A businessman leads a university with incentives in mind

A businessman leads a university with incentives in mind

A businessman leads a university with incentives in mind

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James M. Danko, president of Butler University, spent two decades in the business world before going into higher education. In a recent conversation with The Chronicle, he talked about how higher education could be entrepreneurial, innovative, open to change, and better at conveying the value of its "product" to students and parents.

TRANSCRIPT

SCOTT CARSLON: Jim Danko, from Butler University, thanks for coming to the Chronicle.

JAMES DANKO: Great ? thanks, great being here.

MR. CARSLON: So you spent two decades as an entrepreneur and businessman before you entered higher ed.

MR. DANKO: Yes.

MR. CARSLON: Why did you make that transition, first of all, and what did you feel like you were bringing to higher ed that was needed or necessary coming out of the business world?

MR. DANKO: Well you know, when I sold my company, which I was ? I started a business when I was 19. I'm not sure at age 19 that you have it all figured out so it's always interesting when I think about our own students and where I was at that ? at that age.

But I always was interested in the academic world. Even as I was running my business and it was growing, I found myself going back for evening courses. I ended up actually finishing my degree in the evening. Went back for an MBA program ? or at least started an MBA program. So I always found the world of higher education very interesting and compelling. And there was something attractive to me about it.

And when I decided finally that I wanted to get a full-time MBA and I ended up selling my company, I wanted to go to a top program. I didn't ? not sure exactly what that meant, although I did do my research. I ended up at the University of Michigan. And during my first summer there, I ended up getting hired by the business school to do some research work. And I really got pulled into and haven't looked back.

In terms of what I feel I've added, I've always had a very strong customer-oriented perspective in my time in business. And that was one of those things I think drove me in terms of my first reaction to how do you help students in a better way? How do you provide better services to students ? whether it's career services or even the processes of a university?

MR. CARSLON: Now, people in recent years have been talking about how higher education has to be more entrepreneurial. So as someone who's been in that world, what do you think that means and where do you think higher education needs to go ? what does it need to do?

MR. DANKO: Well, a complex ? certainly a complex question. And there's a variety of ways to approach it. I mean, the way I first start with it, it really does start with innovation. And I know that word is overused, but the reality is we are living in really complex and changing times. And you have to adapt to the realities that we see today versus even five, 10 years ago. So that means you have to be open to change. To me, that's innovation.

So you have to put systems in place and motivations in place to allow people to want to be involved in that change. You know, the one thing you see ? and, again, it's not just in the academic world ? is there is a reluctance to change. People get secure in whatever position they might be in. So you have to show that there is some value to making that change. It's good for the individual. It's good for the larger organization. And ?

MR. CARSLON: But you don't ? you don't think that academia is more resistant to change than other organizations?

MR. DANKO: Oh, I would say they are, absolutely. I do think that there's built-in, systematic things ? even going back to what academicians do and our faculty do ? this sense of skepticism toward change which is, again, is the ? is a healthy thing that drives, I would say, research and knowledge and so forth. But it also could become an obstacle in terms of being resistant to that change. So it takes ? it might take a longer period of time to bring that change about. And you might have to come up with more arguments for your case.

And you don't have the same motivations. If I ? if I'm in a ? if I was in my own business, I mean, I could ? you have the ability to change product lines, personnel, locations. I mean, you don't do that as swiftly in the academic world. So change is just inherently going to be a slower process. So the real challenge ? and to me, you know, why somebody like myself would be interested in this ? I find it so fascinating and such a great puzzle in some respects.

How do you bring about change in such complex times, you know, in institutional ? and you've got these institutional factors that really are obstacles in a lot of ways. But we have to. We have no choice. The economic pressures are real. All the external pressures and even the negative marketing in some respects that's kind of thrown at us ? whether we're overpriced or obsolete and all of that ? you know, it's not that simple.

So we have to put together arguments and cases of why we are adding considerable value, why it's worth the price that there is, why students should invest in their education and to the future. So those are all things that are calling for a ? really, a strong change management abilities and hopefully abilities to lead us to a different place, or be open to approaches that we might have resisted in the past.

MR. DANKO: So do you feel like higher ed then needs the ability to be more flexible? Does it need to sort of loosen the sort of traditional bonds that are in higher education to allow it to, you know, change up personnel more quickly or change up location more quickly or change up programs more quickly?

MR. CARSLON: We absolutely have to be more flexible. The way I have talked about it at Butler, we've been a very, very strong undergrad, residential institution for many years. And we need to preserve that. But just like in other industries, we need to ? we need to be more multidimensional, right? So in other industries you would say, well, they've got new product lines, right? And so they've got their core product, perhaps, and they're adding different products again.

I know that could be sensitive language, but the reality is we need to keep our core undergrad residential experience, but we also need to be open to some online education, non- degree programs, different markets. Maybe it's not always just the 18-to-22-year old market. So our entire industry needs to be open to those ? to those types of changes. There's just no doubt about it.

In terms of those factors that might become barriers to those change, you first cited personnel. You know, I think that that gets overplayed a bit. I've been in ? I've talked to people that run businesses, I've been in business before, it's not that easy. It's not like you ? overnight you're swapping out, you know, different people, right? I mean, I really have found that the majority of people working for you, they want to associate with a winner. They want to be associated with a culture and an organization that they enjoy being at.

And that's one thing I have found in our faculty, I found in faculty in other institutions. The majority of them really embrace where they're at, they just might want to be a little bit more vocal about what they think it should be. So your challenge, really, in leading an organization ? whether it's a dean, a president, a director ? is to ? is to show how this is really bringing out positive change overall. And it's not as easy, maybe, as it was in a small business that I ran but it sure makes for an interesting career in terms of how you adapt those skills to a more complex puzzle.

MR. CARSLON: And to change higher ed, do you also think that higher ed needs to, maybe, change up its incentive ? incentives a little bit, to change the incentives and how people (inaudible)

MR. DANKO: I actually ? I think it has to change ? the incentives that I'm interested is changing particularly at maybe the smaller unit level or the college level, right? And so you have to have some motivation for different segments of your university to want to pursue opportunity, right? I think there is ? there is a tension already between them and us. The administration, you know, they're just doing this because it's going to benefit them. So first you got to figure out a way to bring those barriers down.

But then you have to say: Listen, let's go down this path, whatever it might be. We've got an opportunity for this new degree program. And it's not just a matter of saying, listening, you in this department, you've got to make this happen. You've got to say here's what's going to happen, here's how it works. If this works out successfully, there's going to be additional resources that are going to flow in as a result. We want to make sure that you share in those resources in some way, that they benefit your department.

It doesn't necessarily mean that you're putting a compensation scheme in for a particular faculty member to get more. No, what you're saying is we want your department to have more resources. You know, the currency in the academic world in a lot of places is number of faculty (lines ?) for example, right? So if a department ? you know, they want to bring in some higher- end researcher, or they want to bring in some new teacher, you want to be able to show, OK, if we go down this path with this program, if these resources flow the way we predict they will, we want you to share in that.

And so to that end, I've actually ? we're working on a comprehensive overhaul of our financial system to make sure we could identify how different areas of our university are doing so that when we go down new paths and add perhaps different programs, we have a better sense of what those things are really returning and how that might translate into additional resources, right? So, yes, I think every organization needs some sense of incentive, whether it's at the personal level.

Another incentive, frankly, faculty are no different than any of us. You know, I've had a career that's had things that I've changed, institutions, I've changed industries. Everybody is like that. So what might play to an individual faculty person's desire? They might be at a point in their career that they're interested in something different.

That's where I think the innovation comes in, when you talk about, hey, here's something new we're doing in innovation or here's ? you know, online education, or here's something different we're doing organizationally. Would you like to participate in that? And I find a lot are very interested in that opportunity, so.

MR. CARSLON: Are you concerned that that kind of system ? those incentives would create a system of winners and losers?

MR. DANKO: I really don't. I mean, at the end of the day, in ? I don't think we should be, you know, portraying winners and losers as good and bad or evil and so forth ? isn't necessarily the right way to think about it. The reality is, even in our industry there are going to be winners and losers. The economic realities, the pressure that we now have in terms of serving our students in a ? in a different way are going to make it very likely that there's going to be some colleges and universities that no longer have a market.

So by the nature of it, there are going to be people that are going to do better than others, right? So whether you call that winners, losers, good, evil as some might want to portray it. I guess I don't look at it necessarily that way. I actually think that what you're doing is you're opening up more opportunities. So what I look at is more the opportunity side. So a department, a college, a university might have expanded their range of opportunities for that university for those individuals and other places might.

MR. CARSLON: Well, thanks, Jim, so much for showing up. MR. DANKO: OK. Good. Thank you very much for your time. (END)

Video and editing by Julia Schmalz