on campus and talk to students from other units who initiate contact with them.
Upper administration (the provost) can take some steps to lessen the occurrence of situations like this. The provost could call a meeting of the deans as early in the process of converting to RCM as possible. At that meeting, the ground rules will be laid for what might become a formal policy. The driving element of RCM is to empower and unleash the creative talents of the faculty to create a bigger pie and not to compete in an internal, zero sum game for a bigger piece of the pie. Thus, efforts of the units should be directed at attracting more students to campus by successfully competing with other institutions.
The provost could also monitor student movement among the schools on campus and have follow-up conversations with those schools into which student are migrating in larger than expected numbers to learn the reasons for the changes. It could turn out that this school is doing everything right in creating strong programs in which students are highly satisfied and are well-prepared for success in gaining employment and/or admission to graduate programs!
2. Allowing course poaching.
This is an expected outcome of RCM and has turned out to be a very real threat. Again, it is an aggressive dean seeking more student tuition income who, rather than creating something new, alone or in collaboration with another school, instead looks for successful classes (large enrollments, required by many students around campus) and, identifying one, places a new course request with the institution for the identical class or a class with a different title but essentially the same content. It would be marketed as fulfilling the same function as the original course but would be marked by minor differences in some components of the class, an “improved” (e. g. new technology used) version or, if it is a course required by the unit seeking to duplicate it, is justified by comments like “we should be able teach the courses required by our majors” or “our course has a special emphasis that better meets the needs of our students.”
There are also examples where entire degree programs are duplicated by submitting simultaneous new course requests that have altered course titles along with content order variations. These are deliberate acts to circumvent any duplication ban/policy that the institution may have. In general, academic departments must resist attempts by other units to teach classes within their domains. Should the institution switch to RCM, the RC must have its courses (and their income) clearly staked out, thus blocking others from poaching.
The advice for units that routinely teach large enrollment undergraduate classes (general education) is be first in proposing and in gaining course approval, be collaborative with units being served, be conscientious in assuring their continued quality, be vigilant in terms of carefully reviewing new course requests and be prepared to remonstrate when appropriate. As academic matters, all new course and program requests ultimately fall on the provost’s desk. The provost must stay true to the principles of RCM even if it means overturning a curriculum committee recommendation or violating personal sympathies. These restrictions should be uniformly imposed even when the proposal comes from a unit that is struggling to remain viable; there are other ways to assist without jeopardizing the entire budgeting model.
3. Failure to hold to RCM principles.
This occurs when the numbers have been run and some schools have earned additional income while others are shown to have earned fewer dollars, yet budgets of all parties remain largely the same. A variation on this theme is a school that earns $1 million in additional tuition and overhead that sees its appropriation reduced by a similar amount. The explanation is that the high performing school received the extra income it earned, but the decision was that the second school needed to have its support level maintained.
Performing ad hoc subventions subverts the RCM system and creates a potential fiscal crisis in the high performing school that may now have insufficient funds to provide its enlarged student body with a quality experience. In addition, one has to wonder how hard that school will work to enhance its income in the future with a payback like this. It is difficult to say what the problem is here. It may be that RCM is not philosophically supported by upper administration (the board may have made the adoption decision), they simply could not reduce the funds of the school that they have a strong affinity for (perhaps their own!), or they feared faculty or student backlash. Earlier I stated that it takes strong and committed leadership to make RCM work; I would add courageous to that list.
This is the time to discuss the consequences of a school falling into the red. This should not happen in the first year or two of RCM if the appropriate homework was done setting the school subvention levels and providing that the dean did not go on a huge hiring (or other) binge. It can happen within the ebb and flow of popularity of our majors. The obvious examples at this point are the surge in interest in STEM fields and lower interest in the liberal arts and the market saturation impacting law. The fear of deans of such schools is that there will be resentment from other schools because they will have to pay to cover the deficit. This is true only from an accountancy perspective. For example, assume that liberal arts, the only one of 10 campus schools with a deficit, is in arrears by $1 million. Other schools’ surpluses might total $5 million thus covering the debt on paper only. Each RC retains its surplus or debt. There is a much less fiscal impact to the other nine schools that comes in form of lower taxes for liberal arts that the remaining school must make up. This assumes that the deficit in liberal arts was the result of a loss of enrollment/tuition income which would impact the assessment drivers.
With that said, the school of liberal arts would be required to develop a plan with campus to cover the deficit. The plan might include some or all of the following measures; temporary freeze on new and replacement faculty and staff hires, limited or no salary increments, travel restrictions, increased teaching loads (replace adjuncts), the development and aggressive marketing of new academic programs (perhaps in collaboration with other schools), optimizing of enrollment through combining sections, etc. IUPUI has had schools go through this type of protocol, and I did not detect any ill will toward those schools although some of us felt, in one case, that the school carried too many faculty.
Part 4 in this series will run next month.
N. Douglas Lees is professor and chair emeritus of biology and former associate dean for planning & finance in the School of Science at IUPUI.