Critical Thinking: Management Quality
May 25 2012
The D is running a four-part series on the Board of Trustees, and while the descriptions contained therein are more or less on the mark (with a few awful omissions), the young journalists have failed to engage in critical thinking worthy of a Dartmouth education. When Trustee Chair Steve Mandel makes a statement, a good reporter should ask a follow-up question or two. Let's take a look at one example of a missed opportunity for a set of serious, probing responses:
From this statement we can incontrovertibly conclude that MBAs have a high opinion of themselves, but how can we objectively test the proposition that the shift over the last 10-12 years to an MBA-dominated Board has led to better management of the College? Here are a few metrics (there's a Harvard B-school word for you) that an MBA might use to evaluate the effectiveness of Dartmouth's business-oriented Trustees, and that our intrepid reporters might have brought up in their discussion with Chairman Mandel:
Endowment Growth: As we have recently seen, the College's endowment grew more quickly than any of its Ivy peers in the 1990s; however, since 2000, growth has been the slowest in the Ivy League.
Personnel Bloat: The number of non-faculty employees at the College grew by 33% between 1999 and today (almost a thousand new staffers) -- even as the student population remained stable. Unnecessary growth occurred in virtually every area of Dartmouth's budget-sapping bureaucracy. The undergraduate side of the College now has almost five staffers for every faculty member.
Budget Growth: Total College expenditures in 2000 were $383,970,000; in fiscal 2011, the College spent $738,341,000. That's a total increase over 11 years of 92.3% -- a period of time during which inflation was 30.6%.
Salaries and Benefit Growth: Total employee compensation grew even faster than the budget: from $216,456,000 in 2000 to $434,917,000 in 2011 -- a jump of 100.9%. Benefit levels were the most expensive in the Ivy League by a wide margin.
Tuition Cost Growth: Annual tuition/room and board/fees at the College are now the second highest in the Ivy League (after Columbia), even though Hanover is the second-lowest-cost environment in the Ivies (after Cornell).
Personnel: The Board permitted Jim Wright to remain in office long after his sell-by date (if he was ever effective in the first place), and his replacement by Jim Kim and now Carol Folt continues the line of weak leaders. Wright, Kim, Folt and senior administrators like Adam Keller, Barry Scherr and Sylvia Spears would not have been hired by any well run corporation, yet they remained in place in Hanover for years.
Moral Climate: Brand management seems to be the order of the day for the Trustees, with spinning a close second. Kim/Folt's presentation of just how $100 million was supposedly trimmed from the budget did not pass muster with even Humanities professors; to professionals, it was a joke. The hazing controversy was cynically ignored by Jim Kim for almost two months, so as not to cloud his World Bank campaign. Justifications for changes to DDS mealplans and the closing of the swim docks were ludicrously dishonest. Rigor, transparency and the ability to admit that the College is anything less than perfect are not qualities present in the current Board.
I-n-n-o-v-a-t-i-o-n: Does anyone on the Board or in the administration even know how to spell this word? What new programs, initiatives or ideas have been put into place over the last decade to improve the undergraduate academic or residential experience? None that I can see, though the faculty is not short of proposals. But the President and the Board just don't seem to be open to any kind of change (sorry, but committees on binge drinking and sexual assault, or on-line healthcare Masters programs for adult students, don't count as real change). Of all the criticisms of the Trustees and the administration, to me this is the most damning.
Am I missing an area where the MBA-Board has been strong (other than in self-congratulation)? I think not.
That said, the core point here in not that these MBA Trustees are unintelligent. In the world of finance and investing, they have all made a ton of money. The problem is that they, like their other colleagues on the Board, just don't spend enough time at the College to understand Dartmouth's strengths and weakness. In addition to their professional and family responsibilities, they often serve on a half-dozen or more prestigious corporate and charity boards. The end result for Dartmouth is a rubber stamp Board of Trustees that does not interact enough with faculty, students and staff in order to gather the information necessary to oversee the administration. As I hope has been abundantly clear above, the corrosive effects on the College of insufficient oversight are obvious, no matter how much Chairman of the Board Steve Mandel might pat himself on the back.
