HRDCS - MMC Project Case Study 7 08.Pub

8/14/2019 HRDCS - MMC Project Case Study 7 08.Pub

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THE CHALLENGES OF STRATEGIC PHILANTHROPHYAT MEHARRY MEDICAL COLLEGE, FY 2002

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MEHARRY MEDICAL COLLEGE TEAM BUILDING CASE STUDY

Case Project Written by:

Charles J. Hicks, II, Ph.D.

HRD Consulting Services

Perspectives on Meharry Medical College

Founded 125 years ago, in 1876, Meharry Medical College is an internationallyrecognized leader in health professions training and health disparities research among

African Americans and other underrepresented minorities. Located in Nashville,Tennessee, Meharry is a private institution comprised of four professional schools:Medicine, Dentistry, Graduate Studies & Research, and Allied Health. Meharrys threecore businesses are teaching, research, and the clinical enterprise. The total enrollmentis 910 fulltime students.

Meharry has operated with a low tuition revenue base (reflecting its mission),subsisted with modest levels of annual gifts and a small endowment (reflecting ahistorically undercapitalized research infrastructure), and supported a patient careenterprise that required institutional subsidies rather than contributed to the financialhealth of the College (reflecting both its mission and inadequate public funding support).With small to negative operating margins, no operating reserves, and a meagerendowment, Meharry frequently found itself petitioning others for financial support inorder to survive.

Today, an academically strong, fiscally sound, well managed, and visionaryMeharry is poised for its most far-reaching advancement in years. Meharry has clearly

defined its niche and aggressively is seeking new friends, strategic partners, andinvestors.

Uniqueness of Meharry Medical College

The Colleges primary mission of training African American health professionalsdistinguishes it from the vast majority of educational institutions. Specific numbers bestillustrate Meharrys achievements: The College has graduated more than 3,400physicians and over 1,200 dentists over the last fifty years. These providers areculturally sensitive professionals who are committed to providing care to theunderserved. Over 50% of all graduates work in underserved urban centers and ruralcommunities, caring for economically disadvantaged people who lack access to quality,

affordable services.

Current Capability (strengths) and Risks (vulnerabilities)

The Educational Enterprise at Meharry has always operated with a low tuitionrevenue base, by choice. Meharry has a very small endowment, only one-tenth the sizeof the endowments of the average of all U.S. medical schools. The College receives amodest level of annual, unrestricted gifts from its alumni and friends.


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The absence of endowments for faculty positions, student financial aid, and keyinfrastructure components such as the library, that are found in most private academichealth science centers put Meharrys educational enterprise at a distinct disadvantage.Meharrys financial structure is actually more similar to that of a small public college,

without the usefulness of a state government appropriation. Meharrys educationalrevenue base has been and continues to be dependent on Title III funds from the U. S.Department of Education, and Centers of Excellence funds from the U. S. Department ofHealth and Human Services.

Consistent with its mission, Meharrys Clinical Enterprise has focused primarily onproviding care to Medicaid and uninsured patients. Until recently, Meharry did notreceive public support from local or state governments to help subsidize indigent care,nor did it have higher forms of reimbursement to cross-subsidize uninsured indigentpatients or to support education and research missions similar to that at most academichealth centers. Today, Metropolitan Nashville General Hospital is located on Meharryscampus. The clinical faculty of Meharry provides the physicians who are staff at MNGH.

The Research Enterprise suffers from a number of shortcomings. First, small tonegative operating margins and results force Meharry to use scarce unrestrictedphilanthropic gifts for operating expenses rather than applying those revenues towardendowment or other forms of investment in the research infrastructure. Revenuelimitations -- in particular, endowment and clinical income -- also have prevented pursuitof attractive grant opportunities. Many RFPs are unanswered because Meharry cannotgenerate required philanthropic matching funds or institutional support.

Proposed Five to Ten Year Strategic Philanthropic Initiative

Historically Black Colleges and Universities (HBCUs), including Meharry MedicalCollege, have sought philanthropic support not as a strategic objective to assureexcellence, but as a tactical necessity in order to stay open. The pursuit of strategicobjectives, based on comprehensive financial planning tools, is a relatively recentphenomenon at HBCUs.

The best strategic fundraising occurs when the importance of raised monies isunderstood as one contributor to the overall financing of an institution, as opposed tobeing viewed as the icing on the cake. Presently, Meharry has an endowment of $69million of which $25 million is invested in marketable securities. Academic institutionsconsider their restricted and unrestricted endowments as reliable sources of funds tohelp finance the entire range of their operating needs. Furthermore, most academic

institutions strive to establish the level of endowed funds at 2-3 times the size of theiroperating budgets. The fiscal year 2002 operating budget at Meharry is $102 million.

The proposed strategic philanthropic initiative is to increase Meharrysunrestricted and restricted endowments to $300 - $350 million over the next 5-10 years.In 1997, Meharry embarked on a seven-year campaign to raise $125 million. To date,$65 million has been raised and $50 million in cash has been received. Of the $50million in cash received, $16 million has been added to the endowment.


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OVRERVIEW & STATUS OF CONSULTING SERVICES

Given Meharry Medical Colleges history, uniqueness, the current capability of itsthree Enterprises, the promise of its overall future relied heavily upon the

leadership demonstrated through the Division of Institutional Advancement insuccessfully implementing and achieving the goals of the proposed five to tenyear Strategic Philanthropic Initiative as outlined by Garvin S. Maffett, Ed.D, VicePresident of the Division of Institutional Advancement. First, since January of2002, the Division of Institutional Advancement had undergone a reorganizationin the composition of the senior management staff, and as well, in itsorganizational structure. The organizational structure and senior managementstaff composition both reflected a leadership commitment and a state ofpreparedness for addressing the future challenges and requirements forimplementing and achieving the goals of this Strategic Philanthropic Initiative.

Secondly, to facilitate the Divisions transition, two team-building sessions wereconducted to assist in preparing a state of readiness for change; assist in theinfusion of new staff members; enable the operation of the new organizationaldesign; and, to immobilize the teams commitment for the revised Divisionalvision/mission statement, the new ground rules for staff engagement, and thecurrent campaign goals. In addition, the Team Retreats were used to buildsupport and begin the process for formulating and launching a five year strategicplan that will be backed-up with annual operating plans for each of the fiveDepartments within the Division of Institutional Advancement.

Thirdly, a new set of performance indicators were identified that would be usedto monitor progress against the targets of the Strategic Philanthropic Initiative.Those performance measures were: Return on Assets, Profitability, SalesRevenue Generated, Market Share, Quality of Service/Products, and EmployeeSatisfaction.

Fourthly, each Department would have in place an annual operating plan withkey performance indicators that would drive team and individual performanceoutcomes. These plans would detail specific measurable performance indicatorsthat are linked with team and individual performance targets. In addition, aparallel financial incentive system would be formulated whereby Divisionalindividual and team performance standards will be integrated into Meharrysperformance appraisal system and linked to each employees annual individualperformance plan. The intent of this system was to differentiate between thoseperformance standards that meet expectations from those that exceedexpectations, emphasizing a performance based criteria that rewards forresults delivered vs. the somewhat usual criteria that emphasized rewards for


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the level of effort dispersed. It is also necessary for management todifferentiate and highlight the rewards for results derived through team effortsas well as the achievements derived through the individual initiative of individualteam members.

To establish a benchmark for monitoring the progress of Divisional and Teamperformance against goals over time, an additional management tool was putinto place. The Denison Organizational Culture Survey is a diagnosticmanagement tool that aligns leadership strategies, team performance, andorganizational culture traits to bottom-line financial performance measures. Thisinstrument was administered to the full staff, and given the 88% completion ratea presentation of the report was made to the Senior Management Team for theirdiscussion, review, analysis, strategy planning, and implementation.

This report provided a baseline benchmark that compares the Division with otherhigh performing organizations whose profiles are found in the third and fourthquartiles. As well, it provides a diagnostic analysis of the Divisions currentcapability and potentials, strategic leadership insights, identification of strengths,the critical management levers, and the team initiatives that would provide anopportunity for realizing the desired performance standards at the departmental,team, and individual levels in the Division of Institutional Advancement. As such,to date, this process has provided the leadership of the Division of IA with acontext for doing strategic and operational planning, a database for strategyformulation and deployment, a process for energizing a cohesive team, and agame plan for creating and managing the desired future of the Division.

These interventions were designed to have an impact at the management, team,and operational levels within the Division of Institutional Advancement. Thequantified benefits of this series of organizational interventions were projected torealize a 30% improvement factor across the Division and it was anticipated thatthis would begin to be realized during the second and third quarter of FY 2002.Such improvements should be observable and measurable and are likely to beginmanifesting in both behavioral terms (team cohesion and individual staffmembers drive for results) as well as in quantifiable measures regarding dailyinternal operational efficiency (innovative problem solving, advance planning,

and increased efficiency in meeting deadlines) within the Departments of theDivision. Since this expectation was declared at the outset, the recommendedgo-forward strategy was for the Senior Management Team to discuss and clarifytheir expectations with their team members, and to define and set improvement(stretch) targets/goals that would be tracked and monitored as an overallmeasure of the Divisions operational performance and effectiveness on a daily,monthly, and quarterly basis.

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HRDCS - MMC Project Case Study 7 08.Pub