Chancellor's State of the System Address, January 16, 2007
Chancellor Erroll B. Davis, Jr.
"State of the System"
Thank you. I’m pleased to be here today to discuss the state of the system as we start 2007. This, of course, is my first “State of the System” report. It is interesting that it comes almost one year after my start in this job. So, this occasion does offer me an opportunity to look back at a most hectic year and forward, as well, to the many challenges and opportunities in front of us.
In my former life -- and I should mention that I only have three weeks before I promised I would stop using this term -- I was required to stand before shareholders each quarter and justify their faith and continued investment in my team’s leadership. This really is no different. Our shareholders -- in this case the Governor, the General Assembly, the general public, alumni and, most importantly, students -- are looking for a clear accounting for their continued investment in and support of the University System of Georgia.
Last month I attended the Biennial Institute that is put on by UGA’s Carl Vinson Institute of Government. There, I heard Zell Miller speak -- as only he can. One line from his remarks sticks in my head. A line we will keep in mind in the weeks and months ahead. Gov. Miller reminded all of us in the crowd that “There is no such thing as government money -- it’s taxpayers’ money.”
These taxpayers are our customers. And it is important that we ask -- on an ongoing basis -- “What do our customers want of us?” The bottom line is our customers want and expect us to educate them and their children and grandchildren well. They expect us to boost the state’s economy and its competitiveness and they expect us to provide solutions for the problems of Georgia’s communities. We try to meet these expectations through our missions of teaching, research and service.
Before we talk about how well we are doing, it is important to understand our goals. Our primary mission is to educate. Our goals are to:
- ONE -- admit more students
- TWO -- keep those students in school and progressing, and
- THREE -- graduate more students.
As I have noted previously -- our challenge is to not just do this for an elite but to educate more georgians to higher levels than in the past. We are going to do this by continuing our focus on three areas:
- Increasing Access;
- Maintaining Affordability; and
- Providing clear Accountability for our actions and for the use of the resources we have been given.
These are -- and will continue to be -- our areas of focus moving forward.
So at this year juncture, where are we in this regard? How are things going? The University System of Georgia is a healthy, growing, dynamic enterprise. We are just shy of 260,000 students -- an all-time record high enrollment. The 2.5 percent increase over fall 2005 represents a surge from the more modest percentage increases of recent years. Over the eight years since 1998, the System has added 59,843 students, or an overall increase of 30 percent. To put this in perspective, that is the equivalent of adding a University of Georgia and a Georgia State over the last eight years.
Our FY07 state appropriation was $1.9 billion. We received full formula funding, which was critical to our attempts to keep pace with growth. We received $310 million in bonding authority for capital projects and for our major repair and renovation efforts. This past fall we opened a new institution -- Georgia Gwinnett College. We have strong institutions across the board and during 2006 you named new presidents at six of our 35 degree granting institutions. We are important in many ways to the state. For example, a study last year put the System’s overall economic value to the state at $23.3 billion a year. In summary, the state of the system is relatively good. But maintaining that health is not without its challenges.
I have spent the better part of my first year trying to understand our challenges better. I have learned that this is a large, and perhaps, unduly complex organization with many challenges. We are not looking to someone else to tell us how to meet these challenges or to just hand over money for us to throw at our problems. We are actively engaged in meeting these challenges now and in developing a more focused and strategic approach to dealing with them long-term through our planning efforts.
Let me be clear. We will need some external help to solve our problems, but it is we who must do the heavy lifting. It is WE who must be creative. It is WE who must be more focused. It is WE who must be more planning oriented. It is WE who will overcome our challenges. These key challenges include:
- Balancing access and retention:
As we seek to expand access to educate more Georgians to a higher level, we must also recognize that as the base expands to include students who may not be as well prepared for college, we will see some erosion short term of our retention rates. We are seeing it already. This means will need to continue to focus our attention and our resources on improving retention, even as we expand access. As we increase student access, we also must focus on retaining more diverse groups of students once enrolled.
Through my participation in the Alliance of Education Agency Heads and through the work of our P-16 Department, I am becoming optimistic about the chances for increased success on this issue. Goal #1 of the Educational Agency Head Alliance is to decrease high school dropouts, increase high school graduation rates, and increase post-secondary enrollment rates. The importance of this goal is that increased high school graduation rates and increased college enrollment are related components of the same goal. Our P-16 Department is taking the lead within the Alliance on two key strategies toward Goal # 1that I believe will result in increased college access and retention of students once enrolled.
These two strategies involve coordination of:
- The American Diploma Project, which seeks to align curriculum, and assessment between schools and colleges. The project will hold DOE accountable for college readiness. And it will hold USG and DTAE accountable for increased college enrollment and student success after arrival.
- Georgia's Early College initiative--an alternative way to provide college access to students who are now not eligible for college. Here, we will seek to expand high school student participation in dual enrollment as a strategy to increase access. In addition to these strategies, through our Partnership for Reform in Science and Mathematics -- or PRISM -- initiative, our P-16 Department is isolating key strategies for increasing middle and high school students' aspirations for college--particularly in science and mathematics. These and other lessons learned from PRISM will transition from the existing R&D project, that involves seven of our institutions, to the entire System through our Systemwide STEM [Science, Technology, Engineering, Math] initiative project, that is being coordinated by President Carl Patten of Georgia State University.
And, as well, in FY07 we allocated $2.2 million to five institutions where we could see the greatest bang for the buck on improving retention rates.Funds are going into better faculty advising, supplemental teaching, freshmen learning communities, and programs aimed at helping sophomores transition to upper levels as part of the effort to improve retention at these five institutions.
- Increasing graduation rates:
We are not where we want to be or where we need to be. Our six-year graduation rate is only 49 percent, which in 2005 put us 37th in the country. However, we have set and are meeting our goal of improving graduation rates by one percent a year. Improving graduation rates is also the focus of one of our System-level projects, led by President Bruce Grube at Georgia Southern University.
- Increasing efficiency and productivity:
My travels around the state and my listening sessions helped me understand the uniqueness of this System. But as I have noted often, this uniqueness is selective -- it is applicable primarily to the magic we perform in our classrooms and laboratories. Our back office operations are generally not unique -- and, while excellence does exist, across the board, they are not world class in terms of efficiency.
So, we are implementing new methods for financial reporting, new budgeting procedures for our institutions, and a focus on increasing efficiency and productivity in our back office operations. It started in 2006.
It will intensify in 2007 as we start our more programmatic and strategic efforts in this area. Our Customer Service Initiative is really part of this, as well, as we seek to create a culture of continuous process improvement throughout the System.
We need to be more efficient in order to free up resources for our primary teaching, research, and service missions. A big challenge in this area is that to be really successful, we must find ways to engage the entire workforce. Being efficient must not only be seen as the right thing to do by we true believers.
It also must be seen as being in everyone’s self interest, as well. We must be creative in how we provide incentives for our workforce in the System to make increasing efficiency a permanent part of our culture and our DNA. The simple reality is that today, in our System, it is not clear that operating with fewer resources is seen as being in anyone’s self-interest. We must change that.
- We must also keep faculty salaries competitive:
Georgia has slipped from fourth to fifth among the Southern Regional Education Board states in faculty salaries. This means that among four-year public institutions in the SREB states, the average faculty salary for the USG has dropped one place, relative to the other member states.
Generally, with the NY Yankees being the notable exception, the better the people you have, the better you will perform. We will be increasing our internal investment in training and development to both help retain our people and more importantly, to develop future leaders for the System. Again, this area is one of our System-level projects headed by President Wayne Clough.
But frankly, we also must do a much better job of communicating to the public the contributions our faculty make to student learning and to the economic health of the communities where we are privileged to live and work. No one is going to give us more money because we are smart and good looking and happen to make less than our neighbors next door.We must provide the reason why we need to be paid more. This has to happen in order to build the public support necessary to give our funding partners the ability to support higher salaries for our faculty.
- Developing a System-based strategic focus:
No organization can be successful over the long run without a sound strategy. We are currently in the process of developing our strategic plan for the system. As you are aware, we met on January 5 for strategic discussions and we are presently analyzing the output from that meeting. We should have a plan ready by the end of the first quarter. This Strategic Plan will then set the framework for our long-term actions on our challenges and our mission.
- Distance Learning - Educational Technology:
The question posed here is how should the University System evolve to meet the needs of its customers? One of the findings of the Spellings Report is that higher education has not done a great job of investing in technology or using technology for innovation in both teaching and learning as well as back office operations. We must address this issue -- the rest of the world is; higher education simply cannot fall behind technologically if we are going to continue to serve customers and communities well. More intensive planning began in 2006 and I expect that we will make substantial progress in this area in 2007.
- The final issue I want to highlight is -- Keeping Pace with Growth:
This is our critical challenge. Our capital needs are huge -- I am sitting on ten years of capital requests totaling $3.4 billion. To put that in context, the state bonded $1 billion for all agencies last year. Assuming we receive reasonable amounts of capital on an ongoing basis, our new capital model will help us manage this aspect of our growth.
On the people side of growth, we must create the environment and culture that helps the average time to graduation move from today’s six-year average to closer to four years to free up space for new students. Thus we launched our new guaranteed tuition policy. It encourages students to complete their undergraduate education in four years and should improve retention by providing financial incentives to focus on college and remain enrolled in order to maintain that guaranteed rate.
Another major challenge of growth is that it must not come at the expense of the quality of the programs we offer. We are not going to simply pack more and more people into classrooms and lecture halls. People are paying for a quality education and they should get it. So, our focus in keeping pace with growth has to be on maintaining and strengthening academic quality. Some of our System projects and our Strategic Plan will address this.
Looking back over the past year, we have undertaken a broad range of actions -- all designed to address the challenges I have mentioned and some that I have not mentioned. Ultimately, all of our efforts are focused on helping educate more Georgians to higher levels by meeting expectations around access, affordability and accountability.
In closing, let me note again, we have a strong, vibrant and growing University System. It is a System in which we should all take great pride. This System has been developed, nurtured and maintained for the past 75 years by the good work of your predecessors, including some of those in this room -- Regent McMillan, I won’t name names!
Last week, Governor Perdue talked about the need in state government to lead and to be good stewards. We are committed -- we are performing -- both these important functions as they relate to the University System. This System has been entrusted by the people, by our customers to our care. The expectations they hold are varied, but they are all uniformly high.
As I noted in my inaugural address, from generation to generation, the power of education to transform lives is unchanged and unbroken. This is the ultimate value of education -- when individuals from all walks of life, and from every possible background and circumstance, receive a sense of hope, a sense of purpose and a new direction from it. This is an awesome responsibility -- but it also explains why the public’s expectations of us are so high. With your continued support, however, I believe we can meet these expectations and fulfill our responsibilities.
Over the last year, I believe we have made some progress, together.We have launched a number of new programs and we are trying to change the leadership culture of a large, complex organization. While I do not expect our challenges to go away overnight, I do look forward to working with you in the coming year to address the existing ones and confront the new ones. I also look forward to the accountability of having to explain what we accomplished in 2007 at the same time next year. Thank you.