When he applied for a position at the University of Wisconsin–Milwaukee (UWM) in 2005, Jerry Tarrer was asked how he could make the leap into higher education after working in K–12 charter schools.
"It’s all about business acumen," he replied. "If you understand the basic principles of business, you can navigate any environment."
After landing that initial job as a business manager in UWM libraries, Tarrer has navigated a climb through facilities services, and finance and administrative affairs, to reach his current post: associate vice chancellor and director, business and financial services. With a staff of 47, Tarrer reports to the CBO and is responsible for a variety of offices, including budget and planning, controller, bursar, procurement, and travel.
What’s the most challenging aspect of developing the university’s $700 million operating budget?
Right now, our biggest concerns are dwindling state support and declining enrollments. That combination keeps me up at night wondering if we have the right safeguards in place to ensure the overall integrity of our institution and its financial success.
What steps are you taking?
We are being more strategic about enrollment management. We need to understand all the factors that impact enrollment, such as demographics, quality of the programs, ability to get the word out, and targeting the right population. Last year, we made a coordinated effort to recognize the partnership between finance and enrollment management. Now, I’m at the table.
As more and more of our budget comes from tuition revenues, we have to make sure we are carefully and realistically forecasting our enrollment. Any swing in enrollment has an impact on our overall financial situation and budget. In the past, when much of our budget came from the state, we didn’t see as much volatility.
We need good metrics for forecasting enrollment and building that forecast into our six-year income statement for the campus, recognizing that if we are looking at declines in enrollment, we have to be prepared to cut costs or find another source of revenue.
I understand you are leading the development of a new budget model for UWM?
Yes, we have chosen a hybrid responsibility center management—or RCM—model, but we haven’t implemented it yet. We just this morning spent a couple of hours finalizing the proposal that will land on the chancellor’s desk. If the chancellor says it’s a go, we will implement it in the spring.
Why the RCM model?
We wanted to position the institution to address changes in the higher education landscape, to take advantage of local opportunities, and to shift resources from programs and areas that are not in demand.
We’ve had an incremental model for years, which worked well when we had less volatility in our revenue stream and more support from the state. Times have changed. The incremental approach doesn’t give us the flexibility to leverage our resources to invest in areas of excellence or growth opportunities.
Why go with a hybrid?
In a full-blown RCM, we would invoice the income generators based on agreed-upon metrics. While we may move to that, our budget model working group decided in the short run to tax revenue.
Our campus is very collaborative, with strong shared governance. We have been talking about this model since 2012. We’ve tested this approach, incorporated feedback, and addressed concerns.
What were the concerns?
We built in a metric for distributing tuition revenue based on student credit hours. Faculty members worried that it would create an incentive for course duplication and take the emphasis away from quality academic programs. We heard this over and over. Another concern was that the graduate schools would not have enough money for their programs.
What mistakes are institutions making in their financial planning?
Overly optimistic forecasts. We need to do the homework and analyze the data to understand what is driving costs and enrollment growth.
What is the best business advice you have ever received?
We work in an environment where people are very polite; maybe that’s part of being in Wisconsin. A former boss once told me, "Don’t be so polite that you sweep the real issues under the rug." Her philosophy was to use data and information to address the real, core issues—without being abrasive—when you’re trying to solve a problem or move the organization forward. I have become quite a champion of that philosophy.
Give a description of your management style.
I like to try out new things to improve the work environment. For example, I had a really strong employee who did most of her work through Web interfaces, even when she was in the building. When she wanted to move to Oregon to be with her daughter and granddaughter, she made a proposal to telecommute.
Although we had never allowed anybody to work from home, I was very receptive to the idea because I trusted that she could do the work and I wanted to open up this possibility for the rest of my area.
We answered HR’s questions and developed a policy around telecommuting. Now we have a number of other people who spend a couple of hours or a day working from home, which has improved morale and helped our staff members become more committed.
During your decade with UWM, what’s the most important professional lesson you have learned?
In corporate America, there is a hierarchy that’s clearly understood and defined. In the higher education environment, especially on a campus like ours where shared governance is strong, it’s a lot more about persuasion and having your facts straight. You have to help people understand what you’re doing and why you’re doing it. You can’t just say, "Do this." You have to explain how this will make their lives better.
As leaders, it’s our re-sponsibility to help people understand—and to come to consensus—on what’s best for the institution. We all have different perspectives, but if we reach a mutual understanding, we can move together toward commonly identified goals.
How do you unwind from the pressures of the job?
I read Eastern philosophy, I enjoy yoga, and my wife Gloria and I salsa dance. She was a dancer when we met. That’s her thing, so I had to get on board. We have five children from age 6 to 18 so that keeps us busy.
Gloria, who is a fitness instructor, also has me in her fitness classes. I’m often the only male in her Zumba class of 100 women.
MARGO VANOVER PORTER, Locust Grove, Va., covers higher education business issues for Business Officer.
