by Henry S. Bienen, President of Northwestern University
Tuesday, March 28, 1995
Good morning, and thank you very much for that warm welcome. I am pleased to be invited to speak with you. "The State of the University" is an august title, very presidential indeed. I don't know that I want to give an address so much as to have a chat with you.
I inherited a university that was in very sound shape. As I think everybody knows, this is not going to be an easy decade for higher education. We're facing strong pressures from federal and state budgets; anybody who reads the paper knows that. We're at risk in what will come out of Congress, and all those things put pressures on our budgets. But, that said, Northwestern is, relative to almost any major university, in good financial shape.
I stress that, and I begin with a statement about finances, not because I think a university is all about balancing a budget or having a good bottom line; that's not what a university is about. A university has grander and more exalted aims and functions, having to do with the development and dissemination of knowledge and creativity across a wide range of human activity. But if our financial house is not in order, we cannot do anything else; we simply will be paralyzed as an institution.
Many great universities are struggling mightily today to put their houses in order; they have major structural deficits in their budgets, which makes it very hard for them to do new and innovative things. Northwestern is privileged that it has had very sound financial management. I personally am in the debt of my predecessor, now Chancellor Arnold R. Weber, and of Senior Vice President C. William Fischer and Provost David H. Cohen. As many of you know, Provost Cohen has decided to accept an appointment as vice president of arts and sciences at Columbia University. I personally regret that, because we've become good friends and I've enjoyed working with him these past months. So I pay a personal tribute to David Cohen for the wonderful service he's rendered Northwestern for more than nine years as provost and, previous to that, as graduate dean and vice president for research. We're very lucky that he has been here.
I'm fortunate to have inherited an institution that not only is in good financial shape but that has one of the most systematic processes I've seen for evaluating its budget, for making decisions across schools and departments over time. A university is a truly special institution; we are, in many ways, an institution that favors the future over the present. We do that in the very notion of building endowments, whereby we say we're going to raise and preserve funds for the future. The Board of Trustees sets a spending rule that says Northwestern will spend no more than 4 or so percent of interest income off the principal. That is a favoring of the future; we say we want to preserve capital for future generations.
But we're also an institution that looks to the past, to our alumni, to our traditions. For all universities, their pasts are critical in forming a present and looking to the future. We don't try to be like some other institution; we try to be the best Northwestern we can be, building on our own unique concerns and traditions.
Northwestern has another feature that while not necessarily unique, is unusual in its comprehensiveness. I refer to program review, whereby we evaluate ourselves in a systematic way to look at our strengths and weaknesses.
No university is without weaknesses. All universities, when you get to know them well from the inside, have an unevenness about them, a spottiness across departments and across schools.
I'm not going to say where I think the specific strengths and weaknesses of Northwestern are by school or department, but I do say that what we want to do, and what I came here to do, was to build on the strong base we have in order to make this a greater university. That's what motivates me, and all the decisions I make, with respect to budgets, new investments, preservation of infrastructure, are aimed at one thing: to make this a stronger place. I didn't come here to mark time or tread water but to try to help, not by myself, but with all your help, to build this institution.
I'm persuaded so far, in terms of the immediate senior staff with whom I work, the vice presidents, deans, provost, associate provosts, that this is a very strong group. I'm also persuaded, as I've talked with Guy Miller and Bill Fischer, of the strength we have in our exempt and nonexempt staff. This strength permeates the whole university and reflects a strong commitment from many people. I'm very grateful for that. No president, no individual, can by herself or himself make a University great; it's really a joint, collaborative effort. A university is a special community. Of course, we all worry about the terms of our pay and benefits, but in a university we're also concerned with larger goals. That's what makes this a special place. I think that's what motivates many of us as we come to work at Northwestern.
Let me mention a few interesting facts for you to keep in mind for the future.
Northwestern's student selectivity, our ability to attract ever-stronger students, is quite clear. This year alone, we went up about 16 points on the average SAT scores of students applying to Northwestern. We've also recently gone through a demographic trough, so the pool of young people applying to universities is a strong one. Approximately 13, 000 students applied for the next freshmen class at Northwestern. That large pool allows us to be very selective as we pick a strong class, and we're very happy for that.
I don't have an arbitrary view that SAT scores, or any scores give us a perfect purchase on the worth of young people, not at all. Standardized test scores are a very rough proxy measure of improvement in our selectivity. But when we attract the class, we attract a group that is diverse by background, by ethnicity, by race, by socioeconomic class, by special abilities in athletics and music; we look for many qualities in students. And the measurement of whether we have done a good job, as a teaching university, will take place many years from now with respect to the class that enters.
I measure our success by the quality of the individuals we produce, a quality that has to do with what kind of community service they render in the world, what kind of citizens they are, whether they're exciting people, whether they make an impact in science and the arts, in all the ways we think about human quality and excellence.
College Board scores are just one very rough predictor of those qualities. But the increase in the strength of our students represents an increase in the quality of the University, of its faculty, staff, and all the things that make Northwestern tick over time.
Research levels have also been going up. Last year the dollar volume of the University's research awards rose almost 9 percent, to $169 million; that's a very credible research effort.
At the same time, other major universities simply generate much higher volumes of research relative to institutional size. We've moved up in the life sciences and the Medical School, which, along with engineering, drive the great volume of our research. But we're not on a par with the University of Washington or Harvard; these are places that simply generate much larger volumes of research. And this is an awkward time. I frankly don't know what the equilibrium point is going to be because we're trying to move Northwestern forward, to generate significant research at a time when as I've suggested earlier, research funding is going to be very flat.
That means we're going to have to be cost-efficient about what we do. We're going to have to look very hard all the time at the kind of cost-sharing the federal government increasingly asks us to do. When we make a proposal in, say, materials science or high-energy physics, the federal government, whether through the National Science Foundation or another funding agency, increasingly asks us to put up a larger share of funds. We have to be very careful about our research investments and plan them strategically.
We've done an excellent job over time in maintaining the physical plant and infrastructure of Northwestern. Other universities have encountered great difficulties because they've postponed those investments, in the same way cities have postponed their investments, so their infrastructure has declined. Now they're facing hundreds of millions of dollars in past bills to get their infrastructure up to snuff. We haven't had that disability, but maintaining infrastructure is a very expensive thing to do. Not maintaining infrastructure is even more expensive in the long run.
We have strategic decisions to make about one of the most critical areas a university can invest in, our information technology. We're very lucky to have Vice President Mort Rahimi here; he's done a splendid job in taking Northwestern from what frankly was a somewhat lagging base and putting it in the first rank of strategic thinking about investment in information technology. Information technology is a very expensive thing for us to acquire, keep up, and make thoughtful investments in. We have to budget for it in a different way than we have heretofore. As Mort and others and I have discussed, we have to think about investments in information technology as recurrent expenses so we don't get hit unexpectedly by big new costs. These are going to be built into our budgets.
At the same time, and this is a problem for not just universities but for all modern institutions, while we're making capital investments in information technology, we in many places use old modes for handling personnel and the functions that personnel perform, whether faculty or staff. If we're going to make these big investments in technology, we have to be smarter and reengineer the functions of personnel and the way we all work together and collaborate. Otherwise we are going to break our bank because we're going to be adding capital, adding new costs, without any savings in productivity.
This is a cosmic question, and people who have studied nineteenth- century economic history have told us that it took 50 years to realize all the productivity gains from the Industrial Revolution. We don't have 50 years to wait for the productivity gains from information technology. This is a great new revolution in the ways humans do their business and understand themselves, and we have to get ahead of the curve.
As I said, we start from many advantages at Northwestern. We have a rational budget process and very sound past investments in both human resources and infrastructure. We have an endowment that looks big, but it's not a huge endowment compared with those of many other universities. You can see that in some of the ways we spend from our endowment. Northwestern funds financial aid out of endowment at one of the lowest levels of all major universities: About 2.2 percent of all our financial aid is funded from endowment. At Princeton University where I came from, the figure was more than 20 percent. That was an extreme case of a very wealthy university that had been investing in endowment funds for financial aid, but a lot of other universities are ahead of us. We have to build up our endowment base.
It's my job, with the help of a lot of you, to make sure people understand the University at a time when many don't understand what great universities are all about. The press for universities is not the best today; people focus on the negative, not the positive. I think of the university as absolutely essential, literally and figuratively, for the health, welfare, and creativity of the country. We are the place where new and exciting advanced thinking goes on, across a gamut of human endeavors. But that story isn't always out there, and it's important to get it out there.
If you look at our pay scales for both faculty and staff, they are reasonably competitive. In fact we've moved up in the faculty pay ranks significantly over the last years. We're among the top eight universities in the country with regard to faculty salaries. We're also up there with regard to staff salaries, but we're in a very competitive labor market in Chicago. Coming to the University from where I was, in a small town, far from major urban centers, it's a different ball game. We have to think about how we're going to be competitive and at the same time be selective and not break our bank.
As I look to the future I see a number of major issues on our plate. They're my major issues, but I think they're going to be the major issues for many of you as well.
I've mentioned that we have invested reasonably well in infrastructure, but we have some major new capital investments, in buildings, that we're going to have to consider. One of them concerns what we do in our downtown campus. There's a whole new complex being built by Northwestern Memorial Hospital; we may inherit some buildings, and we will have to renovate other buildings. That's a very large price tag, and we have to do serious master planning, for both the downtown campus and the Evanston campus. I've asked Associate Provost Jeremy Wilson, Bill Fischer, and others of my staff to become engaged in master planning for the two campuses. I think that's going to be a very significant endeavor, for my presidency and, perhaps, beyond.
Similarly, we're always engaged in renovation of dormitory space. In order to make Northwestern attractive for undergraduates, we have to make Northwestern attractive for the way people live. That's also true at the professional-school level for both the Chicago and Evanston campuses. It's an important thing to do.
More generally, in terms of student life, one of the things that Northwestern can do much better is to engage students in what I would call out-of-classroom life. There is somehow a disconnect between the way students think about their classes and the way they're engaged in what can be called the life of the mind, outside the classroom, in attendance at lectures, seminars, and other engagements in the intellectual world. I'd like to think that Northwestern will become an ever more exciting place for faculty, for staff, for students to take advantage of the rich opportunities that a university presents to its entire community, including the people who live in the town.
When I was at Princeton I was always struck, at events in the Woodrow Wilson School auditorium, that 30 to 40 percent of the audience were people from the town who came to the exciting things that were being provided at the institution. Evanston is more spread out, a small city; nonetheless, I think we could do better by our students, ourselves, our neighbors in how we interact with the community, intellectually and in other ways. We've done a lot of renovation of buildings, and we've started many innovative programs at Northwestern, the new humanities center, the Center for International and Comparative Studies, new centers in technology, these initiatives are very important things. But they also have to reach beyond the narrow audience of graduate students and faculty, and I think they can do that.
We have some major advantages as we face a difficult and complex future. In addition to our sound financial base and good physical plant, our town is an attractive place for people to live, and we need to work at keeping it that way. I know many of you who live in Evanston and the surrounding areas are involved in your community as citizens and as citizens of the University; I hope to be also. I won't always agree with everything that the city council wants, but I understand that we live here and that we need to be part of this community. That's a critical for Northwestern.
We're also in an environment, I hope, in which inflation appears to be leveling off. Of course, if I could make good guesses about inflation, I might not be standing here today; I might just spend all my time at a computer investing in bond markets. I don't believe anybody can predict the direction of interest rates, but it looks as though for a time we'll have a reasonably stable environment on inflation. That's good for the University; the University has a very hard time with high inflation because we're pricing a product that is already expensive for students and their families. Many students leave Northwestern with very large debts. This society hasn't yet figured out how it really wants to fund higher education, how it wants to make those investments. That's up for much discussion now in Congress, and I don't expect anything that comes out of Congress on this issue to be a plus, for us or for higher education in general; but it's easier to handle these questions in a noninflationary environment.
Let me close by also mentioning a number of significant appointments that are on my plate and that will affect the University as a whole. As I mentioned, Provost Cohen is moving on to Columbia; that means I'll want to engage in a national search for a new provost. I welcome the suggestions of all those in the room and others in the University. You can write to me directly, or to Vice President Marilyn McCoy, with your suggestions of those who ought to be considered, both insiders here at Northwestern and people you may know of at other universities who you think are suitable candidates.
We're in the midst of a search for dean of the School of Law. I hope we come to a conclusion with that soon, but we may not, and thus we might be looking again in the fall. There will always be turnover in the University, but these are two significant positions.
We need to be very selective in our judgments. I need to be, as I make those appointments; and all the people here, down the line, who make collegial decisions about hiring need to be highly selective. I hope all managers, all program directors, all people with staff managerial responsibilities, will ask themselves this question, just as I will ask myself for every tenure question that comes to me: Does this appointment really further the aims of the University? Is the quality of this appointment, whether to the faculty or staff, a quality such that we're confident that we will improve Northwestern? That's the question we should all have in our minds when we do things, and we need to be very careful as we make those decisions.
We'll continue to hold all programs to account for the highest performance standards through a process of program review, which, as you know, we undertake both for the academic and the nonacademic departments. It's critical to do that; even the Board of Trustees does a program review of itself. I suppose someone, the Board of Trustees, will be doing it for me.
We need to make sure we retain a balance at Northwestern between being a great research university and taking teaching seriously. We have a rhetoric stating that we take teaching seriously, and I think for the most part we're true to that rhetoric, but we can do better. This is an expensive place. We owe it to the students and to ourselves to make sure we provide a teaching climate that is second to none, that we do innovative and exciting things. That's absolutely critical.
We need to improve communications within the university, between departments, between campuses, and among ourselves. Here again, new information technologies are critical to that improvement, but there's a human component as well. No computer can say what is going to go on campus until somebody tells it to do that, so department managers, people with responsibilities for sharing information, have to do that job. I'm not entirely persuaded that it's done as well as it could be here.
We're going to reformat the Observer. It will come out more frequently, and I think it will be a more interesting document, one that better serves the entire community in letting people know what goes on at Northwestern University. I often can't tell what goes on, and maybe that's my lack, but I try pretty hard to find out. I think we can do better. Obviously the single best way to do that is through on-line communications, but we need a hard-copy way of doing it as well, so we'll make investments to do better on combining the two.
Let me end by saying how much I have enjoyed being here for these last few months. I commuted here for a number of months, and I got to know the University, but you can't get to know a university until you're really here, on site. I don't pretend to be able to deliver a state of the University message after only three months here. I've tried to get around but I have no illusions that I know everything about Northwestern. Probably after three years I won't know everything about Northwestern, but I'll know more. I'm still learning, and I hope many of you will bear with me in this learning process.
Many of you will have to adjust to a new president with a new style. That's always the case. I have to do my share of adjustments also. I hope that this will be a mutually agreeable process; I'd like to think that it will be, but I ask for your tolerance when I make mistakes, and I will make mistakes. Sometimes they'll be of omission, sometimes they'll be of commission. I ask you to bear with a new boy for at least a while longer.
My wife is working as a senior lecturer in the School of Law, so I feel we have a physical presence on the Chicago campus as well as here. It seems to me I'm in Chicago at least once a day, usually not to see my wife but simply to be at the Medical School or University College or at the School of Law school or to meet with the Board of Trustees. So I certainly have a sense of the two campuses, and I've gotten to know the commute reasonably well, maybe better than I would like.
I thank you all for your forbearance, I thank you for coming here, I thank you for being part of Northwestern. It's an exciting, wonderful place. We all have every reason to be proud of it. I look forward to working with you.