Draft of UMN President Eric Kaler's State of the University speech

Here's the final draft used by President Eric Kaler in yesterday's State of the University address.

Good afternoon.

To start with the obvious, we are in the midst of the perfect storm for higher education.

Like all land-grant, top-tier public research universities, at the University of Minnesota, the economic crisis fueled severe budget cuts and drove tuition and student debt increases. The scarcity of jobs for some college graduates—here and nationally—has also driven heightened public angst and demagoguery about the value of a college education.

But, to me, even in the face of these very real concerns, much of the public conversation about higher education feels like a knee-jerk reaction, or worse. All sorts of ideas are flying around to allegedly improve higher education.

For example, in December, Florida's governor suggested that students should pay more to earn an English degree than to earn an engineering degree. Here's the theory, as best as I understand it: His state aims to encourage more students to study engineering (for example) because humanities and liberal arts graduates simply won't bring as much "strategic" value to employers. Similarly, a member of Congress recently proposed to cut federal funding for the social sciences.

To these proposals and similar ideas, I say, nonsense.

Every day, Minnesota CEOs tell me that they need college graduates who are critical thinkers, clear writers, and are multilingual. To compete in an increasingly diverse state and rapidly changing economy, employers need to hire young people who can:

communicate well,

work effectively in groups and across cultures,

have global experience, and

who can bring an interdisciplinary perspective to solving problems.

It's easy to toss out so-called "bold ideas." And—don't get me wrong—we need bold ideas. We need to embrace change, reward innovation, and try new teaching models.

But we need ideas that work for the University of Minnesota, and for our state. We need to embrace change the Minnesota Way.

No state has quite as distinctive a culture of innovation as we do, no comparable responsible business leadership, and no historic commitment to education as ours. Historically, Minnesota has been a leader of reform. In that, we can claim a certain, humble kind of above-average exceptionalism.

From farmer cooperatives in the late 1800s, to ensuring health care for the working poor in the early '90s, to delivering the nation's highest voter turnout year after year after year, Minnesota has led, not lagged.

This University also has a rich history of forging a uniquely Minnesota Way of doing things. This year, we're celebrating 100 years of shared governance and 150 years of our great land-grant mission. From American studies, to economic theory, to informatics, to open heart surgery and—yes, even—chemical engineering, we've broken new frontiers in the disciplines.

Be it bringing civility to the political arena at the Humphrey School, or preparing tribal leaders through the University of Minnesota Duluth's unique master's program, or starting an innovative new campus in Rochester, we are responsive to the needs of the people of Minnesota.

So, as we face our future—next year, next decade, and next century—I want us to meet that not by chasing every new idea and not with flamboyance. I want us to move into the future on the path that's right for us, with the common good of the state and our students as priorities.

I'll talk in a few minutes about elements of our University's way forward, and the directions and work we need to do together. But, first, I'd like to acknowledge Regents Cohen, Larson, Beeson, Brod, Hung, Johnson, and Ramirez. Thank you for being here.

Regent McMillan, thanks for watching with our students at UMD. Regent Simmons, thank you for watching at UMR. Thank you all for your support, which I deeply appreciate.

To our faculty and staff across all of our campuses, from Morris to Duluth, from Crookston to Rochester, thank you for joining in today, and for your important and hard work over the past year.

To our students, thank you for bringing such energy to this University, and to me.

Which leads to this personal note. Following these remarks, I will take questions, and already some have been submitted online. To submit questions, you can go to Twitter and direct them to #UMNSOTU.

But I want to jump the gun a bit because one question particularly struck me. Someone asked, in part, "At a time when it is not easy to find good news about higher education, where can we find inspiration?…Put another way, 'What inspires you to come to work every day?'"

Well, first, I do like coming to work. I like it because I truly believe in the mission of this great University. Our ability to change lives and make the world better is amazing.

Maybe that sounds trite, but it is something that holds me in awe, and I hope it does you, too. I can't imagine more important work, and I feel privileged to have the job I do.

I also like coming to work because this University is complex, dynamic, and filled with challenges. I'm an engineer, and I like to solve problems. And I like to be around smart people. I get to do these things every day.

When I see the ideal University of Minnesota, I see a place of great hope, great opportunity, and great achievement. It is a place that should be accessible, but one where excellence is the norm.

It should be a place that is a pathway to a better life for our students, but one where the best students in Minnesota are challenged, and where the best faculty and staff want to be. And that goal drives me every day.

By all measures, this is a great university, one of the nation's best, and an incredible place and community, whether that community is in Crookston or Duluth, Morris or Rochester, or right here in the Twin Cities. Across the board, we have remarkable, world-class excellence.

I know, we're not perfect, but our flaws are not fatal, and the state of the University of Minnesota is strong. We've accomplished much together in the past year.

A commitment to affordability and access for our students—combined with excellence what we do—remain my highest priorities.

As you know, in our budget request we've proposed to renew the partnership with the state for a two-year freeze on tuition for Minnesota resident undergraduates on all of our campuses. I'll remind you that last year, we adopted the smallest percentage tuition increase in a dozen years. I won't be speaking much about our legislative request today, but—believe me—we are fighting hard for that zero tuition increase right now.

Put simply, we need to keep the public in public higher education.

We need the citizens of our state to renew their partnership with us in a way that helps drive Minnesota's prosperity.

In return, we must—and we can—demonstrate the exceptional and irreplaceable value the people of Minnesota get from that investment. That includes investing in cutting-edge research, which drives Minnesota's innovation and discovery culture.

Our MnDRIVE proposal to advance innovations in food, water quality, robotics, and brain disorders focuses on the needs of our citizens, our business community, and on the emergence of new industries.

Minnesotans simply cannot afford NOT to invest in research and innovation.

This morning the state's budget forecast was released and the shortfall is now less than anticipated, which is good news and encouraging for higher education.

In addition to advancing our twin goals of excellence and access, we've achieved a great deal in the past year:

I said I wanted us to establish entrepreneurial leaves for faculty, and the Regents approved that.

I proposed making better use of our facilities and faculty capacity on the Twin Cities campus during the summer, and we recently announced a pilot program in the College of Design to do just that.

I encouraged us to bring our expertise and research to the forefront to help close Minnesota's achievement gap among our youngest citizens. We've done that by asking our College of Education and Human Development and the new Campbell Leadership Chair Professor Michael Rodriguez to help coordinate and lead this work across the University and with our communities.

In the Twin Cities, a group of civic and business leaders launched Generation Next, a broad-based partnership to tackle the achievement and opportunity gap. Representing the University's commitment, I am the co-chair of that initiative.

To drive our diversity agenda, I committed to maintaining leadership of the Office for Equity and Diversity at a vice presidential level and, after a national search, we have found absolutely the right person for that job. We are delighted that Katrice Albert, who is currently at Louisiana State University, will join us later this year.

This year, we opened Huntley House, a first-of-its-kind, living-learning experience for African-American men on the Twin Cities campus.

I set aside funds to hire faculty, filling some of the positions left open during the years of severe budget reductions and to meet strategic goals. To date, we have hired 92 full-time faculty members system-wide, 65 of which are tenure or tenure track.

To advance teaching and learning, I vowed to invest in eLearning.

As you know, our Crookston campus was a pioneer in distance learning and—let's not forget—the first in the country to supply laptops to our students way back in 1993. But in the 21st Century, we need to drive a modern, coherent strategy to bring technology to the classroom, modernize our distance offerings and test new models, including Massive Open Online Courses, or MOOCs.

We announced last week our partnership with Coursera, which offers exciting possibilities. In CEHD, we're pioneering the use of iPads to enhance teaching and learning. What we learn there can inform the strategy for other colleges. These are just first steps in the development of a comprehensive eLearning strategy being led by Provost Hanson.

I think it's clear that the question and challenge of the time is how eLearning—and other innovations on the horizon—will impact what we do in the classroom. MOOCs are one tactic, and likely an important tactic. However, they are not in and of themselves the silver bullet for achieving cost savings, access, or academic excellence.

Carlson School Dean Sri Zaheer speaks eloquently on this topic, calling MOOCs and other trendy techniques the "Big Mac" of higher education. That is, a product that is brought to scale to quickly feed a need.

But, she asks—and I'll quote: "What nourishment are you missing out on when you get the Big Mac instead of the three-course meal?"

To me, there is a massive educational difference between the fast food option and what Dean Zaheer calls the slow food approach. In the slow food model, the chefs—our faculty—still use all the digital technologies available, but we retain the master teacher, who, face-to-face, can inspire our students even as our students inspire one another.

Even with MOOCS, instructors will not become obsolete. Most importantly, I want this first step with Coursera to galvanize our creativity and to jumpstart your ideas for using eLearning on all of our campuses.

On other accomplishments, after 75 years, we merged the University of Minnesota Foundation and the Minnesota Medical Foundation to better serve our donors, who contributed nearly a quarter-billion dollars to our University last year.

We are in demand, with more than 42,000 applicants to our Twin Cities campus, a record, and with applications up to all of our campuses.

Our first-year retention rates are excellent system-wide, and have now reached 91 percent on our Twin Cities campus.

Our four-year graduation rates are up on all of our campuses. It seems to me we must be doing something right.

This past year, we made great progress on Operational Excellence. I just know that Op Ex is everyone's favorite topic, and, yes, here I go again!

But I think this is exciting, and I know it is fundamentally important and necessary for our future. It is our way of doing business—to reduce costs, and improve efficiency as one University.

It is not only that students, parents, and Minnesotans who help support this University are demanding it. It's the right thing to do.

We need to drive administrative costs down and demonstrate exceptional stewardship of our precious resources: state and tuition dollars, and federal and private grant funding.

When we do that we are able to invest more in our core mission: teaching, research, and public engagement. We are better able to support you: our students, our faculty and our staff. That is why we do this work.

We've done a lot, but we must—and we will—do more.

Right now we are in the midst of analyzing our organizational structure to learn if and how we can be more efficient.

The Libraries have already completed a similar analysis and achieved tremendous impact: By examining each job, the Libraries were able to reduce by 43 percent the number of supervisors with fewer than five direct reports. They achieved a 22 percent reduction in the number of supervisors overall, enabling those people to deliver directly on their mission.

At the same time they implemented an intensive manager training program to improve operations and align people and resources with current priorities. If the Libraries can have such a positive impact with 272 employees, imagine the opportunity system-wide for 19,000 employees.

When we receive the results of our current analysis, any decisions that we make about our organizational structure will be thoughtful, fair, and transparent.

We are also benchmarking ourselves in the key operational areas: finance, human resources, information technology, and purchasing. Because we want to see how our practices and costs stack up against peer institutions.

In our Office of Information Technology, our partnership with Google and server consolidation initiatives have resulted in 1$5 million a year in cost savings. With these savings, Vice President Scott Studham has been able to invest an additional 3 million dollars in academic technology support for faculty projects like MOOCs, and to help faculty integrate new technologies into their courses.

We eliminated the Offices of Academic Administration and Bursar, reducing our annual costs by $2.2 million, while also tightening the reporting lines of our system-wide chancellors to me.

We've looked across the country at what others are doing. And, as what should be the Minnesota Way, in many areas we're out ahead on this, too.

The University of Texas at Austin, a great public university, recently released a report called "Smarter Systems For a Greater UT." We read that report.

Their cost-saving initiatives include: energy savings and sustainability.

We've been working on that for years, with our Morris campus a national leader. And we've been saving more than $5.6 million annually through energy conservation and by closing unused buildings on the Twin Cities campus.

UT wants to improve its technology commercialization operation to generate additional revenue.

We've done that. The U is now a leader on tech transfer, our MN-IP intellectual property program has been a success and recognized by the U.S. Department of Commerce and the White House last year.

UT wants to consolidate reporting lines and services in human resources and information technology, among other things.

We're already doing that.

So, we're executing Operational Excellence thoughtfully, but at a pace that I like.

Finally, we've made great progress forging the future of the Academic Health Center.

Last year in my State of the University address, I said we would complete an external review of the AHC to increase its national prominence, strengthen our health sciences, and move the Medical School forward.

We did that.

The review was helpful, and a faculty-led Medical School strategic planning effort is under way. This plan is designed to set priorities, achieve better alignment across departments, and give the Medical School the guiding "north star" that its faculty and staff desires.

Vice president for health sciences and dean of the Medical School Aaron Friedman has decided to step down at the end of the calendar year, and I thank him for his service.

This is a critical role and is an important member of my senior leadership team. We have launched the search for Dr. Friedman's successor. And you should know I am seeking an exceptional leader with a vision to ensure the University of Minnesota is a leader locally, nationally, and globally in meeting the challenges of our changing healthcare landscape.

While none of us knows for sure how healthcare reform will change our current system, there is strong consensus about a few things:

First, keeping people healthy will be more important than ever.

Care will more often be provided in community settings by a team of healthcare professionals.

Health systems almost certainly will consolidate and high-end care will similarly consolidate at regional or national centers of excellence.

Basic and clinical research will be employed to drive optimal outcomes.

And finally, health care will be more consumer and patient-centric.

But looking into this future, it's clear that the University of Minnesota's Academic Health Center is poised to meet this challenge.

Already, 70 percent of all the health sciences professionals working in this state are University graduates, and that will only grow as our Rochester campus continues its unique role of preparing a new breed of health professionals. UMR will graduate its first class this spring.

The University has one of the most comprehensive academic health centers in the nation. With six health sciences schools, we're already training students to work in medical teams that include physicians, pharmacists, nurses, and dentists, and to integrate traditional and holistic healing. We are leaders in interprofessional education with the only national center tackling this challenge. Our researchers and physicians are already bringing the latest in medical science to the bedside.

To advance this vision, our conversations with our partner, Fairview, continue. We want to forge a shared vision and create a truly integrated pre-eminent health system. We're working hard to make that to happen.

So, we've done a lot together this past year. It's been a very good year, and I thank you.

Now, let me talk for a little bit about where I'd like us to go in the next 12 months. In July I will have completed two years at the University, believe it or not. The majority of a new senior leadership team will be in place, and we will know where our state allocation sits. I believe the time will be ripe later this year to develop a new strategic plan to guide the next generation of decisions.

The planning will have at least three components:

examining our classroom and other teaching,

our research endeavors, and

how we deliver our mission to Minnesota and the world beyond.

I expect the plan to guide priority setting and create greater alignment and accountability across the University system. I want a process that is transparent and engaging to create a shared purpose, but I want to avoid being bogged down by elaborate processes. It won't take a year, and we don't need to form scores of committees.

Over the next few months, I will work with my senior management team and governance to develop the planning process with a goal of launching in the fall.

Let me turn to graduate education.

I know that is imperative that we maintain excellence in our graduate programs.

I came here as a graduate student and I am not about to let our graduate programs slip in terms of their national reputation. We need strong, competitively funded programs to attract the best graduate students in the world to Minnesota.

Provost Hanson is partnering with deans and faculty leaders on the Twin Cities campus to devise a long-term, sustainable plan for recruitment and support of the very best graduate and professional students. As a first step, we are increasing funding for graduate fellowships this year. We've reallocated more than $750,000 to Ph.D. fellowship funding. It's not enough, but it's a step in the right direction, and it builds on my allocation last year of additional dissertation fellowships.

Three years ago, as you know, we embarked on an experiment to change the way we managed our graduate programs. We gave the colleges resources, authority, and local control. We've learned a lot over the past three years. Now, I think it's time to take a look at what has worked and to make recommendations for improvements.

It's time for what I've started to call "Graduate School 2.0." I am asking Provost Hanson and Vice Provost and Dean of the Graduate School Henning Schroeder to bring me recommendations in the fall.

Meanwhile, on the research front, when I talk with faculty I consistently hear that we make it difficult, if not impossible, to do the kind of interdisciplinary work that defines the cutting edge in most fields and that is critical to solving most of today's problems. When I report that to the deans, they tell me that we can do it, but maybe the budget model gets in the way. Whatever the barriers, they need to go away.

Our new vice president for research Brian Herman has begun a strategic planning process for his office that will be consultative, and he wants to promote collaboration between researchers in all disciplines and to increase public-private partnerships. Of course, I strongly support that.

So today I am asking Provost Hanson and Vice President Herman to develop recommendations for facilitating more interdisciplinary teaching and research.

You know I've been on a quest to "free" our organization from unnecessary administrative burden—those that we impose on ourselves because we have a low tolerance for risk, or because we're afraid a misdeed of two decades ago will happen again.

I expect we will always meet our legal and regulatory obligations. At the same time, however, we must continue to recalibrate our risk tolerance. That means we must look at our own internal policies and ask the question—do they meet—or do they exceed—legal or regulatory requirements?

If they are excessively burdensome, going beyond what the feds or other entities requires us to do, we should change them…or at least make an intentional decision not to!

Today, I'm asking each vice president and each policy owner to review their policies through this lens of risk recalibration. I expect this will lead to substantial simplification in transactional activities for faculty and staff.

Just as tuition is the key topic to our students, and interdisciplinary approaches are important to our faculty, I hear from employees what's critical for them. I hear that they want to be more fully engaged. They want a clearer career path. They want to have effective guidance and evaluations.

That's why I'm pleased today to announce that we will soon roll out a comprehensive employee engagement strategy. This is a best practice used in many effective organizations. Engaged employees make for a better University.

Finally, while I try my best to get out and meet students on a regular basis, sometimes that's hard to do. I miss being around students. I want to see more of them. It's important to know their concerns and I feed off of their wonderful curiosity.

So, I'm going to start holding office hours for students on all of our campuses. As my schedule allows, they will occur monthly on our Twin Cities campus, and I have plans to visit the Crookston, Duluth, and Morris campuses in the coming months.

I will meet with students during my days there. I look forward to those conversations.

In closing, earlier this month, I was at the Capitol in St. Paul to testify before the Senate Higher Education Committee. I was joined by three students, four faculty members and a leader of the Minnesota business community.

The students, with their energy and optimism, told the senators of their dreams, and how the University has helped them to achieve them.

The faculty members spoke of their discoveries and, with excitement, about what's next on the University's innovation agenda.

The business leader detailed to the senate panel how important our graduates and our research are to his industry, and others.

Here's what I saw:

When we display the energy of our students, the genius of our faculty, and the impact on the state's prosperity; when we fight for this University, we can help to put an end to the negative nonsensical narrative that higher education is somehow losing its worth.

In fact, our value—and our Return On Investment—is greater than ever.

The tenets of our Minnesota traditions—of serving the common good in a socially responsible way—are more important than ever. The exceptional Minnesota Way must guide us on a smart and steady road.

With what we do here now, we can ensure that the state and the University of Minnesota remain vibrant, relevant, efficient, global, and diverse into next year, and into the next decade.

In our own way, we must proudly fight for that.

Thank you.

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