Wisconsin School of Business External Advisory Board
Fri, June 18, 2021
Thank you, Dean Samba, for that kind introduction, and thanks to all of you for joining today. Your advice, expertise, and generosity have helped WSB get through this very challenging year.
Over this past year and all of its crises, I have been reminded again and again of our good fortune to have alumni and friends who are deeply dedicated to supporting UW.
I am happy to tell you that we are planning for a more normal fall semester:
- We’ve vaccinated more than 40,000 people – members of the community as well as our faculty, staff, and students – that’s the key to being able to return in-person.
- The Union Terrace reopened to the public last month
- We re-started in-person tours last month and they immediately booked up – nearly 700 students contacted us in just the first 2 weeks to take a tour.
- Some of our best student tour guides are from the B-school.
- On May 8, we held commencement in Camp Randall Stadium. It was the first big in-person event any of our graduates had seen in over a year – you could feel their energy and excitement.
- We have a new athletic director – Chris McIntosh
While it’s been a relief to start thinking about being together in-person again on campus, we still face enormous challenges. I want to tell you about some of them, and about the opportunities I see moving forward, but first let me start in the right place with some good news from the year.
Good news at UW & WSB
We have missed a lot of what makes the university so special this year but we’ve also have had a lot to celebrate.
- UW-Madison is now one of the top 10 public universities in the country in graduation rates.
- And we’ve decreased the time it takes to get a degree – the average undergraduate now earns their degree in less than 4 years. Which also reduces student debt — 57% of our undergraduates graduated debt-free last spring.
- Thanks to the generous support of our alumni, we are able to guarantee – for the first time in our history – that every WI student who can qualify for admission and whose family makes less than the state’s median income will receive funding to cover tuition and fees for 4 years. One in 5 WI freshmen is now covered by Bucky’s Tuition Promise.
- BTP is a great complement to WSB’s BEL that has allowed us to compete on a national level for outstanding students of color who could go anywhere. Thank you for helping make this possible.
- We continue to be a hot school for new students. This year we’ve received 54,000 applications for about 7,500 spots in the freshman class – a new record.
- Some of the strongest demand we’re seeing is at WSB, where we’ve seen more than 50% growth in applications in the last 5 years.
- Admission is extremely competitive – acceptance rate for direct admits is around 24% this year.
- We are also seeing growing interest from students of color, both campus-wide and at WSB.
- The number of students in this year’s freshman class from underrepresented groups was the highest in our history and we anticipate that the next freshman class will be even more diverse.
WSB’s numbers are equally impressive.
- The initiative that began in 2017 to grow enrollment by increasing direct admits has helped us attract a much broader and more diverse pool of talent.
- The incoming class of direct admits to WSB is the largest and most diverse ever — 27% come from underrepresented backgrounds.
- Growing the direct-admit program also means most business students now spend a full four years at WSB instead of just two or three, which gives us a great opportunity to reshape the student experience and strengthen our reputation by investing in curriculum redesign … stronger career pathways … and infrastructure.
Looking forward: Innovating in a highly competitive environment
All of these achievements – both at the central campus level and at WSB are a part of a conscious strategy to both expand and improve the quality and reach of our educational programs. We’re doing this in three ways.:
- Expanding U/G class size while expanding quality at the same time
- Improving the quality and scope of campus offerings
- Moving more aggressively into the online space
I’ll say a few words about each of these.
#1 – expanding U/G class size: We are close to the end of a 5-year initiative to increase the size of the freshman class by about 250 students a year.
This is a way to respond to demographic shifts in WI that are shrinking the number of high school graduates, and a way to take advantage of a growing pool of outstanding out-of-state applicants. I want to emphasize that we are maintaining our strong commitment to WI students, and have been admitting a higher share of WI high school graduates in recent years than ever before.
At the same time, we’ve expanded our numbers of out-of-state students, where our pool has doubled in the last 10 years while also rising in quality. Applications from CA, NY, and NJ have been especially strong – to those of you from those states, thank you for continuing to talk up UW and send us great students.
#2 – Improving the quality and scope of campus offerings: We can’t just bring students in – we have to maintain and improve quality and we’re doing that with:
- Better academic and career advising
- New programs to improve diversity and make this campus a place where all people can feel that they belong
- And a sharper focus on educational excellence.
WSB has led the way with some really creative new curriculum options such as the programs leading from the BBA directly into a one-year master’s degree … and new degrees like the Master of Science in Business Analytics (MSBA).
- As you know, the MSBA launched just a few months before the pandemic hit – it’s never easy to get a new academic program off the ground, and we didn’t know what the pandemic effect would be. I am delighted to hear that the MSBA nearly doubled in size in its first year – and it’s on track to double again this fall.
One of the keys to creating vibrant new programs is bringing in outstanding new faculty.
- Last August we welcomed a record-breaking number of new faculty – including 6 in the B-School – and 10 more coming into WSB this fall. These hires have significantly increased gender and ethnic diversity at WSB – critical for maintaining a highly ranked program.
- Competing for outstanding faculty from underrepresented backgrounds is a priority campus-wide and at WSB. But it’s also a challenge.
- To help, we’ve created a program called TOP to help departments go after faculty members from groups that are underrepresented in their field. We’ve invested a lot of money in this program and it’s really helped us attract some faculty we wouldn’t otherwise have been able to hire. One of our newest hires – Aziza Jones in Marketing – is a TOP hire. I know Dean Samba and his team worked very hard to bring her in.
I applaud the Dean’s initiatives to create an environment at WSB that is welcoming and inclusive – I know there’s a new multicultural center in the works and a variety of other initiatives to ensure that every student we bring in will be able to thrive here.
#3 – moving more aggressively into the online space: Online options allow us to bring a UW-Madison degree within reach for more non-traditional undergraduates, which will be important as the pool of high-school graduates shrinks.
We have long taught professional master’s degree programs online and we successfully piloted our first online undergraduate degree program last fall.
We are introducing 4 new online undergraduate degrees this fall … and 3 of them are in the B-school (2 different BBAs in Business Management and a BBA in Marketing).
We’re making a major investment in this, but the rewards should be substantial as these programs grow over time and allow us to serve
I opened by telling you about some of our accomplishments this year. Perhaps the biggest accomplishment of all was to operate successfully through the pandemic. We transformed almost all of our operations – from how we teach to how we ventilate the buildings – to make it possible for us to welcome thousands of students who wanted to be in Madison. There were bumps along the way, but we responded quickly and we kept infection rates on campus very low for the entire year, after a first spike at the beginning of the fall semester.
Unfortunately, this health crisis also created a budget crisis. We have been dealing with a financial crisis bigger than anything we’ve seen in a single year. We project a loss of $320m, a combination of lost revenues + COVID expenses.
The biggest losses are in a few areas:
- Athletic revenues are down $50m;
- Our dorm and cafeteria revenues are down about $50m;
- And the state took $50m back at the start of the pandemic, requiring us to return budget money that had been allocated.
Much of our revenue will come back quickly in the fall, so this is primarily a short-term cash flow problem. But it’s a big problem!
Fortunately, we went into 2020 in a strong financial position, and we received some federal relief funds that were very helpful. We implemented a variety of cost-cutting measures – we passed along budget cuts across the university, and imposed a year of furloughs on all employees. And we used quite a bit of reserve dollars. With these measures, we’ve filled our short-term cash flow problem, but our employees will tell you it hasn’t been an easy year.
Of course, the legislature is now working on the state budget, setting our state dollars for the next two years. Given this past year, I was really hoping that the state would provide us with some new dollars to position us to move forward.
At the end of May, the Joint Finance Committee made their recommendations, which typically ends up being pretty close to the final budget. Unfortunately, they are recommending virtually no new dollars for higher education, which will make our recovery from the pandemic that much harder.
This underscores the importance of our work to build programs that fill an educational need while also generating revenue – and the importance of philanthropy.
I’m even more unhappy that they did not include any of the financial flexibilities that we requested.
- The first would allow us to borrow money for short-term operational purposes, something every other flagship university in the country can do and which is critical in a crisis.
- Example: Athletics has lost $50m. A loan from the campus would allow them to maintain a full staff so they’re ready to go when in-person events return.
- The second would allow us to invest a portion of our cash balances in safe, medium-term investments that earn a little return. This is $10m-$20m a year to us.
It’s possible that we might get a separate bill passed for the working capital investments, but it’s disappointing that none of this will be in the state budget.
The one piece of good news in the budget is that – after eight years – they are proposing the end the tuition freeze. Our in-state tuition is among the lowest in the Big 10. Both tuition and fees together are around $10,500. Minnesota’s in-state tuition is about $3500 higher; so is Illinois’; and Michigan’s. Now, we’re not going to raise tuition by a lot this year, but I do hope this gives us some options in the years ahead to move our in-state tuition closer to where it is in our neighboring states.
The primary issue isn’t tuition levels – it’s the tuition families have to pay. We’ve implemented Bucky’s Tuition Promise to assure low-income in-state families that their tuition will be paid. This should make it possible to ask higher-income families to pay a little more for one of the top public schools in the country.
After all of the challenges we’ve faced this year, it felt like a real gift to be able to send our graduates off with an in-person commencement ceremony last month. Among the many highlights was a moment during the introduction of the platform party – a number of university leaders had already been introduced to polite applause and then we came to Dean Samba, and the cheers from the WSB graduates echoed all over the stadium.
That says all you need to know about the affinity our students have for this school and its outstanding Dean.
Dean Samba has been a great leader. In just 18 months on the job and in the midst of a global pandemic, he has:
- Built a sustainable financial model for WSB;
- Created new programs that improve quality and raise the school’s national profile – including a set of strategies to achieve a top 10 undergraduate ranking (now #21, up from #33 in 2019);
- Despite uncertainty created by the pandemic, WSB demonstrated great resilience, working hard to connect students with companies.
- We had 86% placement of WSB undergraduates in 2020
- We anticipate the Class of 2021 will exceed 90%
- This says a lot about the reputation of this school, the quality of our graduates, and the networks you have helped us to build.
- It also says something about the Dean’s commitment to building stronger and better relationships with our stakeholders who see a thoughtful leader who listens to their ideas and concerns. And he’s earned a reputation as the ultimate good sport, whether he’s taking selfies with 500 incoming students or singing Bon Jovi tunes at online fundraisers.
In all of this, you have been our trusted partners – thank you for your dedication to the university and WSB. Thank you for making sure the school played a central role in the All Ways Forward campaign. We’ll be celebrating the end of that campaign this fall. It’s been our most successful fundraising campaign ever – I’m optimistic we’re going to end at $4 billion in new money raised. That’s going to be a game-changer for the B-School and the entire campus.
I want to see all of you on campus in the fall…for a game, for a visit, and for our campaign celebration. Thank you and I’ll be happy to take questions.