MnSCU change expert’s $2 million contract raises questions
The $2 million contract with McKinsey & Co., though, comes as a surprise to students and faculty actively involved with Charting the Future, MnSCU’s bid to spur innovation and collaboration among its 31 campuses.
Chancellor Steven Rosenstone did not bring up the arrangement with New York-based McKinsey when students asked about Charting the Future’s costs or when he updated the Board of Trustees about the initiative.
“That seems like a detail that should have been made known to all stakeholders in this process,” said Kari Cooper, who leads MnSCU’s university student association.
Rosenstone said McKinsey brought invaluable knowhow to a long-overdue, high-stakes push for change — one he believes will pay off in major savings for students and the state. He said MnSCU honored the company’s preference to stay away from the spotlight.
“We’ve accomplished a lot in a few short months,” Rosenstone said. “We were able to do that because we got some help.”
But leaders on the Minnesota Legislature’s education committees say the McKinsey contract poses questions: Did the system get the best deal, given a relatively narrow window companies had to pitch their services? Is MnSCU’s spending threshold before requiring board approval of vendor contracts too high?
MnSCU policy calls for board approval only for vendor contracts of $3 million or more. At the University of Minnesota, with almost twice the operating budget, the cutoff is $1 million.
MnSCU is already under scrutiny over last October’s quiet approval of a new contract for Rosenstone; even some trustees did not learn of it until eight months later.
Gene Pelowski, D-Winona, the head of the House higher education committee, and Terri Bonoff, D-Minnetonka, his counterpart in the Senate, said they will push for changes to increase transparency and board oversight at MnSCU.
Developed with input from students, faculty and administrators, Charting the Future spells out broad goals in areas ranging from student access to coordination among campuses. Eight implementation teams will propose specific ways of accomplishing these goals.
Rosenstone has stressed MnSCU — with more than 430,000 students, the fifth-largest such system nationally — sorely needs change to adapt to a rapidly changing higher education scene. He has pledged students, faculty and other campus players on the implementation teams will drive the process.
MnSCU solicited proposals from consultants specializing in managing change in December, roughly a month before the Board of Trustees green-lighted Charting the Future. Two companies submitted pitches during a Dec. 23 to Jan. 7 application window.
While trustees did not vote on the McKinsey contract, Rosenstone said he consulted with the board’s then-chairman, Clarence Hightower.
Since March, McKinsey compiled extensive research, provided training for administrators and prepared timelines for the eight implementation teams. It offered guidance in setting priorities for the initiative and helped craft a “change story” to communicate about the work.
“They brought a discipline to the process; they brought a wealth of experience,” said Rosenstone.
Meanwhile, four of the implementation teams and a steering committee that will oversee their work started meeting. Reviews are largely positive.
“Students have experienced a welcoming environment and a sense that student input is a top priority,” said Kayley Schoonmaker, chair of MnSCU’s college student association, who is especially excited about plans to streamline the transfer of credits among member institutions.
Cooper, of the university student association, concurs. An engagement team will visit all 31 campuses next school year to get student input on the first batch of ideas.
Connie Gores, president of Southwest Minnesota State University, said her team on Student Success has discussed how to best define success, how to measure it and how MnSCU might emulate successful practices nationally. She found the McKinsey training she attended extremely helpful.
Even MnSCU’s university faculty union, which has voiced concerns about Charting the Future, says early reports are reassuring.
“Faculty are reporting they are encouraged to participate and have a chance to express their ideas,” said Jim Grabowska, who took over the union in July.
But student and faculty leaders, who sit on the steering committee, said they don’t understand why they never learned of McKinsey’s role or took part in its training.
Cooper says association members asked Rosenstone about expenses Charting the Future is incurring during an April meeting. Rosenstone brought up staff time and stipends for students and faculty on the implementation teams.
“No mention of McKinsey was brought up when we point-blank asked,” Cooper said.
Rosenstone said MnSCU did not publicize the McKinsey contract because the company prefers to “work in the background.” He also said student leaders did not explicitly ask if the system had engaged an outside consultant.
MnSCU says it is important to consider the potential savings for students and the state if Charting the Future succeeds. For instance, if only 10 percent of MnSCU students graduate faster, the system estimates $14 million in annual savings to its graduates and their families.
“We recognize that the decision to spend $2 million is a lot of money, and we made it very carefully,” Rosenstone said.
McKinsey completed their work in June. A spokeswoman for the company said it does not comment on specific projects but pointed to its experience with higher education institutions.
MnSCU Board Chair Thomas Renier did not respond to a request for comment.
This spring, MnSCU also hired Minneapolis-based PadillaCRT to help the system improve its brand and communicate better about its academic offerings. MnSCU will pay up to $185,700 for services and $83,950 for expenses.
Meanwhile, Bonoff and Pelowski said they are working on legislation that would require the MnSCU Board of Trustees to publicly approve future chancellor contracts.
A critic of overhead at MnSCU and the University of Minnesota, Pelowski questions the lack of public airing of the McKinsey contract and the need for such a sizeable investment: “Do you not have enough administrators that you have to hire somebody for $2 million to figure out how to chart your future?”
Bonoff says she sees the value of enlisting outside expertise. She is a vocal supporter of Rosenstone’s push for change. But she says the McKinsey contract lays bare “gaps in our law in terms of oversight and transparency.”
She would like to see board approval, a heads-up to the Legislature and a consultation with the state Department of Administration for contracts larger than $1 million.
“With a $2 million contract, if I were in the chancellor’s shoes,” Bonoff said, “I would want the board to be by my side.”
The Pioneer Press is a media partner with Forum News Service.