A Pivotal Moment: A Message for Faculty and Staff at the Start of the New Semester

As we begin this semester, we must recall our path to this moment, which includes our strategic plan and the Magis Operational Excellence program. I know many of us are feeling a wide array of emotions regarding the organizational and financial decisions that face us. Members of the President’s Advisory Council, President’s Coordinating Council, and Deans have continued to apprise me of your unease, questions, and concerns.

Here are the important points I hope you receive from this message.

  • SLU values you, our people. Even as technology changes, the work done here requires intelligent, compassionate, and driven individuals like you.
  • Difficult decisions affecting the SLU community will be made in the coming months and over the next few years. We fully understand these decisions will affect your families.
  • This is a pivotal moment in the history of our university. The direction we turn, depends on all of us.
  • When we look at the many challenges in our world, nation, and region it is apparent that the type of Jesuit education and compassionate health care we provide has never been more important, relevant, or needed.

Driven by our common purpose, our aspirations for our community, and our Jesuit values, we have dedicated ourselves to building a culture of collaboration and trust. We remain united by a shared calling to serve, especially our students and patients, and to advance various fields of study that improve our world during times that test our resolve.

In August 2014, we embarked on a collaborative strategic planning process. Through it, we expressed a shared ambition to be operationally excellent and financially stable. We also identified a series of broad initiatives that will define SLU as it moves into its third century of providing a distinctive, Jesuit education.

Despite our history as an innovative leader in academics, in health and medicine, and in our community, challenges remain. In our many planning sessions, you identified several longtime institutional barriers to the transformative change we imagined.

  • Administrative processes are too complex.
  • Approvals are too burdensome.
  • Levels of service are inconsistent.
  • Budgeting lacks accountability.
  • Students have insufficient time with some of our finest faculty.

Further, our ability to implement the strategic plan has been constrained by the University’s negative operating margin. Auditors confirmed SLU closed the last fiscal year (ending June 2016) with an operating loss of $16.7 million 

Combine these factors with the changing landscape of higher education, and we have operational and financial performance that is simply unsustainable. As stewards of this nearly 200-year old mission, we have a responsibility to transform the university in ways that assure its long-term impact and history of excellence.

In my March 2016 memo, I shared, “Despite these forces, we remain committed to keeping a SLU education within reach for qualified students. We will continue to increase financial aid and maintain need-blind admission policies that assist in enrolling low-income students, academically talented students, veterans, and first-generation students.”

Rather than yield to the challenges facing our University, we launched the multi-year Magis Operational Excellence program. It was designed to identify opportunities for cost savings, revenue growth, and improvements in operational effectiveness at every level.

Another reason for this undertaking is the recognition that continuing excellence and achieving our high aspirations depends on our ability to fairly reward our faculty and staff. Future surpluses will address our strategic priorities. As previously communicated, “We plan to devote at least 20 percent of the positive net results realized by the multi-year Magis Operational Excellence program to bringing our compensation practices in line with our strategic plan” (March 2016 memo). 

This complex undertaking required an external consulting firm. So after a difficult deliberation and rigorous interview process, we selected Bain & Company, who provided us with a comprehensive set of facts and comparisons to assist with the design work Initiative Teams. While I await recommendations from Co-sponsors Provost Brickhouse and CFO Heimburger, I am also seeking advice and information from other administrators, faculty leaders, and staff.

To be clear, our University leadership will make the decisions, and all changes will be considered in a manner consistent with our mission, values, and culture.

A regrettable part of the operational review will be the reduction in the number of people employed by the University. This is painful for any organization but it is particularly so for us, a place where community is strong, dignity of person is valued, and our common purpose is the framework for success.

We do not yet know the exact number of reductions, but we do know they will impact every operational and academic unit. Decisions will be guided by data and made after careful thought and discussion. We remain committed to following our practices of shared governance during deliberations affecting academics, and I encourage faculty to connect with their deans and members of the Faculty Senate with questions and suggestions.

We will do all we can to support those transitioning to employment elsewhere. Special considerations for tuition remission are being developed for current and future SLU students who are children of parting employees. Qualified employees with a history of good job performance will be given hiring preference in future years. Details are still under development but will be made available prior to any notification of job loss.

I know this situation generates angst and anxiety. It is legitimate to feel stress about how the Magis Operational Effectiveness program may affect your family, your future, and your role here at SLU. It is our hope that frequent communication and continued transparency, which includes sharing the timeline for separations as it is known, will aid in releasing some of the tension you rightfully hold. I understand that in the meantime, if other opportunities arise, you have to do what is best for you and your family.

As we move through reductions we will simultaneously focus on growth. I am in the midst of creating a group of academic and other leaders to recommend programs and opportunities that are in line with our strategic plan and likely to add new net revenue and raise our national prominence. I will be sending another communication that describes this effort later in the term.

I realize that you work hard and make sacrifices to advance SLU. I have observed many of the ways in which you have ensured that the experiences of our students and patients are the first priority. I hear many stories of how you go above and beyond to help others.

I want to thank each of you, particularly the hundreds of faculty, staff, and students who spent thousands of hours working together over the past few years to create a vision for SLU, assessing our strengths, identifying our weaknesses and envisioning our future.

So what must SLU do now?

We must face the challenging decisions before us. We must improve our financial situation in order to have the resources necessary to fund our plan and better compensate our people. We must reassess our overly complex and burdensome processes, flatten organizational layers, and fix inefficiencies. We must break down walls and achieve the many benefits of creative collaboration. We must identify areas for focus and growth and vigorously pursue them. We must become more of the SLU we all want to be and in so doing, reach new heights as a premier, Jesuit research university.

You are all dedicated professionals. I know that through this process you will keep doing your best work, advancing the frontiers of knowledge, educating and supporting our students, and treating our patients, in the spirit of our Catholic and Jesuit values. That is what makes SLU the special place it has always been and always will be.

Sincerely,

Fred P. Pestello, Ph.D.
President