No across-the-board retirement incentives, wage freezes or hiring freezes are planned as MIT works over the next three years to trim its operating budget.
Those administration positions and others were spelled out last week in answers to more than 30 questions posed at an unprecedented open forum devoted to MIT's fiscal situation. An estimated 400 members of the community attended.
President Charles M. Vest presided at the two-hour "town meeting" in the Student Center's Sala de Puerto Rico. With him were Provost Mark S. Wrighton, the Institute's chief academic officer, and Senior Vice President William R. Dickson.
Those attending also learned that:
1-President Vest will appoint what he called a "blue-ribbon" panel to study how MIT's Medical Department should be shaped to meet the future needs of the community in the context of the evolving national health-care plan. He expects the study will take at least a year. The panel will have outside experts as well as campus representation. President Vest disclosed plans for the study in replying to a question of how the budget crisis will affect the Medical Department.
The Medical Department, which recently received reaccreditation with commendation, is "quite unique," Dr. Vest said, in that it is one of a very few, other than at universities with medical schools, which provides medical care for an entire campus community. The Medical Department, he said, "has become an important part of our lives." Reaccreditation with commendation is received by fewer than four percent of the approximately 1,800 hospitals surveyed each year.
2-A task force headed by Vice President and Treasurer Glenn P. Strehle has completed a review of potential new sources of revenue, which the administration is studying.
In replying to a question about what MIT is doing to raise revenue, Dr. Vest reported that gifts to MIT have continued at nearly the same pace as during the successful and recently concluded $700 million campaign. "We are very proud that the giving rate has not declined since the campaign ended. We are all working very hard on that and we will continue to work hard," he said.
3-A review of faculty tenure and promotion policies, which was to have been headed by Associate Provost Sheila E. Widnall, now on leave to serve as Secretary of the Air Force, will be undertaken with the involvement of Professor Robert L. Jaffe, chair of the MIT Faculty.
The administration's earlier announcement that it was aiming at a workforce reduction of about 400 people in three years gave rise to the question about retirement incentives. Professor Wrighton said that merely reducing the overall head count at MIT is not consistent with the goal of reshaping the Institute for the future by reengineering basic administrative processes. Another reason the administration rejected across-the-board retirement incentives, he said, is that such a move often encourages the departure of highly talented people.
In opening the meeting, Dr. Vest said that MIT was not alone in finding itself in a budgetary vise. Nearly all institutions are facing similar constraints, he said.
As MIT looks to the future, the president said, there are three points driving the need to focus attention now on the fiscal situation.
1-The budget can't be balanced by "increasing tuition charges to students and their families at a faster and faster rate. We went through a decade of doing that and we can't expect that to continue."
2-It is vital not to underestimate the impact of changes by the federal government in how it pays the indirect cost of research. MIT is facing, but has succeeded in delaying until 1999, the implementation of a costly federal change that affects how compensation for research assistants and teaching assistants is charged, and in the future "we are going to see more constraints on federal funding."
3-"We can't be responsible for forcing on the future MIT community a truly severe financial crisis by continuing to grow deficit spending."
Dr. Vest began the meeting by asking the audience to voice their concerns as he made a list. Among the issues raised and the responses:
Employee burnout, possibly to be suffered by those in a downsized workforce who will have to do more.
Professor Wrighton said a key goal of reengineering is "to take out the work that we don't need to do." Vice President Dickson said the goal is to simplify procedures. "If we have fewer folks, it won't be a case of doing what we do now, plus. We'll be doing it better, more interestingly and smarter."
Decentralized vs. centralized administration.
These are relative terms, Dr. Vest said. In many ways MIT is very centralized, compared with other institutions, less so in other ways. The reengineering review will take an Institute-wide view, he said, and while centralizing all operations is not a goal, "we will work across traditional boundaries." This is already happening intellectually, he said, in many joint programs.
Parking and transportation costs.
Mr. Dickson said the Planning Office has been conducting a study of this issue for the Parking Committee which will make a proposal soon to the Academic Council. There has also been discussion, he said, of combining a parking policy with a "transportation policy" under which the Institute might subsidize to some extent the purchase of T passes to encourage the use of public transportation.
Morale-worrying about layoffs.
Dr. Vest said that morale will depend on those in the community and their attitude toward what needs to be done. "If you can view this as a challenge, not a problem, if we can all roll up our sleeves and all participate, we can keep morale high." Reshaping MIT for the future will be highly exciting, he said. "There'll be a lot of bubbling and perking going on."
The MIT president said experts on how to downsize organizations fall generally into two schools. "One school of thought says just do it. Don't talk about it. Do it and move on." The other extreme, he said, calls for artificially creating a crisis to drive the needed change. "I reject both of those extremes. The only way I know how to operate with people is to be honest. That's why we had a special issue of Tech Talk. That's why we're having this meeting." MIT, he said, is the kind of community "that understands the real world, understands change. All I can do is ask you to work together with us and also to understand that those of us at this table and other administrators feel very deeply and personally about you and will do our best to minimize pain, but we all have the responsibility to keep the Institute strong."
The role of seniority in layoffs.
Mr. Dickson said that union contracts would govern layoffs in bargaining units. Where there are no contracts, the Institute would look at many factors, length of service being one of them, but also the particular set of skills an employee possesses and whether the person can be trained for other work. He added that reducing 400 positions over three years is not expected to require that many layoffs, given the turnover at MIT, which he said is greater than many think.
Has MIT looked at "outsourcing" of services?
MIT will look "very carefully" at this option, Mr. Dickson said, but "there is no wholesale movement to outsource all that we do."
How do we define and measure success in this effort?
Dr. Vest, saying that this was probably the most important question asked to that point, said one measure of success is meeting the target for reducing the operating budget. The ultimate measure, he said, will be an affirmative answer, after changes are made, to this question: Are we still the preeminent institution in the world largely focused on science and technology?
In replying to other questions asked from the floor during the last few minutes of the meeting, MIT's key administrators said:
��������� It is not planned to increase Physical Plant staff when the new biology building opens. Operational needs there will be met by reallocating resources.
��������� Administration officials would be willing to discuss further the suggestion of a post-doctoral fellow who urged that the Institute allow post docs and other nonfaculty staffers to be principal investigators on research projects as a means of securing more funds for MIT.
��������� No decision has been made on which outside experts may be retained to help the reengineering process, which Michael Hammer, co-author of the book Reengineering the Corporation: A Manifesto for Business Revolution., outlined at a day-long seminar at MIT last month.
��������� There is no already drafted procedure to follow in deciding on which positions to eliminate. The goal, Dr. Vest said, is to solve problems, not just to cut jobs.
A version of this article appeared in the December 8, 1993 issue of MIT Tech Talk (Volume 38, Number 17).
