November 4, 2004 Steve Relyea

1. November 4, 2004 Steve Relyea College and University Performance Summit Implementing a Performance Management System in Higher Education

2. The Issues The San Diego Situation The Approach Results & Lessons Learned Overview

3. Inadequate Infrastructure Support Expanding Scrutiny of Costs Conflicting Performance Data Pressure to Expand Services Quality of Service Issues Issues ConfrontingColleges & Universities

4. All Students: 22K Applications: 41K Enrolled: 3.5K Average GPA: 4.00 SAT: 1,320 >70%: Advanced Degrees Background on UCSD

5. Annual Budget: $1.9B 3rd Largest Employer Mo. Payroll: $62M $710M Invested Locally >53K jobs in San Diego Background on UCSD

6. 1 Johns Hopkins University 2 University of Washington 3 University of Michigan 4 Stanford University 5 University of Pennsylvania 6 UCLA 7UC San Diego 8 Columbia University 9 University of Wisconsin-Madison 10 Harvard University An Emphasis on Research Source: NSF 2004

7. One of the Youngest of the UC Campuses Organized through Residential Colleges Emphasis on Oceanography, Medicine, Pacific Studies, Technology Background on UCSD

8. Sustaining Excellence of Academic Programs With Limited Resources The Problem

9. Vision for University Operations “To support the University’s research, teaching, patient care and community… by delivering superior service to our customers in a responsive and cost-effective manner.”

10. Financial Perspective How do we look to resource providers? Customer Perspective Internal Process Perspective How do customers see us? Are we productive and effective? Innovation & Learning Perspective How do our employees feel? The Balanced Scorecard Source: Kaplan and Norton

11. UCSD Business Framework UCSD Mission Excellence in Teaching, Research & Patient Care Financial Perspective If we succeed, how will we look to our financialstakeholders Customer Perspective To achieve our vision, how must we look to our customers Process Perspective To satisfy our customers, financial stakeholders, and mission, what business processes must we excel at? People Perspective To achieve our vision, how must our people learn, communicate, and work together? UC San Diego Source: Kaplan and Norton

12. Within limited resources, maintain the most critical support services that will sustain the excellence of the University’s academic and clinical programs. Simplify procedures and reduce workload for academic and clinical departments. Provide our customers with intuitive and flexible tools so they can be successful. Strategic Game Plan

13. Reduce cycle time and improve the performance of our essential support services to students, faculty, and staff. Provide appropriate development opportunities for University staff. Enhance the University’s system of financial controls so we maintain the public trust of our stewardship of campus resources. Strategic Game Plan

14. Disseminate, promote, and put into action UC San Diego’s Principles of Community. Enhance methods of communicating with our key customers. In the area of technology, migrate the campus to a set of standard protocols and tools that will allow for improved customer support in the future. Strategic Game Plan

15. Mission, Values, And Vision A Framework For Translating Mission into Outcomes Strategy Our game plan Balanced Scorecard Implementation & focus Strategic Initiatives What we need to do Personal Objectives What managers and staff need to do Strategic Outcomes Satisfied Stakeholders Motivated Workforce Delighted Customers Effective Processes UC San Diego Source: Kaplan & Norton

16. 2002/03 2001/02 2000/01 1999/00 Business Unit 1 Excess Revenues as a Percent of Net Revenues Excess Revenue $42,463 $71,844 ($4,544) ($15,180) Net Revenue $918,285 $848,649 $686,223 $674,541 Percentage 4.62% 8.47% -0.66% -2.25% Accumulated Earnings $46,144 $4,260 ($53,601) ($47,726) Total Assets Turnover Net Revenue $918,285 $848,649 $686,223 $674,541 Total Assets $157,420 $57,151 $56,980 $71,689 Ratio 5.83 14.85 12.04 9.41 Business Unit 2 Excess Revenues as a Percent of Net Revenues Excess Revenue $35,262 $51,162 $93,827 $14,578 Net Revenue $928,400 $852,679 $700,137 $808,994 Percentage 3.80% 6.00% 13.40% 1.80% Accumulated Earnings $366,354 $308,429 $229,592 $136,625 Total Assets Turnover Net Revenue $928,400 $852,679 $700,167 $808,994 Total Assets $473,300 $401,305 $323,886 $210,410 Ratio 1.96 2.12 2.16 3.84 The Balanced Scorecard: Financial Perspective

17. Benefits UCSD CUSTOMER SATISFACTION SURVEY: 1994 - 1997 - 1999 2 Box Ratio Percentage Evaluating: 1999 = 60 1997 = 60 1994 = 53 N = 354 for 1999 372 for 1997 333 for 1994 Top/Bottom 2-Box Ratio 99': 8.3 8.2 3.6 4.3 6.8 4.6 15.8 10.2 6.7 97': 5.0 4.5 2.6 3.1 3.7 3.2 5.3 5.3 3.5 94': 2.2 2.6 1.3 1.8 1.9 1.1 2.4 3.0 1.6 Satisfaction Mean Score Overall % 22.6 Extremely 43.9 Very 25.5 Somewhat Attributes 6.6 Not Very 1.4 Not At All Overall Rating

18. The Balanced Scorecard: Internal Process Perspective Similar Campuses National Cohorts UCSD

19. The Balanced Scorecard: Innovation & Learning Perspective Mean Scores Workplace Characteristics

20. JUNE - JULY Report Benchmarking and Customer Service Survey Data JULY - SEPTEMBER Develop Strategic Plan and Organization Goals APRIL - MAY Collect Results of Benchmarking and Customer Satisfaction Survey AUGUST - SEPTEMBER - Performance Reviews - Identify Individual Goals - Make Merit Increase Decisions FEBRUARY - APRIL - Submit Benchmarking Data - Conduct Customer Satisfaction Survey SEPTEMBER - OCTOBER - Implement Merit Increase - Develop Departmental Action Plans to Achieve Goals DECEMBER - JANUARY Develop Benchmarking Data OCTOBER -DECEMBER Implement Employee Recognition Program NOVEMBER -DECEMBER Develop and Forward Annual Report To Vice Chancellor The BSC Becomes a Foundation of Strategy

21. Strategy Map: Benefits Unit Benefits Service Delivery Strategy Deliver cost effective benefits Services that are valued by our customers Implement New Technology Invest in Additional Staffing Resource Issues Improve Perception of Responsiveness Improve Perception of Quality Of Advice Customer Perspective Redesign Organizational Structure Change Telephone Triage System Evaluate Methods To Reduce Cycle Time Internal Processes Team Building Program Leadership Development Enhance Skills Of Staff Learning & Growth UC San Diego Source: Kaplan and Norton

22. Strategic Components Opportunity Assessment Customer Perspective Innovation & Learning Process Perspective Change Numeric Goals Financial Perspective Actuals & Ratings

23. Increased Productivity Reduction in Costs Understanding Customer Needs What Have Been the Results?

24. Background Target - Generate $1,000,000 Increased non-student revenue Reduced costs Over a period of 5 years Outcome $891,189 within 2 years Exceeded goal 3rd year Million Dollar Challenge Program

25. Background Direct purchase Direct contracting of installation Team project Outcome 5-year savings : $1,121,000 Carpet Procurement Program

26. Custodial - Conditions in 1994 • Low Productivity • High Cleaning Costs • Low Customer Satisfaction Customer Satisfaction Costs/sq ft .94 cents

27. Productivity Increases Reduced Cleaning Costs- $560,000 Increased Customer Satisfaction Custodial - Results in 2002 Customer Satisfaction Costs/sq ft .84 cents

28. High Level of Errors Average Cycle Time Over 20 Days Low Customer Satisfaction Travel Reimbursement--1996 Customer Satisfaction

29. Error Level Reduced Cycle Time Down From 20 to 3 Days Customer Satisfaction Improved Travel Reimbursement--2002 Customer Satisfaction

30. Paper-Based Update Process Paper-Based Time Reporting Process 50% Transaction Error Rate Inadequate Communication with Customers Payroll -- Conditions in 1995

31. Payroll -- Results in 2002 • Distributed Processes Implemented • Error Rate Reduced from 50% to <5% • Work Teams Established • Phone Triage Process Implemented • Customer Satisfaction Excellent

32. Difficult Data Extraction Process Paper-Based Financial Reporting Process Inadequate Functional Training Inadequate Communication with Customers Finance -- Conditions in 1995

33. Financial Link Implemented Financial Link Improved New Phone Triage Process Implemented Revised and Improved Training Delivered Customer Satisfaction Ratings Excellent Finance -- Results in 2002

34. Community Stakeholders

35. It keeps an organization’s focus on what is important It is sustainable over the long-run It is explainable to your people It provides a context for decision making Why Use a Performance Management System in a College or University?

36. Efforts and planning are aligned with customer priorities It is a great way to evaluate changes to key processes It builds habits of balance, continuous improvement, and accountability to constituents Why Use a Performance Management System in a College or University?

37. Lessons Learned:Things That Can Go Wrong Poor Data Quality Lack of Participation in Measurement Development A Culture that Values Complexity No Linkage to Mission & Strategy One-Size-Fits-All Approach

38. Lessons Learned:Critical for Success Leadership Commitment Assessment Will Influence Behavior Results Influence Rewards Results Form Context for Planning Communicate Results

39. College and University Performance Summit Thank You