Q&A: Bradley's New CFO On The State Of The University's Finances, And What Lies Ahead
Bradley University was facing significant financial challenges even before the COVID-19 pandemic began. But by taking a cue from corporate America, the university actually slashed its deficit in half last year. And a budget surplus is expected by 2023. So what's happening?
Tim Shelley speaks with Sheryl Cox, Bradley's new chief financial officer:
TIM SHELLEY: Tell me a little bit about yourself. You've not been at Bradley that long. You come to Peoria from the the corporate world?
SHERYL COX: Yeah, absolutely. I've been in my role for about three months. And it is unusual. And I'll just do a shout-out right here that a president of a privately-held university actually looks outside of what we would say typical higher education experience. And we, at Bradley University, have a president who really leads the university into it, let me just say, he's not afraid of change.
And he realizes that higher ed needs to take experiences out of corporate America, private equity, what have you, and be able to relay them to the ever changing environments, specifically right now. And how dynamic our current environment is at Bradley University.
TS: Right now, obviously, with COVID, everything's kind of constantly in this state of flux. And we know, Bradley had some issues financially, even before all this started. So talk to me a little bit about what approach you're bringing in here to address some of that uncertainty.
SC: Because I've worked in many different industries, my advantage that I hope to leverage is that I bring a very different perspective to higher education, creating a sense of urgency and speed to execute. This, coupled with the ability to adapt, and and really pivot to the real time shifts. That, we need today, in our higher education industry,
TS: So one of the things we talked about you bringing is incentive based budgeting, which I guess is used by some other universities as well. So what is that? And how is it different from, maybe, a previous budgeting process?
Under this budget approach, inccentive based budgeting, we truly feel that this is going to be transformative for the entire university.
What this budget approach brings is really, we're taking the academic colleges, and when I say the academic colleges, I'm talking business, engineering, and language arts and sciences. And we refer to them as "revenue centers," with a large portion of the revenue and support costs assigned to them.
This approach is designed to really empower that academic organizations with the benefit of responsibility, greater financial stewardship. They'll have the accountability for contributing to the profitability or the positive impact of the university. And, you know, it creates transparency for the entire university.
So I hope that explains it better. But rather than one collective revenue.bucket, we're spreading it across the various colleges to make them more accountable, improve financial stewardship, and they can also have the ability to increase their own revenue stream, which gives them that creativity that we want to enhance with all of the colleges.
TS: How much did enrollment decline, and how did Bradley cut the deficit right now? How did that all happen?
SC: Each one is is its own separate question here. So really our enrollment over the, I would say the last couple couple years, has really remained relatively flat. We hope to change that moving forward in the future. We really hope to increase our enrollment dramatically.
The second part of of the question I do want to address, is that Bradley truly was prepared for a major deficit going into the pandemic. But it seems that that really did not come to fruition. And let me explain that fact.
Okay, essentially, the $40 million deficit was essentially a projection, as if COVID ceased all operations. Fortunately, at Bradley, we were able to quickly pivot to a hybrid learning experience that included online education. And, in addition, the there were budget reduction efforts that took place to decrease our deficit to less than $10 million, and by the end of 2020, our losses were cut in half, through even further detailed financial planning and cost containment.
So I hope I've addressed some of that. You know, one of the plans that we had for cost containment was we offered a voluntary severance incentive program. And that's just an example of some of the cost containment strategy that we used.
TS: The voluntary separation? How many people took advantage of that?
SC: Last count, I believe it was between 65 and 75 people.
TS: What else can you do then to continue addressing the deficit? It's obviously less than projected, but there's still a deficit. I know, before President Standifird came on board, there was this whole talk about the strategic restructuring of the university. So what's in the works?
SC: That's a great question. A couple things. There are a couple strategic initiatives that we have in place.
One of them is called the administration organization transformation process. That's one I lead. And that's really creating efficiencies and increasing effectiveness throughout the organization.
Prior to the realignment, many departments were fragmented, they were diffused, meaning that functions were duplicated across the various roles in the university, and core unit functions were widely distributed across the campus.
It's important to note that we, during this initiative, we did not cut any positions, and it was not intentional to cut positions. It was really to reorganize the administrative staff so that we are more effective and better utilize utilizing and repurposing our talents.
Can I give you a quick example on this? Let's say for instance, you know, one of the organizations I lead is marketing. So, in addition to the marketing function that I have, maybe 10 people or so involved in we also had marketing functions within our enrollment department, the department that recruits new students. We also had marketing people in our advancement, and that's the department that goes that is responsible for contributions, connecting with alumni. And then we had marketing people amongst academic units as well.
So the essence of this project was really to say, 'Hey, you know, let's make one marketing department so we have we have wider breadth of marketing resources.' And we're more focused.
TS: So you're basically doing that not just in the marketing department, though, but all across the university, like, how can we streamline this?
SC: Exactly, it's the same thing in the finance function. You know, in the academic units, we may have had some financial analysts or, or people having, doing some what we call shadow modeling, financial modeling, a budget to actuals, which truly is duplication of efforts, because we have the resources and in the finance arena, to give you those reports. And then the same thing in human resources. We had recruiters throughout the entire university. Well, let's focus that, so that you have broader breadth in recruiting activities. And that should lower costs, ultimately.
TS: Going back to recruiting, I've talked to President Standifird about this, too. But ultimately, is the plan kind of, 'Let's capitalize on some of our strengths?' Everybody knows Bradley has the Convergence Center for business and engineering. And that's a really big asset on campus.
Is it really kind of trying to market those things to build enrollments and that sort of thing to as the university moves forward? To try to capitalize on those things?
SC: Yeah. There are a number of different initiatives we have going on to identify our strengths. And I'll just kind of give you another broad brush background.
Right now are investing in a strategic planning process. Using our own Dr. Aaron Buschko, who is an incredible faculty member, does this for multimillion dollar companies. He's worked with Caterpillar on their strategic planning.
And we're trying to understand our constituencies better. Students, prospective students, our alumni or community, faculty, administration, staff, and develop a new strategic plan that is aligned with our mission, so that we can deliver the best education and the best experience over the next three to five years. That's one of our key initiatives.
One of our strengths, which may not be known, is that we are very good at recruiting people of color. And I'll just a statistic I was looking at it yesterday that one of our KPIs, key product indicators, is what we used to call it in in corporate America, is what you call what we call deposits.
So students, number one, develop an interest in Bradley, they apply for admission, they get admitted. And then the next step is they deposit money, which is essentially the step before they come during the summer for orientation. So it's a it's a very important KPI for us.
The deposits, when I was looking at just a couple days ago, we are three times the national average on people of color. That is a huge strength for us, and we realize that. So we're investing in a diversity, equity and inclusion executive, hopefully over the next several months. And it's important to us that we're an inclusive community, essential for the continuous development and retention for all students, our alumni. And this is really cool. Our alumni has stepped up to the plate to help us in down this position with resources over the next couple of years. That's incredible.
TS: And we know the students want to know they're coming to an environment that is inclusive of them. And that can be a selling point for university as well. So can you talk to me a little bit about how that might all play in?
SC: Well, you know, we know what's a strength. Our goal is, in this new vice president of diversity, equity and inclusion, is to help us retain this pool of individuals. And when I say retain, you know, it's one thing to recruit. And it's very obvious we have, we're very attractive as a campus for, for this community.
But we want to make sure that they have an incredible experience. And, and that experience is not only for them, minorities, or people of color, or what have you. But it's for everyone to acknowledge. We feel very passionate that those universities who embrace diversity, equity and inclusion are going to thrive in the future. And that's one of our key initiatives.
TS: One final question I forgot to ask earlier, but I had in back of my head. You mentioned enrollment's been flat. The last couple years, I wanted to ask where enrollment is now. And when you talk about increasing enrollment, is there a target you're trying to get to?
SC: We feel like we just say it's been a tough year for all universities under the COVID environment. And we still have continued fallout from the COVID pandemic. There's no doubt about it. Think about this. In the past, we would hold sessions In our ballroom, our alumni ballroom that would hold 250, 300 potential recruits and families. That now is limited to 50. So imagine your recruiting efforts are cut by 80%.
So needless to say, you know, all universities are struggling right now to maintain enrollment, in our minds. So our goal right now, flat is good. We do think this next year, we will be flat or maybe slightly above. But to me, that's not good enough. And I know that's not good enough for the rest of the leadership team.
We want to continue growing that, you know, as a percent. I don't want to throw one out there because I'm afraid that if we don't make it, everyone will be disappointed. But you know, I would hope that we could get at least 5%, a cumulative 5%, over the next several years. That would be great. More would be even better than that.
TS: Sheryl, was there anything else you wanted to add?
SC: I would say the leadership of Bradley is phenomenal right now. I can't say enough about President Standifird and his leadership. I just think we have an incredible team with a mission. And our mission is really to attract more students, recruit more students.
And I feel that we're very fortunate as a university to be in Peoria. How the community rallies around the university is one I would say is out of the normal for most universities. So we feel very blessed. And we feel like we have the foundation to really catapult enrollment in the future. We do. And it's leveraging all our strengths, like I just discussed, which was incentive based budgeting, increasing, alumni and community engagement and keeping our eye on our manageable assets. That's key. We have tremendous endowments, and we intend to be fastidious in in protecting them.
This interview was edited for clarity and length.