UC Berkeley

Chancellor Birgeneau to implement cost-cutting measures in line with report’s recommendations

UC Berkeley Chancellor Robert J. Birgeneau (left) has said he will implement recommendations made in a consultants’ report in order to reduce costs at the campus by a minimum of $75 million annually over the next three years.

Cost cutting will focus on five areas: procurement, organizational simplification, information technology, energy and student services. Initiative teams will be appointed to design specific solutions in each of these five areas and the university will establish a Program Office to oversee all the initiatives taken as a result of the report.

The Operational Excellence report was published on April 12, and Chancellor Birgeneau released his response to the university community yesterday. He said significant investments will need to be made in automation, process improvements, people, and training, “many of which are long overdue”, and that Cal is exploring low-cost financing options to enable it to borrow the money needed to make these investments.

He wrote: “We have taken dramatic steps to reduce our operating expenses, especially over the past two years.  Nevertheless, we cannot count on the State to cover our full operating costs in the highly competitive market for world-class faculty, staff, students and facilities. I strongly believe that our campus has significant opportunities to achieve the savings and operational improvements that we need. This will require a systematic and sustained effort for the next 2-3 years.  It will not be easy.  Each of us will have to change the way we work, and the way we work with each other, in order to streamline our operations and produce meaningful savings.”

The full letter can be read here.

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  • Transparency

    Chancellor Birgeneau is Now the problem!
    The UCB budget gap has grown to $150 million, and still the Chancellor is spending money that isn’t there on expensive outside consultants. His reasons range from the need for impartiality to requiring the “innovative thinking, expertise, and new knowledge” the consultants would bring.

    Does this mean that the faculty and management of a world-class research and teaching institution lack the knowledge, impartiality, innovation, and professionalism to come up with solutions? Have they been fudging their research for years? The consultants will glean their recommendations from interviewing faculty and the UCB management that hired them; yet solutions could be found internally if the Chancellor were doing the job HE was hired to do. Consultant fees would be far better spent on meeting the needs of students.

    There can be only one conclusion as to why creative solutions have not been forthcoming from the professionals within UCB: Chancellor Birgeneau has lost credibility and the trust of the faculty as well as of the Academic Senate leadership that represents them. Even if the faculty agrees with the consultants’ recommendations – disagreeing might put their jobs in jeopardy – the underlying problem of lost credibility and trust will remain.

  • Pingback: UC cuts childcare services for low-income students – Berkeleyside()

  • Transparency

    All the cost cutting measures are a consequence of the policies, practices overseen and authored by Chancellor Birgeneau and the UCB senior management. The cause for the inefficiencies remain

  • Transparency

    California Assembly, California Senate. Remove funding equal to the cost of consultants ($3,000,000) from University of California Berkeley Senior Management Funding as consultants are doing the work of Chancellor Birgeneau, Provost Breslauer and Cal vice chancellors.

  • Transparency

    UC Berkeley Chancellor Birgeneau’s changing values in changing times. Public and private organizations are into a phase of creative disassembly where constant reinvention and adjustments are constant. Hundreds of thousands of jobs are being shed by Chevron, NUMI, Wells Fargo Bank, HP, Starbucks etc. and the state, counties and cities. Even solid world class institutions like the University of California Berkeley under the leadership of Chancellor Birgeneau & Provost Breslauer are firing staff, faculty and part-time lecturers. Estimates are that the State of California may jettison 47,000 positions.
    Yet many employees, professionals and faculty cling to old assumptions about one of the most critical relationship of all: the implied, unwritten contract between employer and employee.
    Until recently, loyalty was the cornerstone of that relationship. Employers promised job security and a steady progress up the hierarchy in return for employees fitting in, performing in prescribed ways and sticking around. Longevity was a sign of employeer-employee relations; turnover was a sign of dysfunction. None of these assumptions apply today. Organizations can no longer guarantee employment and lifetime careers, even if they want to.
    Organizations that paralyzed themselves with an attachment to “success brings success’ rather than “success brings failure’ are now forced to break the implied contract with employees – a contract nurtured by management that the future can be controlled.
    Jettisoned employees are finding that the hard won knowledge, skills and capabilities earned while being loyal are no longer valuable in the employment market place.
    What kind of a contract can employers and employees make with each other? The central idea is both simple and powerful: the job or position is a shared situation. Employers and employees face market and financial conditions together, and the longevity of the partnership depends on how well the for-profit or not-for-profit continues to meet the needs of customers and constituencies. Neither employer nor employee has a future obligation to the other. Organizations train people. Employees develop the kind of security they really need – skills, knowledge and capabilities that enhance future employability.
    The partnership can be dissolved without either party considering the other a traitor. Employee loyalty to Cal. management is dead – get used to it

  • http://Moravecglobal.com Transparency

    UC Berkeley’s recent elimination of popular sports programs highlighted endemic problems in the university’s management. Chancellor Robert Birgeneau’s eight-year fiscal track record is dismal indeed. He would like to blame the politicians in Sacramento, since they stopped giving him every dollar he has asked for, and the state legislators do share some responsibility for the financial crisis. But not in the sense he means.

    A competent chancellor would have been on top of identifying inefficiencies in the system and then crafting a plan to fix them. Compentent oversight by the Board of Regents and the legislature would have required him to provide data on problems and on what steps he was taking to solve them. Instead, every year Birgeneau would request a budget increase, the regents would agree to it, and the legislature would provide. The hard questions were avoided by all concerned, and the problems just piled up….until there was no money left.

    It’s not that Birgeneau was unaware that there were, in fact, waste and inefficiencies in the system. Faculty and staff have raised issues with senior management, but when they failed to see relevant action taken, they stopped. Finally, Birgeneau engaged some expensive ($3 million) consultants, Bain & Company, to tell him what he should have been able to find out from the bright, engaged people in his own organization.

    From time to time, a whistleblower would bring some glaring problem to light, but the chancellor’s response was to dig in and defend rather than listen and act. Since UC has been exempted from most whistleblower lawsuits, there are ultimately no negative consequences for maintaining inefficiencies.

    In short, there is plenty of blame to go around. But you never want a serious crisis to go to waste. An opportunity now exists for the UC president, Board of Regents, and California legislators to jolt UC Berkeley back to life, applying some simple check-and-balance management principles. Increasing the budget is not enough; transforming senior management is necessary. The faculty, students, staff, academic senate, Cal. alumni, and taxpayers await the transformation.

  • http://Moravecglobal.com Transparency

    University of California Berkeley (Cal) ranking drops. In 2004, for example, the London-based Times Higher Education ranked Cal the second leading research university in the world, just behind Harvard; in 2009 that ranking had tumbled to 39th place