John (“Chuck”) Lamb, vice president for finance and treasurer, Marquette University, Milwaukee, recently explained to a student how the business office once used carbon paper to make multiple copies of memos. The student looked at him blankly and said, “What are you talking about?”
Just as carbon paper has disappeared on college and university campuses, so has the once-prevalent idea of the chief business officer as the money minder who toiled primarily behind the scenes. A decade or two ago, the CBO’s main contact would have been with the president and the board. Today, it’s equally important for the CBO to forge and maintain bonds with the provost and other cabinet members to converse, share ideas, and consult among each other—in some cases, even before speaking with the president.
The objective: Provide the best possible advice and guidance, financial and otherwise, to senior leadership.
“Our focus hasn’t really changed, in terms of the fiduciary and financial stewardship of the university’s monies and investments,” Lamb observes. “What has changed is the need for business officers to expand their knowledge base and their understanding of what is happening around them—not only on campus but also throughout the world.”
Higher education, like any business these days, does not operate solely within its own sphere. Societal, demographic, technological, and economic trends—as well as world events and developments—can all affect enrollment numbers, endowment earnings, the ability to attract international students, the mix of educational offerings, and more. To business officers falls the responsibility of making sense of all that information, so both they and their colleagues on campus can do what’s best for the college or university.
Take, for example, a department or college contemplating the establishment of a degree program or physical campus in another country. While senior faculty or the CAO might spearhead the initiative, the business officer needs to understand the way it fits into the whole institutional strategy. From the start, the CBO would likely be involved in analyzing all aspects of the up-or-down decision, planning and managing the myriad components needed to support a global endeavor, and putting the expertise of the entire finance organization behind the program once it launched.
That active, strategic role is a far cry from the historical view of business officers as pure number crunchers. In fact, being “only” an accountant is no longer sufficient. While financial forecasts and cash-flow projections remain important, business officers also must be well versed in investment vehicles, student services trends, sustainability and energy efficiency of campus facilities, human resources and talent management, and compliance with regulations such as Title IX. Beyond knowing the numbers in these areas, they need to understand effective organizational structures, appropriate staffing and funding models, and risk management strategies—and be able to communicate that information effectively.
“A CBO today is valued more as a strategic adviser to the president, the board, and the cabinet,” says Marc Mathews, vice president for finance and business at Transylvania University, Lexington, Ky. “There’s no realm I’m not called into, sometimes just to listen and think about the implications on the institution’s finances, or more specifically to figure out how to accomplish a goal.
“My responsibility is to advance those goals so they are heard about and viewed on an institutionwide basis,” Mathews continues. “Then we can come up with the best resolution possible for the institution.”
It’s a tall order. And it can’t be fulfilled working alone or within only the finance organization. Chief business officers see collaboration, especially within the cabinet, as critical to facilitating and guiding the decisions that will ultimately shape their institutions’ future.
Following are some examples that show how it can be done.
SANDY R. SABO, Mendota Heights, Minn., covers higher education business issues for Business Officer.