Consultants will study UNC before Spellings starts work

A $1.1 million, privately funded study by a management consulting firm will analyze the UNC system’s administrative operation before UNC President-elect Margaret Spellings arrives in North Carolina, at her request.
A $1.1 million, privately funded study by a management consulting firm will analyze the UNC system’s administrative operation before UNC President-elect Margaret Spellings arrives in North Carolina, at her request.

A $1.1 million, privately funded study by a management consulting firm will analyze the UNC system’s administrative operation before UNC President-elect Margaret Spellings arrives in North Carolina.

Boston Consulting Group was hired in December through the UNC Foundation, with money from an anonymous donor. Work got under way in earnest this week, as consultants began interviews with more than 100 people, including UNC Board of Governors members, chancellors, financial officers, faculty leaders, student leaders and legislators.

“Like any new leader, I want to make sure that if we’re going to play NFL ball – it’s the term I keep using – we need to make sure we have the best players fielded on the team, internally,” Spellings said in a telephone interview Friday.

According to a contract released to The News & Observer, the eight-week study will be an in-depth examination of the UNC General Administration – a 200-employee operation that handles budgeting, human resources, academic affairs and other functions for the 17-campus system. Consultants will assess the operation against legislative mandates and strategic priorities for the state’s public university system. They will then develop a “high-level plan to ensure efficiency and effectiveness in each core General Administration function,” the contract said.

The study was Spellings’ idea. The first step, she said, is to get input “from our various customers and users,” including campuses, legislators, the business community, boards of trustees and others.

The interviewers will ask people about the university system’s strategic plan, developed under former President Tom Ross, and what elements of that are most important. Spellings has said she’s likely to zero in on a short list of priorities.

She doesn’t start the UNC job until March 1. The study is one of several efforts to smooth the path for her. She will meet with the UNC Board of Governors in February during a two-day retreat. She’s also been making the rounds during visits to the state, meeting with legislators and others.

Next week, she’ll be in Charlotte, where she’ll meet with former UNC presidents Erskine Bowles and C.D. Spangler Jr., and the Chamber of Commerce. She has already met with Ross and Molly Broad, who was UNC system president from 1997 to 2006.

Spellings said she has tapped the brains of other university leaders around the nation, including Mitch Daniels at Purdue University and Janet Napolitano at the University of California. She conferred with Condoleezza Rice, now a faculty member at Stanford University. Rice, former U.S. secretary of state, served with Spellings in George W. Bush’s administration.

Spellings, who was U.S. education secretary from 2005 to 2009, said she had worked with Boston Consulting Group before, when the firm conducted an analysis of the U.S. Department of Education. Later, after Hurricane Katrina, the firm helped to reinvent the New Orleans schools, which transformed into the Recovery School District, made up entirely of charter schools.

The firm was in the news earlier this year after its study of federal compliance costs at Vanderbilt University, which were calculated to be $146 million in 2013. Vanderbilt’s president then testified before a U.S. Senate committee, saying that complying with federal regulations cost Vanderbilt the equivalent of $11,000 per student – a figure that was called into question by some.

UNC General Administration’s vice presidents and other key staff will be interviewed by the consultants. A memo last month to the staff from Junius Gonzales, interim president, sought to allay employees’ concerns about the study.

“I know this is a time of significant change in the UNC system and that such change can create added uncertainty,” Gonzales wrote. “Change also represents great opportunity for us to contribute in ever-expanding ways to the success of students; faculty and staff; institutions; and state. This assessment presents us with a very valuable opportunity to take a fresh look at what we do and how we do it.”

It’s not unusual for a new president to shake up staffing.

Bowles kicked off an efficiency push in 2006 when he the General Administration budget by 10 percent and eliminated some vice presidents, associate vice presidents and directors. The staff further shrank during recession-era budget cuts early in Ross’ tenure. Positions have since been added. State audits show that spending on salaries and benefits in the General Administration increased by 21 percent from 2010 to 2014.

Spellings said the study will help get a handle on the appropriate size for the operation to achieve the goals ahead.

“What people will be asked is, ‘Are we doing things we shouldn’t be doing? Are we not doing things we should be doing?’” she said, “and trying to get human capital aligned around that.”

Lou Bissette, chairman of the UNC Board of Governors, said the goal is not to cut positions but to make sure the administration can assist campuses and the new president well.

“I don’t think this has been done in some time,” Bissette said. “There’s nothing in this that relates to cuts.”

The retreat next month could be an opportunity for the Republican-dominated UNC board to unify after a fractious year when Ross, a Democrat, was forced out. Divisions developed during the search for the new president and during the leadership of the board’s former chairman, John Fennebresque, who stepped down in the fall. At the same time, the board was chastised by legislative leaders on issues of transparency and some members contended that legislators attempted to improperly influence the search.

“We had a very tumultuous year last year,” Bissette said. “The retreat is designed to help the Board of Governors be more effective and be a more helpful body to the new president.”

A board committee was formed to help with the presidential transition. It met Friday to discuss the coming retreat and plans for Spellings to tour all campuses and meet with people across the state in her first months on the job.

“I think this board needs to do everything it can to help her succeed,” said Craig Souza, chairman of the transition committee. “That’s the goal of this group. She is excited to be here, and we’re excited to have her.”

Jane Stancill: 919-829-4559, @janestancill