The changing role of the business officer: it's a brave new world for the folks who hold the purse strings. (People & Politics).

Budgets get cut, endowments go down, and tuition goes up. In the midst of all the turmoil stands the business officer, like a beacon in the fog. He or she must somehow make it all work. No longer just the "money person," the business officer's role has grown to encompass more negotiating, creative thinking, and human resource skills than ever before. University Business asked four business officers from around the country to share their thoughts on just how dramatically their jobs have changed, and the challenges surmountable and otherwise that they face.

University Business: It's no surprise that, these days, to stay competitive, IHEs must behave, in many ways, like businesses. With that in mind, how would you say your rote as a business officer has changed on your campus over the last few years?

Krumm: There is now a significant emphasis on accountability and ethics. These things were always important but, considering what has gone on in the for-profit sector, boards and publics want even more assurances. Second, is risk. It's not just the auditing profession, but higher education is looking at the variety of rotes that risk plays in a variety of activities that faculty, staff, and students are involved in. Higher education is more carefully looking at risk and risk management. Some of that is relevant to student activity, but the same thing could be true for classroom experiments and so on. Finally, there's an increased focus on internal control. Institutions--again, partly because of what's gone on in the For-profit sector are looking more carefully across the institution, lot just within the business activities, to see whether the internal controls are there, and whether they're working properly.

UB: Where in that picture do you place yourself?

Parker: Our role has become a little more noticeable and public. We're viewed more as collaborators to accomplish [our institution's] mission, and not just "the cops" all the time. That's one of my pet peeves with some business officers--they think "No" is always ways a good answer. No sometimes is the answer that you have to give, but our role is to be facilitators to help the university accomplish its mission. Sometimes we don't have answers right away, but we try to find ways to fund what's required. We want to be viewed as proactive partners rather than people who always say no. I think we've gained influence because of that.

Peterson: I agree. I think the single, all-encompassing word that describes my role, is facilitator. But I'm also an educator able to explain positions on issues; a negotiator for finding common ground and competition for resources; and a leader in the constant search for new sources of revenue to run the university.

UB: How so?

Peterson: We've been working hard to increase extra-campus involvement, getting involved in organizations in our metropolitan area, and improving governmental relations as well. We're looking for alternative revenues to tuition, whether it's exclusive product contracts or it's our university Infinity card that gets a piece of revenue from purchases made by alumni, faculty, and staff. We're constantly looking for new sources to fund the university so that we don't have to take it from the students.

Parker: Sometimes it's finding a more efficient way of operating. When I came to Houston Baptist, we faced the problem of having to provide more student housing with no way to finance it. One thing that helped was that we were able to do an off-balance-sheet arrangement with a privatized housing company, and then leverage that into a new student center. Then Development got us a small grant that enabled us to add a jogging track and tennis court. That's been a very positive improvement in terms of our housing, our food service, and the amenities for our students. We've been able to use that to generate more cash flow.

UB: How else do you find the funds you need?

Sampson: In my case, I went from being reactive to being proactive. You have to know what is coming and be prepared for it. If we find, at our community college, that the cost of utilities will be going up, for example, what can we do to reduce usage and conserve? We did consortium buying for some of the utilities, and we studied ways to reduce usage on our campus, installing a geothermal system to get better usage. Usually, there is more than one avenue to look at to achieve your goal, so you have to be somewhat of a jack-of-all-trades, and have as much knowledge of different fields as possible, in order to get exactly what you need.

UB: I'd imagine a community college face some additional business challenges that four-year school probably doesn't have. Is that the case?

Sampson: We're probably more community oriented, where part of our mission is to meet the needs of the community and what they need, as far as skilled workers and training. For example, when Atlantic County got gaming some 20 years ago, we initiated a non-credit casino career institute program. We had to have the flexibility and capability to see the need and meet it quickly and efficiently. Then, with the casinos, came hotels and restaurants. We saw a need for chefs, so we started a culinary program. We have the ability that four-year schools don't have, to turn around quickly and meet those needs.

UB: I'm sure those kinds of major decisions--in any school--are carefully considered. How do you help other administrators understand the issues your schools must deal with, as well as their consequences?

Peterson: The number one issue is communication. You have to keep others informed and he able to explain financial issues to non-financial colleagues, and to articulate the effects of executive decisions and the long-term consequences to our organization.

Sampson: You have to conduct open and frank discussions, and have the ability to listen as much as speak. You have to build coalitions among your peers.

Krumm: Yes, it's important for the business officer to be a part of the executive team advising the president and vice president, but also to have a collegial relationship with other leaders of an institution. We all have the same objective in mind. That's even more important today, as we work through these challenging economic times. We're certainly all trying to squeeze as much as we can out of the dollar.

Parker: Our role has been enhanced in recent years because of these efforts, and we've been allowed to participate with other groups on campus in terms of understanding what they are trying to accomplish. They do allow us to have input and share our thoughts in terms of academic programs, student programs, and things of that nature.

UB: Clearly, you have to be involved in all areas of the campus even when they may not appear to have a direct connection to your office. How do you work with these varying groups?

Krumm: One has to be comfortable working with all these groups, because they all have different needs. It takes being open and communicative, and being able to understand the academic process. A faculty member, for example, may be trying to get tenure, trying to do research, and trying to teach and counsel students. One function of the business office is as a service [provider], to held that faculty member do what he needs to do. He wants to be able spend money to hire people, wants to buy equipment, wants to support students, and so on. We try to facilitate the process, otherwise, the faculty member gets taken away from his primary mission and spends too much time doing administrative things. We'd rather have him teach, interface with students, and do research.

Parker: I start with the idea that I am dealing with very intelligent people who will understand the facts that will get us fairly close to the same conclusions. We have an overriding philosophy at HBU that we will be in the black financially. So, I try to demonstrate positive ways to get where they want to go. For example, they may want to expand an academic program that will take some seed money for a couple of years to get going. By studying faculty loads, class sizes, and so on, one of the ways you can create a cash flow is to reduce sections in other classes. So we have more efficient class sizing, and we can spread our faculty around and make them more efficient.

UB: But, obviously, you can't always say yes. What about the times there is no way to do what you want?

Parker: Occasionally we conclude that, well, this is about all we can hope to get. Sometimes I have to change sides of the table, so being able to say yes helps when, eventually, I have to be the naysayer. When the financial officer can do that it builds credibility. Then, when you have to say, "Look there's just no way we can do that--it won't work," people listen more, because they know that you will go to bat for them if the facts seem to be there.

Sampson: Yes, you have to work to make sure there is a team effort to share these final decisions and confirm that you have mutual values. No matter what a decision is, you have to agree to have the care and conservancy of the institution at heart, because that is the main object.

Parker: It's that way in life--if people believe you are actually trying to help, whether you actually succeed or not isn't always the bottom line. If you've really tried and you've exhausted all efforts and resources, then they can be reasonably satisfied. If you build a reputation as a facilitator--not a guy who has money hidden in his back pocket that he magically pulls out to control or manipulate people, but as a person who is willing to work hard to find ways to help with your goals--then it's a win-win.

UB: What is the worst thing a business officer can do? What would throw the cause back to the dark ages?

Sampson: I believe the worst thing a business officer can do is resist change. Sometimes, we get so caught up in the process that we lose our flexibility and don't look at the expected outcomes. We say, "We've always done it this way. You have to do A, B, and then C and that's the way it's done." But sometimes, you have to leave yourself open to being more flexible than that.

Peterson: I agree. I've seen people who were autocratic--their standard line is, "The answer is no, what's the question?" They have a bent to make snap decisions. That was the old image of the CBO--to be the conservator, you always said no. I don't think that exists much anymore. I've asked a number of my colleagues how they perceive themselves, and many came up with the same word: facilitator. It helps us lead change and move us away from the dark ages.

Krumm: I believe the worst thing would be to have a personal ethical violation. Once one goes into that, everything else simply comes to a screeching halt. I've got to be able to say yes, and be able to say no, but I've got to have sound reasons for both. You have to be able to justify what you are doing. We are at the public trough, whether it's a donor, whether its tax revenue, or whether it's the hard-earned money of a mom and dad. We have to--both personally and as an institution--make very responsible use of those funds.

UB: What's your role model for conducting your duties?

Parker: I spent my early career at what is now the Baker Hughes organization [which provides products and services to the oil and gas industry]. They had a decentralized view of management in that the person closest to an activity is probably best equipped to make most decisions. Being exposed to that has greatly influenced my thinking, because I don't want to control every department on campus--I don't have the ability or knowledge or the time. That's counterproductive. I don't know what, say, Student Affairs needs to do; I have an idea, but you have to believe that the people hired to do that job will know precisely what to do, and, given the resources, do it well. If you're going to grow people, you have to give them responsibility and authority.

Krumm: I've been mentored by a number of other CFOs in the country, such as Wilbur Pierpont at U Michigan. He is considered in many circles to be the dean of higher education finance. I also attend seminars with other business officers, and I listen and read widely about leadership and management. Our objective is to produce excellence in all that we do, and leadership is helping others find a focus and to be successful in what they do.

Sampson: When I first started here, there was a vice president of Administration who was a role model for me; he has been my mentor over the years. He always generated trust, and he always made an investment in people. That made an impression on me; even if individuals didn't agree with him, they trusted him. He could encourage people and motivate them to reach more potential than they thought they could.

UB: What do you know now that you wish you knew when you first took the job?

Sampson: Now I know that conflict is good. When I first started, I was one of those people who thought everything had to be going smoothly, and everyone always had to agree with you, in order for you to be doing a good job. What I have discovered is that conflict is not negative; it's helpful. Today, I encourage people to debate and have discussion, because that's how we will move forward. You can turn conflict around and make something positive.

Parker: Frankly, I was surprised at how slowly things move in higher education. In the business world, things have to be done now. There often is no time to analyze and discuss in a broad sense. Observing the phenomenon of university committees blew my mind at first! But now it's easier for me to be more patient and understand the process. It's challenging, but that's where people skills become very important.

Krumm: I've been at Texas A&M for six-and-a-half years, and was at Michigan for 30, and I honestly didn't know it would be this much fun. I knew there would be tough issues--it's never fun to not have the money to do what you want to do--but you get there through time and experience. You have to enjoy what you are doing. That's part of leadership too--to figure out how your employees can have fun.

PARTICIPANTS:

William Krumm, Vice President and Chief Financial Officer, Texas A&M University

Herbert Peterson, Vice President for Business & Finance, University of Richmond

Richard Porker, Vice President for Financial Affairs, Houston Baptist University 

Terry Sampson. Executive Director of Business Services. Atlantic Cape Community College (NJ), and current President of the Eastern Association of College and University Business Officers (www.eacubo.org)