Annual Maintenance Report



Annual Maintenance Report

for AACSB accreditation

2008–2009

Our five-year maintenance of accreditation visit occurred in February 2007. Our peer review team—deans Breeden, Danos, and Cooley from Duke, Dartmouth, and NYU, respectively—focused our attention on some key accomplishments and areas of improvement. This report will detail the school’s progress on the team’s recommendations.

In August 2009 Rich Lyons completed his first year as dean of the Haas School of Business, and one of his significant accomplishments was creating our strategic planning document. The project began in November 2008 when Dean Lyons created faculty sub-groups to examine five topics of strategic relevance: business innovation, international focus, community of scholars, general management concept, and revenue portfolio. In May 2009 Dean Lyons asked the faculty to vote on curricular changes that came out of the subgroups, and faculty support was unanimous.

The strategic plan is built around our commitment to develop leaders, and in particular, innovative leaders. The plan has three components:

1. The leader’s curriculum: Our strategy defines how we develop leaders and how we do so in a differentiated way. We will deliver leaders who are accustomed to rigor in their decisions and perspective, who exercise authority through influence, not command, and who drive commercial value through teams and organizations that put fresh ideas to work—innovate—across the whole business.

2. The Haas campus: We recently completed a master space plan that addresses three game-changing shifts in business education. The first shift is from individual learning to “social” learning. The second shift is from traditional degrees to life-long learning. The third shift is the new, tight link between physical assets and financial model. We have concrete, specific goals that flow from these three imperatives.

3. Intellectual community: Haas needs to be where the best scholars and teachers want to stay and thrive. First and foremost, we need to increase the size of our faculty to better match the smaller faculty-to-student ratios at our peer schools.

For each component, we have developed short-term (1–2 years) and long-term milestones (3–5 years) that are detailed in the strategic plan.

Marketing our strategic priorities and successes is a big priority. We are reframing our identity from simply “Haas” or “the Haas School” to “Berkeley-Haas.” Our connection to UC Berkeley is a huge asset and one we are beginning to assert more deliberately.

The rest of this report discusses specific recommendations from the 2007 reaccreditation.

1. Gaining the ability to charge market-rate fees for our degree programs, as well as to pay competitive market salaries to all faculty.

Of our six degree programs, three are already at market rate (Berkeley-Columbia Executive MBA, Evening/Weekend MBA, and Master in Financial Engineering). Of the other three programs—Undergraduate, Ph.D., and Full-Time MBA—Haas plans to reach market rate in only one, the Full-Time MBA.

In 2007–08 the Regents of the University of California approved our request to increase fees charged to full-time MBA students by 18 percent for three years (subject to annual review). With plans to implement similar increases for two additional years, program fees for the Full-Time MBA program would have reached market rate (less $5,000 for California residents) in 2011–12.

With the significant economic downturn across the nation in 2008 and 2009, and especially within California, those schools whose fee levels are used to define market rates (Harvard, Stanford, Wharton, Michigan, Chicago, Virginia) began slowing their annual increases. As a result, it appeared that we would reach market rates sooner than expected. However, because cuts in State support will result in significant increases in overall student fees (a ~50% increase over the three year period 2008-09 to 2010-11), approval of the final two years of our planned five years of increases is unlikely at this time. Moreover, even though we have been able to raise rates for the past three years, the 50% increase in fees retained by the campus will cut into the net funding generated for the School to build its program.

Despite this lower revenue capture, our commitment to paying market salaries to faculty has not flagged. In 2008–09 Berkeley-Haas inaugurated the Targeted Decoupling Initiative (TDI), a systematic way to retain our best faculty. Unlike our existing Faculty Excellence Program, which allows for off-cycle salary increases only in the presence of an outside offer, the TDI allows Haas to increase salaries preemptively. In 2008–09 nine faculty were successfully admitted into the TDI. In 2009–10 we anticipate putting another six to eight names forward for campus review; roughly one-third of Haas faculty will be included in the TDI in steady state.

Our biggest compensation challenge of 2009–10 will be the campus furlough program, through which our faculty and staff will see salary cuts of 4–10 percent. The Dean’s Office has implemented mitigations for faculty on a case by case basis.

2. Increasing the size of our tenure-track faculty, especially the Operations and Information Technology Management (OITM) faculty.

Increasing the size of our faculty continues to be our number one priority. Despite hard work by faculty and staff alike to fill slots in 2008–09, we hired only five new faculty on July 1, 2009, and lost six, for a net loss of 1.00 FTE. As of the writing of this report, we have three more offers still in play for faculty who could join us on January 1, 2009. All but one of the slots we had in 2008–09 and all eight slots we have in 2009–10 are funded solely by Berkeley-Haas, not by the state. The prospect of large budget cuts led campus officials to preemptively reduce faculty hiring by 75 percent, from 100 slots campus-wide to just 25 in 2008–09, with Berkeley-Haas receiving 1 state slot. In 2009–10 faculty hiring into state-funded slots was frozen, leaving Haas and the Law School as the only two departments that could afford to recruit into non-state–funded slots.

Our biggest recruiting success in 2008–09 was the setting of long-term faculty target sizes for our eight subject groups (Accounting, Marketing, and so forth). This year-long process was highly consultative and took into account demand for courses, benchmarking against competitors, and faculty workload. We expect the target sizes to encourage groups to plan for the long term and to discontinue the “use it or lose it” approach to their annual slot allocations. Our ability to hire into Haas-funded slots also implies that, barring dramatic budget fluctuations (even in the worst state fiscal crisis in recent memory, Haas remains financially stable), we can count on hiring capacity year after year.

Due to very pressing needs in other groups, OITM did not receive a slot during the initial allocations in September 2008. However, the group did evaluate candidates when unused slots became available later in the year. The group decided not to make an offer. The group has authorization to fill one junior slot in 2009-10.

3. Formulating a vision for future uses of technology in education.

The school hired its first Chief Information Officer (CIO) in 2008–09 and established a combined Computing Services and Media Services organization as recommended by the external review of Haas Computing Services in 2007–08.

As a member of the senior management team, the CIO has worked with key department leaders on bridging the gap between overall school objectives, business processes, and technology to form a common vision targeted at the delivery and management of technically enabled solutions.

Over this past year, the renamed Haas Enterprise Computing & Service Management (ECSM) implemented several new technologies:

• iClicker – an audience response system that allow students to instantly provide feedback and answer questions posed by their instructors during lectures.

• Event Management System – enables faculty, students, and staff to easily reserve rooms and media equipment via one portal. In addition, the system’s functionality has enabled significantly better use of our limited number of group study and group meeting rooms.

• Student Portal – web based application that provides a single point of access to critical applications and information sources for students, allowing them to focus on learning rather than searching for information.

• Customer Relationship Management (CRM) – application that manages the relationships we have with our customers, including potential customers. CRM combines business processes, people, and technology.

ECSM also kicked off some new projects for 2009–10, such as a schoolwide master calendar, a student event and clubs management web application, a Flash video server platform, and Cisco’s Telepresence Video Teleconferencing.

4. Increasing private funding for the school’s programs, space, and endowed chairs.

Launched in 2005, the $300 million Campaign for Haas entered its public phase in September 2008 when UC Berkeley hosted a campus-wide campaign celebration event. Haas followed the campus momentum with more than eight leadership dinners and four large-scale kick-off events in key areas where large concentrations of Haas alumni live and work (San Francisco, New York, Los Angeles, and Singapore). In addition, Haas began communicating campaign priorities and successes to its alumni and supporters through quarterly inserts in Cal Business, a new website, and other alumni collateral.

We also continued our routine fund raising, which resulted in several successes:

• Commitment of two new endowed chairs and the addition of $764,000 to an endowed faculty support fund.

• Three-year commitment of $750,000 to fund the Haas Center for Teaching Excellence.

• Establishment of the Shapansky Fellowship Fund with a $2.75 million bequest.

• Addition of $2.6 million toward space needs and capital improvements.

• Creation of a new scholarship fund in entrepreneurship.

• Addition of new faculty fellowship support of $300,000 for two years.

Solicitation in 2009–10 will continue to focus on lead gifts for campaign priorities— new high-tech classrooms and other infrastructure improvements and endowment for faculty, students, and centers. Currently, the School has outstanding solicitations totaling $22 million, with an additional $30+ million in solicitations planned for the coming year.

While we continue to see upward momentum in fundraising—thanks largely to our new dean’s energy and strategic vision—external financial forces continue to dampen donors’ readiness to commit to major gifts. Market conditions also impact Haas endowments, which dropped ~20% from $220 million to $177 million from June 2008 to June 2009.

Finally, in July 2009 we hired a new head of development (Assistant Dean for Development and Alumni Relations). Michelle McClellan is an accomplished fund raiser who most recently led a $500 million campaign for the California Academy of Sciences in Golden Gate Park.

5. Expanding our facilities to alleviate crowding, as well as building more team rooms and places for student interaction.

In 2008–09 we completed the first phase of a Master Space Plan for the school, which confirmed the need for 40,000–60,000 additional square feet for the size of our programs, desired faculty, and aspirations to be a top-five business school. We also rented an additional 10,000 sf in downtown Berkeley, bringing our total to 20,000 sf in offsite space.

In December 2009 we will complete a new high-tech, 70-seat, tiered classroom with two breakout rooms. This interactive learning center replaces a 50-seat flat classroom, and the breakout rooms may be used for behavioral research projects by faculty. We are also adding four designated group study areas in the library in fall 2009. Finally, we will complete feasibility, phasing, and design plans to implement several of the Master Plan options. This will likely include three to four new classrooms, a renovated courtyard, additional research space, a renovated library/computing center, additional event space, and converting individual offices into ‘hoteling’ spaces for staff, professional faculty, and possibly PhD students who are not at Haas five days a week.

6. Growing executive education and building a residential facility.

The Center for Executive Education (CEE) achieved $9.7 million in revenue and $1.4 million in profit in 2008–09. The decline from $11.2 million revenue in 2007–08 was due to the global economic downturn. Program revenue continues to be 75 percent custom work and 25 percent open enrollment. Open enrollment programs have grown to reflect our Silicon Valley client base and include new offerings such as the Cleantech Institute, Cleantech Investment in India, and Nonprofit Directors Program.

CEE has a staff of 15 and recently moved off campus to downtown Berkeley facilities. CEE is pursuing two major strategic projects in 2009–10. The first is the formation of a 501(c)3 to allow CEE increased operating flexibility, which we feel is essential to stay competitive as well as continue to grow. The second is the construction of a hotel and executive education facility in downtown Berkeley. Our goal is to select a developer and begin construction in the next 12–18 months.

7. Monitoring our heavy use of nonladder faculty and including these valued faculty in our strategic plan. In addition, increasing contact between nonladder and ladder faculty would benefit all.

Haas has now formalized a breakfast each semester for professional (nonladder) faculty and monthly email updates from the Dean and the Senior Assistant Dean for Instruction targeted directly to professional faculty. Professional faculty members now sit with ladder faculty on all of the School’s academic degree program committees.

Haas has also launched its new Center for Teaching Excellence (referred to in our previous update as the Center for Faculty Development). CTE promotes teaching excellence, fosters a teaching culture, and works with professional and ladder faculty to deliver the highest quality instruction in the classroom. A new three-day orientation session, presented annually in late July, introduces new instructors to teaching at Haas. Instructors meet colleagues and department chairs, attend career development sessions, and take tours of Haas and Cal. In addition, CTE provides individual coaching as well as the Excellence Exchange Program which provides Haas faculty an opportunity to share course materials; work collaboratively to improve teaching; and learn about Haas culture, norms, and expectations. The program pairs faculty members from the same or similar disciplines (e.g., economics and finance) with varied experience, interests, and expertise. Throughout the year, CTE hosts seminars to communicate best practices, discuss innovative approaches to teaching, and provide forums for faculty to explore topics in teaching with other colleagues. Topics for these events are developed in response to faculty needs and feedback.

8. Putting more effort into global programs to match UC Berkeley’s global reputation and the initiatives of other top business schools.

Haas is doubling the size of its popular and innovative International Business Development (IBD) program, which sends teams of MBA students to work as consultants to real businesses in other countries. In addition, the ladder faculty’s Business and Public Policy (BPP) group is proposing a new center for Political Economy that will focus on the impact of different institutional environments on global business organization (for example, the effects of different political structures, regulatory regimes, intellectual property laws). BPP is also going to be developing a set of new courses drawing on this research.

9. Improving our faculty-dominated and rules-based governance structure to save costs and increase agility.

Although faculty governance is still alive and well at Berkeley-Haas, the school culture is gradually giving more flexibility to the Dean’s Office. In 2008–09 the Dean, for the first time, allocated recruiting slots to faculty groups. The Dean also set long-term target sizes for each group. Both processes were highly consultative.

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