By Eric Arden
In October of 2009, UC Berkeley launched an “Operational Excellence” (OE) initiative with support from the consulting firm, Bain & Company, to address the major budget challenges facing the campus community. At a cost of $3M for a six month engagement, the process was very transparent with the deliverable and actions published on the OE website (http://berkeley.edu/oe/
However, upon examination of the deliverable, even at a cost of $3M, it appears the scope of the OE effort left out any analysis of cost savings opportunities in the Athletic department.
In response to the current budget crisis, the Cal athletic administration has recently identified 5 sports programs for elimination, but what was the process used to make these significant cuts? Without any underlying information regarding the process and basis of this decision it is difficult for the sporting community on and off the campus to support this direction or take action to help UC Berkeley improve the situation.
The coaches, players, parents and sports community are looking for a comparable OE level of effort in the process used to make a decision that has such far reaching consequences. Additionally, the affected teams and their sponsors are prepared to work together to close financial gaps and maintain compliance with Title IX. However, at this point, no one at UC Berkeley can answer the questions “How was the decision made to eliminate my program?”, and “How much money will be required to reinstate it?”
What follows is an example of an approach to execute a transparent process for the coaches and community to address the financial issues in the sports programs facing UC Berkeley today. This technique is targeted, can be done quickly and at a minimum expense to the University and tax payers.
1) Ask Haas for accounting help.
Follow the money. The Haas Business School has skilled resources that can support resolving the financial accounting issues related to the different sports programs. Currently, the coaches are trying to pull these numbers together themselves. Cal needs consistent accounting standards and a complete analysis across all of the 29 sports programs.
For example, each program to understand their position has a right to know:
- Total revenue from ticket sales, alumni/booster/foundation contributions that support the program including external funding of scholarships.
- UC Berkeley funded scholarships
- Non-Capital expenses related to equipment, facilities etc.
- Detailed Capital Improvement Projects related to facility expansions allocated to the programs requiring the facility
2) Identify and communicate all factors, internal and external, that deserve consideration in a decision to remove sponsorship for a sports program.
The objective is to consider both direct and indirect or non-tangible benefits related to the sports program on and off the UC Berkeley campus. Sports programs are a way of marketing Cal to the high school population and attracting the best and brightest students. The Haas School of Business marketing department may also be helpful in this analysis.
- Divulge the metrics that were considered in this decision.”Other important factors considered included… donor impact, student opportunity, proximity of national/regional varsity competition, contribution to diversity, impact on the campus’s ability to comply with Title IX, opportunity for NCAA and Pac 10 success, utilization of support services and history of competitive excellence.” Identify the specifics and replace perceptions that these are opinionated decisions with facts.
- Consider the GPA of team members (average and cumulative).
- Consider current participation and growth at the NCAA Level (http://www.ncjla.org/)
- Consider current participation and growth at the high school level, especially in California (http://www.nfhs.org/content.aspx?id=3282&linkidentifier=id&itemid=3282)
- Consider current participation and growth at the youth level, especially in California…
With the existing talent in the Haas School of Business, this transparent process and relevant analysis could be delivered in much less time with less funding than the Bain & Company engagement. A robust analysis would certainly look good on the resume of graduates looking for jobs in sports marketing or the consulting community. Lets apply some “Operational Excellence” to sports program decisions and make balanced decisions considering internal and external factors in a process transparent to the community.
Business Process Transformation