Transcript

The issues of nimbleness and frugality are very important here at the School, as they are in other organizations.

I think the really important thing as I, as the CFO lead the budgeting process, which has a focus on a single year but, obviously, in the context of a five-year planning process, really thinks about, "Well, what are the priorities of the organization?" Because, as you know, we have a lot of smart people here. We have two hundred faculty who have many great ideas for different directions we could go in. And we can't pursue all of those things. It wouldn't make sense to do that. We couldn't even afford to do that.

So it's a matter of putting in place processes and systems to bubble up the best of the ideas. And then having a set of decision making in place, largely through the budgeting process I would say, that allows a full discussion of what these possible opportunities and investments could be. Whether it's in faculty research, whether it's in enhancements to the MBA program. Whether it's new executive courses that we might offer for corporations, or not-for-profit organizations. We can't do all of those things, to the extent that we might want, all at once.

Ultimately, there are a number of us involved in the budget process, led, obviously, by the dean of the School, who ultimately have to weigh these difficult tradeoffs, balancing what's important in the short-term, but very much keeping a long-term perspective, as well. I think that's one of the benefits of being in an organization like this that doesn't have the sort of Wall Street, quarterly-earnings pressure that so many people in this world face.

We do have the privilege of being able to make decisions that are in the long-term best interest of the School. And we have used the concept of "venture capital," or "intellectual venture capital"—investing in different types of experiments, whether they're faculty research projects, or other types of things. And we actually are very supportive of experimentation—small investments, giving a finite amount of funding to particular things, and then seeing how those go, with the opportunity that there may be more funding for those, you know, depending upon what the other opportunities are at that point.

But having discipline in the budgeting system is important. And on the administrative side of the organization, we have tried to keep things very tight. You know, as little growth as possible in many categories of expense around here, with the idea that we really want people constantly to be forced, as managers, to ask themselves the question: What do we have in our budgets today that we don't need to have anymore? There are a lot of things that are in organizations like this that are there because they've been there for years. And, you know, we need to do things differently.