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Measuring the Unmeasurable

Outgoing President William R. Brody speaks on higher education, Johns Hopkins, and running a business that isn't a business.

By Dale Keiger

For the past dozen years, William R. Brody has been Johns Hopkins University's 13th president. His successor has yet to be named (at least not by press time), but whoever No. 14 turns out to be, this much can be said: His or her hands are going to be full. The challenges are many and daunting. Stiff global competition for students, faculty, and funding. An institution that needs to generate a margin to sustain itself but has at its core a mission that inherently loses money. That cannot operate like a business yet has to be managed with the efficiency of a business. That has a constant need for more and more money but no metrics for return on investment, no satisfactory way to assess the value of what it produces or the gains that derive from changes in its operation. Johns Hopkins Magazine recently engaged Brody in one last conversation before he retires, a conversation on one of his favorite topics: higher education.

You have expressed concern for the viability of Johns Hopkins' model of higher education.

The institutions are going to survive, one way or the other. But the current model — if you went to a Johns Hopkins class circa 1900, and you went today, probably the only difference would be today we have PowerPoint. It would look exactly the same. If you went into an automobile plant in 1900 and today, you wouldn't recognize that you were in the same place. Almost every other aspect of society has employed technology to reduce the labor content needed to produce a unit of service. The labor content of a car is dramatically lower today than it was 50 years ago or 100 years ago. If you look at the true cost — forget tuition — the true cost of higher education today relative to an entry-level Ford, it is much higher today than 25 years ago or 50 years ago, and the reason is we haven't done anything to reduce the labor content. It's not that we're stupid. Let's say I own a Ford plant, circa 1950. I can measure the output of what I do exactly. I'm going to invest in robotics and technology and automation and all these things, and when I do that, I can measure what I get out of it in terms of quality and cost.

Now, if I employ technology or change class hours or class size, how do I measure the [effect on] quality of what I've done? I can do standardized testing, but we all know that's fraught with problems. Do I measure the quality [of education] when students graduate, or do I measure it five years out, or 25 years out, or 50 years out? Do I measure their financial performance? Or do I measure career performance? If Hopkins adopted a dramatically different model for higher education — and I don't know what that is — we might find ourselves with nobody wanting to come.

At some point, higher education is going to price itself out of the market. Tuition doesn't reflect the entire cost of education. Places like Princeton or Harvard, which have enough endowment they could give free tuition, will be fine with the current model forever, if they want to continue it, because their endowments will grow faster than the consumer price index. But if you're most other universities, you are dependent on tuition revenue. If that doesn't move fast enough, you're going to have challenges.

One Dozen
Brody Years


There are really only a few solutions. One is to raise more endowment. Hopkins has been doing extraordinarily well in fund raising. The second is to operate more efficiently. You can figure out how to deliver the educational content in a different way and make sure your administration is operating very efficiently. We've certainly focused on the latter. We've not been focusing on the former [how to deliver educational content]. Nobody is in higher education, at the big universities.

One thing about education and information is it costs a lot to develop and deliver the first copy of it, but subsequent copies are less expensive. So you can distribute the same material to different audiences. You can develop a course in Shakespeare for undergraduates, which is delivered in a low student-to-faculty ratio with all the interaction you want. But you could then develop the same course to give to larger audiences for an evening course, and you could put it online and offer it internationally. With the tremendous change in demographics and people moving into retirement, you're going to have a tremendous opportunity to do that.

One of the challenges is there's very little money for research in education. We don't have a National Institute for Education.

What if we find that the only good way to do it is a professor at a table with eight students?

Well, there are only a couple of things that can happen. If you assume that you can't find enough people who can afford to buy the product, you have to reduce the price or give more scholarship aid. Then you'll see everybody's salary taking a cut or you'll see universities shedding athletic programs and music programs, just like the public schools had to do to make ends meet. That's certainly possible.

Some of this depends on the economy. If the economy is growing robustly, these problems largely disappear. But if you have a long period of stagflation, recession, or even possibly a depression, you could have significant challenges.

You're well aware of how a conversation like we've just had, using terms like "return on investment," "the market," "labor content," and "buy the product," gives a lot of people in higher education the jitters.

Well, we are a business but we're not a business. We're a mission-driven organization, and in a mission-driven organization, no margin no mission. It's very simple. You have to figure out how to generate a margin so you can deliver the mission. Education, research, and service are all activities that intrinsically lose money. That's why gifts and endowment are critical to make up the shortfall. At the same time, it's incumbent on nonprofit organizations to make business decisions for business reasons and academic decisions for nonbusiness reasons. You shouldn't confuse the two. I mean, if we were a for-profit business, we would close two-thirds of our departments. But we have to operate as efficiently as everyone else does in our society. So to carry out our mission, we need to make sure that whatever dollars we use are employed in an efficient fashion, but not using business metrics.

"We're a mission-driven organization, and in a mission-driven organization, no margin no mission. It's very simple." Years ago, a very wise [Johns Hopkins] trustee, Sol Linowitz, wrote a paper called "A University Is Not a Railroad." He pointed out the fallacy of using for-profit business metrics in looking at a university, and I steadfastly avoid that. But if you say, Do we do our payroll in the most efficient fashion? the answer is, We should, and if we're not we should figure out how to do it. As we're managing our network or our accounts receivables or whatever, we have to operate as efficiently as any company does. The reason you do that is so you have enough money to deliver the course content and carry out scholarly activities.

I can only emphasize wholeheartedly that if we aren't very careful about how we spend every dollar outside the classroom, we won't have a dollar to spend inside the classroom. One of the interesting things is there's not a lot of correlation between the size of the endowment and the performance of the university, which would lead me to believe that there are some universities that are pretty poorly managed. We have to be sure that we are using our precious financial resources in the most efficient fashion.

The other piece of it is we are in competition with other universities. If you don't believe that, just spend a day with our admissions office. Other universities spend a tremendous amount of money marketing to students. It is a much more competitive landscape than the sleepy days of the 1950s or '60s, where universities were less concerned about attracting the best and brightest students, and the rankings. You've got U.S.News & World Report in the middle of all this, which is creating, I think, a tremendous disservice to the public.

There's an arms race going on among universities because we all want the very best students, and we think making certain investments is important because our peers are making those investments. You didn't find that in the '60s.

The Brodys had a tradition of getting around on interesting vehicles to greet incoming freshmen on move-in day. What has changed?

It's the nature of society. I can't say why it changed. Why are [universities] in general investing so much in athletic programs across the country? Because the public wants it. The students want to go to a place that has rec centers and all the accoutrements, nice dormitories and things that weren't the case when I went to school. If 10 schools have it and one school doesn't, that school becomes disadvantaged in terms of getting the very best students. That's the nature of competition.

Competition isn't all bad. But it shapes the way organizations behave.

In competing for students, one inherent problem is that an institution of higher education is not really in the business of delivering a pleasant consumer experience. Properly done, a higher education often makes you uncomfortable. It messes with all your received wisdom and everything you thought when you walked in the first day.

Well, here's the problem: Universities do respond, in one way or another, to U.S.News & World Report, which is in part a popularity contest, looking at student graduation rates and satisfaction and alumni giving. So there is an aspect of the university that is at odds with this idea that education should be in some ways threatening, challenging. We don't have grade inflation [at Hopkins], and we continually get push-back from students. I've had parents, friends of mine, have their kids come for an interview and say they love the place, love the campus, but they don't want to come here [because] it's too hard. Now I actually happen to think that's a compliment. Education should be challenging. Do we change our position in order to attract more students? No. At least, I haven't, and I hope my successor won't. But there are schools that cater to the consumer evaluation. Absolutely. We've been fortunate to be in a relatively strong competitive position, and we've strengthened that position without having to change the core of our academic enterprise. But you can imagine a time when Hopkins would not be competitive, for whatever reason, and there would be enormous pressure to soften the educational offering to make it more appealing to the masses. That's a definite concern.

How much of a disadvantage is Hopkins at because — though the endowment is far more robust than it was 10 years ago — Hopkins has nothing like the huge endowments possessed by a handful of schools?

If we add a dollar to the financial aid package, we can tell you the change in yield, in the percentage of students who are admitted versus the ones who come. There is a correlation between financial aid and yield. Fortunately, at this point, it's not steep, but it's a definite correlation. It's an issue, but it hasn't been a major, defining issue for us. In fact, we've increased our yield and increased our number of applicants in the face of serious competition.

How has Hopkins done that?

A lot of things we've done on campus have made a big difference. Getting cars off campus, creating an environment that looks more like a college campus, creating a college-town environment in Charles Village, [building] the rec center, the arts center, the Interfaith Center, and beginning to talk more about Hopkins as a kind of place where undergraduates can take advantage of the world's largest research university. We've gotten some of the senior faculty stars more involved in undergraduate education. The public health major has been a real success in attracting undergraduates. So it's a variety of things.

How concerned are you about the future of the humanities?

The future of the humanities is always a challenge, although I'm more concerned about the future of the sciences. If you think about it, the cost of recruiting a humanities faculty member is the salary, and an office and secretarial support. But the cost of recruiting a science faculty has gotten enormous. You've got to provide laboratory space, equipment, support for graduate students, and support for the faculty member until such time as he or she can get grants. It used to be, when you came to Hopkins you came out of graduate school, and it took a year or two to get a grant. When I started, it was about three years to get your first grant. Now we're predicting that in many cases it might take five years [because] funding is tight. During that period of time, you've got to support the faculty member. In addition, the kind of equipment people are using is much more sophisticated and more costly. The cost to recruit a [science] faculty member has gone from a quarter-million dollars to probably half-a-million to a million dollars.

"The future of the humanities is always a challenge, although I'm more concerned about the future of the sciences." There was a huge run-up of faculty members at all universities when the baby boomers came in, in the '50s through the '70s. Now many of those faculty are retiring. The economic challenges, I think, are going to be greater for renewing the science and engineering faculty than for the humanities. Research doesn't pay for itself. The research grant doesn't pay all the costs. Even for faculty who have grants, that doesn't pay 100 percent of all the expenses. In some ways, the more grants you get, the more endowment you have to have to offset those costs that are not covered.

I think the issue with the humanities is to continue to develop an appreciation for why it's important to teach something more than science and engineering. You might hear, "Why are we wasting our time teaching the classics or Near Eastern studies or philosophy?"

"What can you do with a philosophy degree?"

Right. The answer is that with a philosophy degree you can run one of the largest and most successful mutual funds in America, [like] Bill Miller, who is a philosophy all-but-dissertation PhD from Hopkins. I think people fail to recognize the value of the liberal arts part of education.

Can anything be done about that?

I think we have to live with that fact. I do think there is some data coming out of the neurosciences that show things like musical education at an early age, to take one example, leads to better brain development and cognition. It [humanities study] is not just fun, it has a purpose. If you look at people who are successful, they often have some broad background. They're not just narrowly focused in one field, in part because innovation or discovery or creativity in a field that might appear to be technical requires people who have broad vision. Steve Jobs credits the Macintosh computer to a course in calligraphy that he took, where he learned about proportional fonts.

Brody and former Peabody Director William Sirota duet at the 2994 Fall Festival

It's one of those things that will always be hard to explain. Sol Linowitz in his article, written in the 1950s, makes the point that you might have a Department of Persian Studies with a small number of students and be inclined to close the department down, only to find out one day that what's going on in Persia, now Iran, is of utmost importance. What we found after 9/11 is, Gee, why did we close all those departments that were teaching Arabic or Near Eastern studies or Islamic studies?

We can't do everything, but we have to maintain excellence in certain areas of the humanities, in part to impart breadth to our students, and in part to be a natural resource for the nation and for the world. Any part of the world may become of critical importance to our nation.

Johns Hopkins
Under Brody:
Bigger, Richer,
More Diverse


You've been here as president 12 years. Twelve years hence, what do you think Hopkins will look like?

I have no idea, but I hope people won't look back and say, "Boy, I'm glad we got rid of Brody and found somebody really great!"

I think one piece that we haven't really answered is the global aspect of the university. What does it mean to be a global university? My first answer is, "I don't know." We're probably the most global of any university in the world. Should Hopkins actually have full-blown campuses in other countries? Which would be an enormously challenging, difficult exercise, but in fact might be the right thing to do. I don't know the answer to that. Right now, when we've done something it's been through a division and it's been opportunistic.

IBM can decide to go to China and make computers and do that with the idea that they'll make a profit. Whatever they invest in China, they'll recoup. We can't go to China and make bachelor's degrees and do that for a profit. If you're a business school, you can go to China and do certain kinds of [programs], particularly executive education, and generate a margin on that to recoup your investment. But whatever investment we would have to make in China or India or Indonesia or Malaysia or Europe, we would need substantial support either from state government or from endowment to make it work. Now let's assume we had that support. Would we actually go and do that? There's a definite need for a school of public health in Africa. Many of the people who come from Africa to train, particularly at Hopkins, end up not going back to their native countries, in part because they find connections here and ways to advance their careers that aren't available there. So there's a kind of brain drain that occurs when they come over for education. Even if they return to their countries, they're not surrounded by enough other people or infrastructure to help them work. So we have long thought there's a need to set up a freestanding school of public health. It makes enormous sense, but would require a large grant to support that because it can't charge enough tuition to go anywhere near covering its costs.

Looking back at your tenure, was there anything that came as a real surprise to you?

How nice everybody is.


Yeah. How nice the faculty and staff are, how supportive everybody is of my doing well, and by that the university doing well. I've been to other universities that have a lot to offer, some of them as well known or maybe more well known in certain areas than Hopkins, but I haven't found the same degree of collegiality and commitment to the common good that I've seen at Hopkins. Does that mean we don't have territorial issues? Of course we have territorial issues! We have people who are competitive and want to do the best. But in the end, people at Hopkins really want the university to succeed, and they have been incredibly helpful and supportive. It's rather astounding.

Brody at 2004 Commencement with SAIS Dean Jessica Einhorn (center) and Ruth Bader Ginsburg, associate justice of the U.S. Supreme Court.

That's one thing that surprised me. The other is just to get an appreciation for the breadth and magnitude of what Hopkins does. It's truly extraordinary and something very few people know about, because we are so decentralized geographically and functionally that people on the outside tend to think of Hopkins as Peabody or Public Health or Medicine. They have a link to us, but they don't see us in the entirety of what we do. I was in the medical school, and I taught in the engineering school, but at a lower level you don't see Hopkins in total. The sum total of all is something that almost nobody other than the president gets to see.

You go to other places, particularly other countries, and you see the enormous respect that people have. I was in a meeting in India with the former president of India, who upon learning that I was in the audience began talking about Johns Hopkins and how they wish they had it and how they were trying to formulate a university like Johns Hopkins in India. In China, I went to the 90th anniversary of the founding of Peking University Medical College, which was the first Western medical school in China, and people there were talking about how they call Peking University Medical College "the baby Johns Hopkins." It's an amazing place to be with a lot of terrific people who are very dedicated to the mission of Hopkins.

What do you think people are likely to see as your biggest contribution here?

People will look back in 20 or 30 years and say what my contribution was or wasn't. Or what my shortcoming was. Who knows what the impact of all these things will be? We focused on a number of things. But my general thought goes back to a quote that comes from somebody else, which is, "Leave each campsite in better condition than when you found it." I think that's true for the university. People want to focus on fund raising and how much money you've raised, and to me that's important but that's not really the focus. I mean, my focus is on developing people and trying to develop a better sense of community, and bringing things together the way we've been able to bring the health system and the medical school together, or the way we've created a better sense of community on the Homewood campus. When I look at the people we've got in leadership positions, deans and vice presidents, I'm extraordinarily proud of the people we've been able to assemble. Organizations succeed because of people. It's not the name. It's the core values of the institution, and you have to have people who understand them and can live them and figure out how to allow the university to carry out those core values. To me, I'm most proud of the people that we have.

I also enjoy the interaction with students and seeing the growth of the student body. I think we've got a much more diverse student body geographically, academically, ethnically, and that's been a great thing to see.

Dale Keiger is associate editor of Johns Hopkins Magazine.

Go to "One Dozen Brody Years"
Go to "Johns Hopkins under Brody: Bigger, Richer, More Diverse"
Return to November 2008 Table of Contents

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