If you’re the type to be easily outraged, Berkeley certainly provides plenty of fodder. If you’re on one side of Berkeley’s distinct political spectrum, the new downtown plan is cause for clamor. On the other side, shake your head in despair at the city council’s decision to adhere to UN treaties.
Today’s news brings something at which I suspect everyone in Berkeley can be outraged. The University of California Berkeley has agreed to pay consultants Bain & Co $3 million over two years to advise on new ways to save money.
The Bain engagement is part of a project to “reduce costs and streamline operations” the university is dubbing Operational Excellence. Here’s what chancellor Robert Birgeneau had to say:
We chose to engage an outside consulting firm after assessing several other options and realizing that we need this support to complete the evaluation. This particular firm, Bain & Company, brings significant experience in examining complex organizations and has recently completed a similar process at the University of North Carolina and will soon do so at Cornell.
Their fresh, objective view, combined with their knowledge of best practices in operations across higher education and other sectors, will serve us well. A working group of campus leaders and key staff will work with the Bain team to carry out the data-gathering and assessment of options…
Undertaking a project of this scope and scale is a full-time endeavor for a full team of professionals and experts. We simply do not have the internal capacity to divert our faculty from their core academic mission to manage a program of this size. More importantly, we recognize that “self-diagnosis” is not always impartial, that fresh ideas from outside our campus may have a role in helping us improve, and that the limited availability of internal resources to spend several months full time on this project would delay both the assessment and any subsequent implementation of opportunities.
I’ve known a lot of Bainies over the years, and they are uniformly bright, diligent and professional. Organizations that face truly complex strategic problems — say, integrating a big acquisition, or developing a new approach to supply chains — would understandably look at Bain, as well as rivals like McKinsey and BCG.
But even with that knowledge, my first reaction was that $3 million for consultants at such a crucial moment for the university is an outrage. How can the university spend money on overpaid consultants when its most precious resource — faculty and staff — are on furlough and seeing cuts all around them? What political consultants call “the optics” are all wrong. I can guarantee that it will have few supporters in the university community.
But $3 million is barely enough to pay Cal’s head football coach for one year (not that I think that’s a good idea). In the context of an organization that spends about $1.8 billion a year, setting aside $3 million for two years is not particularly significant.
If Birgeneau and his administrative colleagues are going to preserve Berkeley as a world center of academic excellence, they are going to need to be equally world-class at finding efficiencies and true savings. There isn’t at present a fantasy world where the state boosts the University of California budget, even though that would be an eminently sensible thing to do. The shortfall can’t be made up by foundation grants, individual donations or commercial wheezes. The increases in tuition are already stretching many families to the breaking point. So savings will have to be found.
Bain & Co aren’t a charity, and it will make a very healthy margin on its work for Berkeley. It would be great if someone would do the necessary work at cost, but I don’t see that happening either. I’ll eagerly follow project Operational Excellence, with only a small knot in my stomach at the thought of what the consultants are being paid. The stakes for one of the world’s great universities are far higher than $3 million.
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