The University Record, October 30, 1995

QUESTIONS, ANSWERS ON VCM

With all the uncertainty caused by the presidential search, wouldn't it be better to delay VCM until a new leadership team is in place?

 President Duderstadt and the other officers have restated their commitment to the initiation of VCM next July, and the Regents endorsed this plan again at their October meeting. While change is always difficult, and there are always good reasons to delay change, the officers and the Regents believe that the many prospective benefits that will accompany VCM are too important to be deferred any longer.

The decision to proceed with VCM was based on the judgment that the University could no longer afford to operate in its present mode, where several important costs are no one's responsibility, and where significant revenue opportunities are regularly foregone. We cannot expect to gain control of our costs when indirect costs are not generally perceived as real, and where space (one of our most costly items) often is treated by its occupants as if it were free. Nor can we expect unit leaders to make the right decisions when their budgets have no relationship to their instructional or research loads. VCM will make these costs and opportunities explicit and will put them in the hands of the deans and other key administrators who are in the best position to judge how best to respond to them.

As we contemplate the move to VCM next July, it is important to remember that we are already much farther along the path to VCM than are most of the other major universities that are in various stages of the planning process---Ohio State, Minnesota, UCLA and Illinois, for example. This is primarily because of our long tradition of decentralized decision-making, which currently assigns to deans and other unit administrators much more authority than is commonly the case. Another factor that will ease the transition next July is that several budgetary responsibilities that are key elements of VCM already have been transferred to units during the course of the last decade, and relatively little remains to be done. The point here is not to trivialize the impact of the change to VCM, but only to point out that it will fit the pre-existing structure and culture of Michigan far better than those of most other schools that are planning for VCM.

It also is important to remember that VCM has not been created and crafted by just one or two people in key leadership roles. Rather, it has been shaped by the efforts of a great many people in positions of formal and informal leadership from throughout the University. Similarly, VCM has received the endorsement of many of those who will be responsible for the key decisions regarding resource allocation both during the presidential transition and thereafter. Thus, VCM is not dependent upon a single executive officer but has become a University initiative.

There will be some significant changes that will accompany VCM, but in many cases the impact at the individual level will depend on the way the units "internalize" VCM. Each dean and executive officer will have to make and announce that decision for his or her own unit sometime before next July, and that decision will be of great importance.

VCM is not an automatic pilot, any more than the current system is. There still will be ample room for judgment and decisions as usual. Sometimes those decisions will be wise and sometimes not. In order to monitor the overall impact of VCM and to head off serious problems that might otherwise occur as a result of unduly financially-driven decision making, a new VCM Oversight Committee has been formed, and a variety of other safeguards are being put in place.

The current transition in leadership will attract our attention in the months ahead, and rightly so. At the same time, the vast majority of the work of the University will continue, carried forward by the momentum of this great institution. VCM also has attracted some attention but it is, after all, only a budget system, and we should not let it take on an undue importance. It will impose some changes; it will alter some aspects of each unit's budget, but the great work of the University will roll on, largely unaffected.