Hopelessness is a powerful thing. It is hard to hear bad news; harder to accept a bad situation; hardest when you don’t know what to do. Sometimes it’s easier to try and avoid the problem in the first place.

Problem is – there’s an elephant in the middle of higher education’s living room. It is growing every day, and it’s too big to ignore. Our institutions face financial problems for which all their years of experience have not prepared them.

Leaders are in situations they find baffling. How did it happen? What could have been done to avoid it in the first place? Who is to blame?

Answering these questions is not the most productive approach according to Burt Peachy who says that the situation is real and it’s not gong away. Instead of trying to answer those questions he offers a solution for getting academic institutions on the right path for the future.

Peachy - a prominent leader in quality improvement in higher education and Staff Administrator of CQIN (Continuous Quality Institution Network) – recently spoke with The Digest about this financial crisis and a new way to think using business as a model.

The Digest: The last couple of years have proven to be a real financial challenge for businesses in the U.S.  Are colleges and universities having an equally tough time with the economy?

Peachy: These are the toughest times for colleges and universities I’ve seen in my 30 year career. Some universities have been budget cutting for the past three years. One institution was forced by circumstances to lower their operating budget 33%.

The Digest: Specifically, how does a severe budget crunch impact a college administration?

Peachy: There are a number of ways.

First, it puts the administration in crisis mode. By fixating on the budget, every hour of every day, the administrators lose sight of the whole picture.

Second, it creates a “survival of the fittest” environment mindset. Departments compete with one another and jockey for position, more than ever. It is not enough to just present your case; some take this opportunity to undermine other departments. This puts everyone on the defensive.

Third, it affects morale. Administrators are just putting in their hours, lacking the enthusiasm to go to work. In this climate, the entire staff feels hopeless. They see themselves as victims of the economy and/or legislatures.

The Digest: What should they be doing instead of focusing on the budget?

Peachy: In hard times we should be rallying together and supporting each other instead of doing the opposite, with lots of back biting and blaming.

Here is a little secret that some of the CEOs have shared with me about these budget crunch times. If the situation could be addressed dispassionately, it would allow institutions to change process and policy that enables increased productivity. Doing more with less is really about addressing sacred cows and vested interests to redistribute resources for future gain; we should be focusing on eliminating non-value-added processes.

The Digest: Are all colleges and universities going through these economic crises?

Peachy: Despite the tough times, some universities are surviving and thriving. What these colleges and universities have in common is a commitment to quality, to honest value-added priorities and to maintaining vital programs and services. At CQIN we look outside the box and examine what successful businesses have done during tough times.

The Digest: Why is it difficult for colleges and universities to think like businesses?

Peachy: In the 70s, many administrators could not see how business practices, such as total quality management, applied to the academic community , since most quality programs were being applied in manufacturing environments. A common response to the concept of zero defects was “that student outputs cannot be controlled.”

I’m not getting the same resistance to quality programs that I used to. Colleges and universities know they have to make changes in order to survive; that synergy must occur. There is much we can learn and adapt from the business community.

The Digest: What lessons can administrators learn from businesses?

Peachy: Think quality, make improvements, be creative, and plan for the future. Let me share a couple of specific examples:

• Successful businesses have made quality improvement a moral imperative. This principle was exemplified by the Ritz Carlton, the only two-time recipient of the Malcolm Baldrige National Quality Award in the service category. In 1992, the recession hit the Ritz Carlton Hotel hard. Training positions were being cut across the hotel industry. Despite the layoffs, Ritz Carlton president and chief operating officer Horst Schulze knew he needed a quality manager and trainer in every hotel. In 1995 he said, “I knew quality helped us and knew I risked getting fired. If you can make a hotel better, you have no choice but to do it.”

• Take advantage of the down time and make improvements in quality of services. This lesson comes from the Container Store, which has been at the top of Fortune Magazine's annual list of "100 Best Companies To Work For" four years in a row. During January, their slowest month, they conduct a massive quality blitz. They review every idea and implement the ones that make the most sense – all during their slowest time.

• When the market is slow is an ideal time to devote resources to research and development. What do you think the companies in Silicon Valley are doing now? They aren’t sitting idle; they’re taking steps for the future and carving out new niches, creating new products and developing new markets.

The Digest: What can academic institutions be doing now, to prepare for better times?

Peachy: It’s an ideal time to conduct a systematic quality assessment (SQA). The SQA reports on the bottom line:

1. What is our core enterprise?

2. Who are our constituents?

3. What are their expectations of us?

4. How are we performing currently against those expectations?

5. Where are the gaps?

6. What actions do we need to take right now?

In this way you learn what your quality processes are. Assessments lead to opportunities. By getting people together now and preparing for the future, you can position your entire institution for better times. So when resources improve, everyone knows what to do.

The Digest: How do you create a culture focused on quality?

Peachy: With the systematic quality assessment, departments work collaboratively using their collective diversity and knowledge. Their survival depends on it. From the position of crisis, departments become quality-focused and good things emerge.

The Digest: How does this restore hope?

Peachy: In his book, Let Your Life Speak, author Parker Palmer talks about individual reformation. But his concepts are also applicable to our institutions as a whole. He uses Rosa Parks as an example. When she refused to sit in the back of the bus, “she was no longer going to be an accomplice to her own diminishment.” She was no longer going to accept that position.

Palmer says that we all have to “get to the front of the bus.” Quality puts colleges and universities in the front row, creating hope – which fosters the desire in people to make improvements. It only gets better. It’s working for some institutions right now and it should be working for all of higher education in the future.