UNC inspires peers to consult

Last year, University officials turned heads with their decision to hire Bain & Company, a global business consulting firm.

Now, universities nationwide are following UNC’s example by hiring consultants to help deal with administrative organization and unprecedented budget deficits.

Bain & Company concluded its study at UNC this summer — funded through an anonymous donation — and found that the University was administration-heavy and decentralized, which added costs and made day-to-day operations less efficient.

 The firm’s work at UNC has prompted universities such as Cornell, University of California-Berkeley and Yale to hire external consulting firms as well.

“We are excited to see that we are the lead on this,” Chancellor Holden Thorp said.

“I talked to the chancellor at UC-Berkeley. He said, ‘You’re a year ahead of us.’ It feels really good when the chancellor at Berkeley says that,” he said.

Cornell hired Bain & Company after hearing about their work with UNC, and UC-Berkeley officials are in the middle of negotiations with a consulting firm.

Although UC-Berkeley officials won’t release the name of the firm, Christopher Kutz, chairman of the faculty senate at UC-Berkeley, said they were impressed by Bain & Company’s experience in working with higher education.

“You can draw your own conclusions from that,” he said.

David Harris, deputy provost for Cornell University, said they hired Bain & Company to help them deal with an unprecedented deficit of $200 million or more.

“We are facing challenges we have never faced in our lifetime. We need expertise to deal with our particular problems,” Harris said.

“I’m not that old, but people who are 60 or 70 say they’ve never heard of deficits of this magnitude.”

Universities are also hiring the firms rather than using internal resources because they save time and money in the long run, Kutz said.

“Outside allies have a fresher perspective. An inside decision with an outside hand can make implementation more successful.”

Kutz said UC-Berkeley decided to hire a consulting firm in response to a $150 million budget deficit and a 20 percent budget cut.

Both Cornell and UC-Berkley are using university funds to pay for their studies.

Thorp said the trend of universities hiring external consulting firms could have a great impact on higher education.

“I was surprised when the Bain people said, ‘We are leaving here to go to Ithaca.’ But now, I’m not surprised that Berkeley is doing the same thing,” he said.

“What we’re seeing now is great universities of America figuring out that we need to change the way we do business and not just tinker around the edges.”

Harris said that, as at UNC, people at Cornell were skeptical about hiring Bain & Company.

“People are asking a lot of questions, but I expected this because it’s something new,” Harris said.

Despite the skepticism, Kutz said he expects a lot more universities to follow in UNC’s footsteps.

“Ideally, it’ll give higher education more choices and help universities in getting more bang for their buck,” he said.

Thorp said the budding trend is a reassuring sign for all those who were skeptical of his decision last year.

“It’s good for people to see that you couldn’t even go to Cornell to escape this,” he said.

Although the main reason universities are hiring consulting firms now is to help them deal with budget cuts, Thorp said he had other reasons in mind when he hired Bain & Company.

“When I decided to accept the Bain study, I didn’t know the financial crisis was going to be as bad,” he said.

“I’ve focused on making employees feel more satisfied. I felt if we had a group like Bain look at our organization, it could make our employees feel more important about the work they do.”


Contact the State & National Editor at stntdesk@unc.edu.