Destroying the University to Save the University

A long and rancorous effort to do away with tenure and run itself more like a business has set the University of Minnesota back for years to come.

On the surface, this might appear to be mere fiscal prudence on the part of a top administrator. In practice, it was more complicated and risky. By earning (mostly federal) research grants and contributing a portion of their private-practice income, faculty members actually were generating more revenue for AHC operations than was provided through state funding in 1994. By attacking tenure, Brody took the chance of alienating some of the cash cows in his beleaguered realm of the University.

By the spring of 1995, the bureaucratic machinations necessary to implement Brody's plans were underway. On May 11, according to the minutes of the University's Board of Regents meeting, "Regent [Jean] Keffeler noted she would like to review the information available on faculty productivity and engage in an in-depth discussion about tenure issues, including academic freedom." Many faculty members believe that Keffeler, herself a management consultant, was in cahoots with Brody at the time. She flatly denies it, claiming that in her six years on the board, the tenure code had never been seriously reviewed and was overdue for discussion.

A month later, on June 12, Brody announced the formation of the Quality Re-engineering and Technology Committee (QRTC), composed of himself and a member from each of the seven schools under the aegis of the AHC--people chosen, Brody said, for their talents as "broad thinkers." He added that QRTC members would be working full time on the committee, and that its purpose was nothing less than the radical reinvention of the Academic Health Center. In designing a totally new structure, Brody said, the committee couldn't look to other academic health centers for guidance because of the uniquely large market penetration of managed-care medicine in the Twin Cities. He suggested that the QRTC instead study how corporations had reorganized to meet market challenges. In that way, the provost said, the AHC could learn the critical importance of being "the best in the eyes of our customers, not our competitors."

Within a few days of Brody's announcement, the QRTC embarked on its first order of business: hiring consultants to guide it through the re-engineering process. There was never any doubt about its choice. One of three reference books given to committee members by Brody was Reengineering The Corporation: A Manifesto for Business Revolution, by Michael Hammer and James Champy. Those who bothered to read it couldn't help noticing that the jargon in the book reflected Brody's own language, such as his emphasis on the word "radical" and the notion of "starting with a blank piece of paper." Even those who didn't read it would have had little difficulty gleaning that Jim Champy was both co-author of the book and co-founder of one of the firms applying to become the QRTC's consultant.

Whether QRTC members were aware of it or not, Brody and Champy knew each other, having served together on the Massachusetts Institute of Technology's board of governors. Each man had a lot to gain from a high-profile re-engineering of the AHC. Brody needed to establish himself as a bold administrator in order to foster his ambitious career goals (and in that respect he succeeded, accepting an offer to become president of Johns Hopkins after less than two years at Minnesota). For Champy, it was a chance to be in the vanguard of a lucrative new market niche. Management consultants had been all the rage of the business world over the previous 15 to 20 years, but by the mid-'90s, in the wake of mergers, global trade agreements, and downsizing trends, almost every major corporation had some version of a retooling program underway.

Academia, however, was virgin territory. And with HMO-style medical constraints gradually sweeping the country, other prominent universities with hospitals for teaching and research would soon be confronting financial upheavals similar to the University of Minnesota's. When Champy gave his "people in organizations like to be told what to do" speech at the leadership retreat in July, Brody pointedly noted that this hot consultant with a book on the New York Times bestseller list was dispensing his wisdom pro bono. In reality, it was the pitch that helped to close a big sale: The next month, Champy's CSC Index was signed to the first of three contracts totalling millions of dollars.

Meanwhile, Brody and the Board of Regents continued to push hard for changes in the tenure code that would give faculty less job security. In his inaugural speech upon becoming chair of the board, regent Tom Reagan stated, "We may have to make programmatic cuts or take a fresh look at policies such as tenure." On Sept. 8, Brody went to the regents and asked that the board assist the re-engineering process by considering "modifications to governance and tenure to achieve the goals of the AHC." The regents not only agreed to help, but asked Brody and Hasselmo to "advise the board at the earliest possible point of the kinds of changes that would facilitate what the Academic Health Center is trying to accomplish."

Two weeks later, at the first "town meeting" of the QRTC, committee member Leo Furcht told more than 300 AHC faculty and staff that "tenure is constraining our flexibility and ability to change." Audience evaluation cards indicate that the message was received with a high degree of anxiety and concern about AHC priorities. "Where do the academic units fit? Rarely is education mentioned... " wrote one. "It continues to feel like the focus is NOT on the 'A' in AHC," echoed another. Others wanted to know, "How will people be treated in reaching the vision?" and "What's the cost of re-engineering (productivity, faculty and staff losses, morale) no matter how necessary it is?" One exasperated audience member wrote, "The environment is getting so poisoned that we need to start getting some answers before we all go crazy!"

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