November 28, 2005
plans begin to take shape
by michael terrazas
At the June Board of Trustees meeting, during which
the board was treated to a preview of the University’s strategic
plan and revised campus master plan, two main questions arose, according
to Mike Mandl, executive vice president for finance and administration:
How much is it all going to cost? And how will Emory pay for it?
Mandl’s answers (only partially in jest) were: “A lot.
And I have no idea.”
Much work has been done in the past six months to provide
more serious responses,
and Mandl now estimates that, when the strategic plan’s initiatives are
fully implemented, it will add about $200 million to the University’s annual
expenditures (currently at $1.2 billion, not including Emory Healthcare). Tack
on another $730 million in capital investments to realize the master plan (not
including the total cost of Emory Healthcare’s ambitious Clifton Road Redevelopment
Project, estimated at $1.2 billion), and it’s clear that turning Emory’s
vision into reality will not be inexpensive.
But, despite the daunting numbers, he said the University
is well positioned to pull together the resources; as much as $100
already has been reserved
for strategic initiatives over the next five years, and another $185 million
has been identified for capital projects. The rest will come through a combination
of methods, including financial management, program development, revenue from
intellectual property (such as the recent sale of royalty rights to the anti-HIV
drug Emtriva)—and, of course, the comprehensive campaign.
The first thing to understand, Mandl said, is that
when it comes to financial
strategies, the distinction between “strategic plan” and “master
plan” does not exist. “To me,” he said, “the master plan
is just a component of the strategic plan, and our financial planning will pursue
Second, all projects will be considered in relation
to four criteria, which Mandl described at the Nov. 15 Faculty Council
that will be funded
make a visible difference in advancing the University strategy;
initiate activities that become self-sustaining;
create a traceable, clear return on investment (though the return does not necessarily
need to be financial); and
encourage the leveraging of additional resources.
In the short term, a number of capital projects already
are in the pipeline, including the School of Medicine administration
under construction; a new psychology/chemistry complex for Emory College; the
theology initiative to replace Bishops Hall and provide a new home for the Pitts
Library; a home for the Center for Ethics; and a new freshman residence hall,
on which Mandl said he hopes to break ground next summer on the site behind the
Dobbs Center currently used for surface parking.
Over the longer term, time lines will vary according
to the success of strategic initiatives and the progress of the campaign;
Mandl said, will
play a large part in determining which capital projects make it from concept
to construction most quickly.
“A number of leaders in the Woodruff Health Sciences Center have been meeting
over the past three to four months to develop a financial plan to fund the Clifton
Road Redevelopment Project,” said Michael Johns, executive vice president
for health affairs. “It is clear that we will have to look to a number
of sources to support an initiative of this magnitude, including Emory Healthcare
operations, philanthropy, existing funds and bonded indebtedness. Our goal, naturally,
will be to minimize the amount of debt we have to assume to reach our strategic
According to Johns and Provost Earl Lewis, who co-chaired the Strategic
Planning Steering Committee, prioritization and funding allocation
mechanisms for strategic
initiatives were built into the planning process itself; all of Emory’s
schools and units were asked to develop resource components to their respective
plans, which together make up the bedrock of the University’s overall strategic
plan. And though certain strategic initiatives will receive special consideration
this fiscal year from the Ways & Means Committee, Johns and Lewis said such
funding will be built into the University’s normal budgeting cycles.
“These plans arose from the schools, and it only makes sense to let the
schools implement them through their own budgeting processes,” Johns said. “The
University can help out with providing resources from a central fund earmarked
for strategic initiatives, but the schools know best which programs will help
them realize their strategic goals most effectively.”
However, the five cross-cutting themes will have new
structures created for them; each theme will be managed by an implementation
each strategic initiative will have a pair of co-chairs charged with overseeing
implementation. For example, the theme “Exploring New Frontiers in
Science and Technology” will have an implementation leader; within
that theme, the strategic initiative in predictive health will be managed
by a pair of co-chairs.
This structure will be replicated for each theme and each initiative. “The
ultimate goal is to make this a better research university. The plans and
the implementation process must facilitate that objective,” Lewis commented.
Johns and Lewis said standing BOT committees likely
will play some role. For example, the board’s academic affairs
committee could be linked to implementation of the “Strengthening
Faculty Distinction” theme. As one trustee
observed, developing a world class faculty is key to the university realizing
its overall goals.
Finally, because much of the initial funding available
for strategic initiatives is taken directly from the Emtriva sale,
significant federal compliance
issues; the Bayh-Dole Act, under which these proceeds are governed, stipulate
that the money must be used for “scientific research or education,” and
that language generally has been interpreted to mean research or education
in the “hard” sciences. More guidelines about applying for funding
as a strategic initiative will be going out to school-based planners soon.
“It does all sound complicated, but as we move through the year, make the
necessary appointments and flesh out these implementation outlines, it will become
clearer,” Johns said.
“The hardest part is managing expectations,” Lewis said to Faculty
Council. “When you’re trying to deal with something this grand, it
requires patience. We have to set priorities, build an evaluation structure,
and assume that some things we will try won’t succeed. The plan requires
us to take intelligent risks, and we must be prepared to do so.”