1. Panel on Reform and Innovation, Virginia Summit on Economic Competitiveness and Higher Education September 18, 2013 Pat Hogan, Executive Vice President and Chief Operating Officer University of Virginia

2. Aspiring to World-Class Performance in Higher Education “ The critical distinction is not between business and social [sector], but between great and good.” “Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice and discipline.” - Jim Collins Good to Great and the Social Sectors 2

3. Aspiring to World-Class Quality and Globally Distinguished Performance World-class EFFICIENCY High Low High EFFECTIVENESS EFFICIENCY World-class EFFECTIVENESS 3

4. U.Va. Strategic Plan Pillars and Strategies Pillar 5: Steward the University’s Resources to Promote Academic Excellence and Affordable Access 4 Strategy 14: Organizational Excellence A formal “Organizational Excellence” program to enable the achievement of institutional strategic goals and priorities – excellence in education, research, and scholarship – and leverage institutional core strengths and distinctions through resource alignment and optimization. Guiding Principles Academic and administrative collaboration Data-driven and results-oriented Structure for ongoing, not episodic, impact

5. Blends elements of continuous improvement programs and operational excellence programs Comprehensive – spans academic and administrative Links to and enables strategic priorities U.Va.’s Organizational Excellence Design Office of Quality Improvement Office of Continuous Improvement Organizational Improvement Services Process Simplification: Est. 1994 Continuous Improvement Programs Examples Operational Excellence Programs Examples Administrative Streamlining Administrative Excellence Operational Excellence University of North Carolina Business Process Improvement Operational Excellence Finance and Facilities 5

6. U.Va. Organizational Excellence – Learning From Others Learn from other University approaches to quality Similarities among higher education Adopt and adapt solutions Learn from other Universities that have engaged consultants for transformative change Reviewed consultants’ reports and proposed areas and strategies for efficiencies at other schools Assessing U.Va. practices against those proposed actions Partner with consultants in a targeted way. U.Va. has explored the services of more than seven firms Intend to engage consultants in only a focused manner Sustained change requires University community engagement Discover(Re)DesignRealize 6

7. U.Va. Organizational Excellence - Current State Assessment Conduct Comprehensive Benchmarking Benchmarking study of processes in administrative functions (central-, unit- and school-based) led by a third-party consultant Areas include: - Finance - Information Technology - Human Resources - Procurement - Research Administration - Development - Student Services Quantitative performance comparisons with higher education peers and private industry Baseline to monitor future performance and identify areas of opportunity for improvement Discover(Re)DesignRealize 7

8. U.Va. Organizational Excellence – Planned Activities Expand current high-performing areas into institutional Centers of Excellence Adopt shared services delivery in select areas Develop an enterprise, long-term space planning and management approach Capitalize on a versatile sourcing model that balances insourcing, outsourcing and co-sourcing Explore and assess feasibility and prudence of monetization of assets Conduct review of non-productive assets, such as real estate inventory 8

9. Measureable results that advance excellence in education, research and scholarship; resource optimization; and promote a culture of excellence 9 How will we measure SUCCESS? EFFICIENCY QUALITY STRATEGIC REINVESTMENT $45 million by FY2017

10. 10