A revolution in Ann Arbor is led from the corner office

Mary Sue Coleman is a rock star college president.

Since being appointed the 13th president of the University of Michigan in 2002, she has been on a tear, successfully guiding the U of M to ever-increasing stature through very difficult times. The U of M has risen in reputation to No. 18 in the entire world, according to the Times Higher Education World Reputation Rankings. At the same time, the annual all funds budget for the Ann Arbor campus has risen to $5.8 billion, and its endowment to $7.8 billion (sixth among all 642 U.S. colleges and universities and second among public schools).

But right now, she’s worried, very worried.  Now is one of the most difficult times in history for great American public universities,” she told me. “Our old business model is unsustainable, and we’ve got to move -- gradually -- to a new one.”

Together with Provost Phil Hanlon, a former U of M mathematics professor, Coleman has been developing a two-pronged strategy for dealing with the university’s increasingly fraught environment, which includes sharply reduced state support, rising tuitions, ballooning student debt, reduced student accessibility, legislative hostility and a new Web-based technology for delivering education products.

Prong No. 1: Take out costs. 

Year by year for more than a decade, the university has been gradually, remorselessly tightening its belt. Over the period, the U of M has taken $235 million in costs out of its general fund budget by reducing expenditures between 1.5 percent and 2.25 percent per year.

“We’ve been relentless,” says Hanlon. “By now, everybody expects it. That’s the way you transform an organization.”  He’s quick to add that the total $235 million cost reduction just about equals what the inflationary rise in university expenses would have been over the period. 

“We’ve done this without general layoffs,” explains Coleman. “In fact, during this period, we’ve added 150 new faculty positions and reduced our overall student/faculty ratio.  But we’ve also increased productivity, changed work rules, made changes in benefits. They’re a lot of little things, but, year by year, they have added up to changing the culture of the institution.”

But Coleman adds that universities cannot be run, top-down, like a big corporation.  “We’re a very complicated organism,” she says, “with many differing constituencies -- students, faculty, staff, alumni -- and many institutions of shared governance. You simply cannot walk into a room and lay down the law. You have to work with people … but you have to be remorseless.”

Prong No. 2: Foster a revolution.

The basic business model of most universities -- a professor lecturing in front of students – is now at risk, thanks to new, web-based technology. Coursera, a nonprofit joint venture among the U of M, Princeton, Pennsylvania and Stanford, is offering free online courses taught by world-famous professors. The response to this revolutionary business model has been overwhelming: More than 100,000 students worldwide have taken courses already, and the total world market for “education for everyone” products is in the millions. 

The U of M is at the forefront of all this, just now taping seven new online courses. “But we’ve gone way beyond just distributing teaching on a new platform,” explains Coleman. “We’re involving our own students who answer questions and grade periodic tests online.  That way, our students gain enormously their understanding the subject by teaching it, while at the same time earning some money.”

Hanlon, the provost, has been thinking about this changed business model for some time.  He calls it “immersive learning."

When developed, it works like this: Students can learn the mechanical manipulations of, say, calculus by listening to lectures, whether in person (old model) or on-line (new model). But learning how to apply calculus techniques to real-life problems is something that demands close, back and forth interactions between student and teacher. More often, this comes through small group practical discussions, much like the old “sections” that covered lecture material. It is through supervised immersion in use of the basic techniques that residential universities propose to add value and sustain their operations.    

Of course, any new technology yields questions, big ones. Suppose universities give out a certificate for successful completion of an on-line course. How much will it cost? What employers will accept it? Will families be willing to pay ever-higher tuition if on-line courses are offered free? Why should universities pay big money for brick-and-mortar facilities when they can distribute courses via the Internet? What, really, is the value-added for a traditional -- i.e. residential -- university, when so much material can be distributed online?

Nobody knows the answers to these questions. But the answers will shake the foundations of the nation’s -- and Michigan’s -- university system in ways unimaginable. 

For years, I’ve thought that the creation and maintenance of great public universities has been one of the signature accomplishments of American society. In recent years, I’ve wondered whether our university system could survive all that’s been thrown at it.

I now believe its continued survival will depend in part on patient, persistent efforts being undertaken in Ann Arbor.

Editor’s note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics. He is also the founder and chairman of the Center for Michigan, a nonprofit, bipartisan centrist think–and–do tank, designed to cure Michigan’s dysfunctional political culture; the Center also publishes Bridge Magazine. The opinions expressed here are Power’s own and do not represent the official views of the Center. He welcomes your comments via email.