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Star Power

December 2017

By Margo Vanover Porter

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Lisa Frace and Sara Thorndike, recipients of the 2017 NACUBO Rising Star Award, are putting their talent and capabilities to full use at their respective institutions.

This year, NACUBO honored two individuals with its Rising Star Award, which recognizes outstanding professionals with high potential to succeed as executives and business officers in the higher education field.

Lisa Frace (left in photo), associate vice president for planning and budget, and chief budgeting officer at Arizona State University, has led her office for 12 years, and has been a key leader on major strategic projects, including the acquisition of the Thunderbird School of Global Management.

Sara Thorndike, associate vice chancellor for finance and controller at the University of North Carolina Wilmington, joined the institution in 2014, and has already redesigned the annual budget process and established a financial analytics department, among other initiatives.

In interviews with Business Officer, Frace and Thorndike discuss their achievements and more.


Culture Shift

“One of the biggest challenges in any merger is always, always culture,” emphasizes Lisa Frace, a key player in the recent acquisition of the Thunderbird School of Global Management by Arizona State University (ASU), Tempe.

“The Thunderbird faculty and staff had to adjust to becoming part of a large, complex organization with rules around procurement, accounting, and expenditures,” explains Frace, ASU’s associate vice president for planning and budget, and chief budgeting officer. “That was a big change.”

Why did ASU acquire Thunderbird?

Thunderbird trustees approached ASU in early 2014 to explore a potential merger. The private not-for-profit organization had been operating under a merger structure with Laureate Education, a for-profit operation. That merger structure was not approved by the accrediting agency, so the two parties decided to go their own ways.

Thunderbird was struggling financially and faced many of the same challenges that small, independent institutions with very focused academic offerings were facing—maintaining the cost of a full institutional support structure on the back of what would be the equivalent of a school or college at most universities.

2017 Arizona Board of Regents for Arizona State University
Arizona State University acquired the Thunderbird School of Global Management in 2014.

One of ASU’s goals is expanding our global outreach, and Thunderbird had a fantastic brand reputation, particularly overseas, in international business. We saw this as complementary to our business program. Thunderbird also had a strong set of executive education programs, which allowed us to accelerate the expansion of our portfolio in that area.

What were the terms of the purchase?

There was no purchase price. We assumed control of the board of the not-for-profit organization. Thunderbird’s available resources were needed to pay off debt service and allow for the transition period. We finalized the transaction as of Dec. 30, 2014.

Besides culture shock, what kinds of challenges did you encounter?

ASU is subject to state procurement and contracting rules, so we needed to figure out the best way to transition contracts to ensure that those requirements were met. We looked at all contracts that the 501(c)3 had in place to determine when and if they were appropriate to move. In some cases, we decided it was best to leave them until they expired and then move them over. We also needed to consider the nature of the international activity.

We spent considerable time debating the right accounting treatment, whether it was an integration of operations or a merger/acquisition. In the end, we decided it was none of the above. It was really a change of control, and Thunderbird became a closely related organization, but not a subsidiary of ASU. Thunderbird is a component unit in our financial reporting structure. All of the domestic faculty and staff became ASU employees, and all of the academic programs were moved to ASU. We established a new Thunderbird School of Global Management within ASU.

Transactionally, we sorted through a number of details. Our provost and his team worked hard with the accrediting agency to devise a plan to provide a platform to position Thunderbird’s program within ASU. We also needed to consider its relationship and structure with Title IV programs. Our financial aid office and student business services coordinated closely with the Department of Education to smoothly transition programs to ASU and ensure that students weren’t adversely impacted.

When might other higher education institutions be open to an acquisition of this nature? 

It really depends on the strategic goals of the institution and the opportunity that is presented. If the opportunity accelerates the institution’s goals, absolutely. In this case, it was a win-win situation.

I understand that ASU is using predictive analytics to help with campuswide decision making.

Yes, my team recently worked with our technology office to analyze Wi-Fi data to provide insight on infrastructure planning. If you have a wireless device and you walk across campus, you go through several Wi-Fi pickup points along the way.

We are using the data from those pickup points to analyze traffic patterns on campus by time of day and week. By modeling that information with our enrollment planning and long-term goals, we can determine where the bandwidth bottlenecks are now occurring, and where they might happen in the future.

We’re also just beginning to work with our transportation services group to look at changing parking patterns on campus. Rather than say, “Hey, we’re running out of parking space. Let’s build another parking garage,” we’re saying, “More students are using Uber and taking the light rail. How does that all play in? What do the data show? What are the future trends? What does that mean to us in the future?”

We don’t want to build a parking garage if, in five years, all the spaces will be empty.

If you could give one piece of advice to a prospective CBO, what would that be?

Invest in your team. Make sure that team members have opportunities to grow and acquire new skills, which makes them more valuable. Get involved in NACUBO and your regional association, which provide networking opportunities that pay real dividends. I now know so many people at other institutions. When I have a question, I can reach out and ask, “How do you do this? Are you facing this problem?” That’s an invaluable benefit.


Team Builder

Not long ago, you might have seen Sara Thorndike affixing emblems on the street drains around Wilmington, N.C., as part of a team-building exercise. She and members of her staff were educating citizens to refrain from polluting the waterways with trash and debris.

“I am a fan of any exercise that gives employees the opportunity to problem solve together, have fun, and get to know each other as individuals,” says Thorndike, the associate vice chancellor for finance and controller, University of North Carolina Wilmington (UNCW). “When you get to know someone as a person, it is harder to jump to incorrect conclusions, make assumptions, or think badly of them.”

The team-building activities might range from community service to outdoor physical activities, to indoor self-reflective activities—all in a group setting. “I ask that each of my team members participate in at least one activity a year. Some participate in more, which is great,” she says. “As busy as we are, I have found that making this a priority has made a world of difference. By putting collaboration and teamwork at the forefront of our work, we have set an important tone and enhanced our delivery of customer service.”

The University of North Carolina Wilmington realized cash savings of $21 million after reprioritizing spending and financial debt.

You supervise accounting, financial systems, student accounts, cashier, budget, purchasing, and financial analytics. To effectively manage your employees, how important is it to be an expert in those areas?

It would actually be very difficult to be a true expert in so many diverse areas. It has, however, been helpful for me to have experience in all these areas, because it helps me to better communicate and connect with the staff in these departments and relate to their experiences. Even though I don’t get into the weeds very often now, I can help my staff work through problems for possible solutions.

Since arriving at UNCW three years ago, you have reorganized staff. How did that work?

I haven’t eliminated any filled positions, but I have reorganized and eliminated vacant positions. With limited resources, this is one of the best ways to repurpose the existing budget to invest in employees with professional development and salary adjustments.

My personal philosophy is this: Whenever we have personnel turnover in finance, I ask my staff this question: “How would you like to see our department organized in light of this staffing change?” With such a large department, we have numerous staffing changes as a result of retirements, promotions, and departures from the university. I believe that we should always look for efficiencies and improvements.

How have you changed the budget process at UNCW?

The first year I worked with the budget team, we took all the campus requests for funding and presented them to the chancellor. The amount requested exceeded the amount we had available. To balance the budget, we had to make across-the-board cuts to all requests.

From that experience, we learned that it would have been better to present the chancellor with a balanced budget by working with the divisions collectively to determine what was most important and aligned with our strategic needs. Now, we have a budget leadership team with a representative from each division—academic affairs, business affairs, student affairs, university advancement, and the chancellor’s office—that meets monthly.

Working together, we develop and present a balanced budget to the vice chancellors. Through collaboration and compromise, we are able to balance the budget. This past year, we refined the process by aligning each request with our new strategic plan priorities.

You reprioritized how the university was spending available funds and financing debt. How much did you save, and how were the savings spent?

Since I have been here, we have refunded three debt issuances, which has resulted in cash savings of $21 million. We were able to use these savings to invest in student merit scholarships, improve our student fee fund balances, and accumulate funds that are available for the chancellor to use to support the campus strategic plan.

We have also re-evaluated the use of internal funds by creating internal loans for projects that in the past would have most likely been financed with debt. We have managed several athletic projects this way and were also able to pay for a major network infrastructure upgrade with our own internal funds that are being paid back over time with student fees.

You’ve been at UNCW only three years, yet you seem to have made quite an impression on leaders. How can other rising stars do the same?

Work hard, appreciate your team, keep a positive attitude, self-reflect, seek out growth opportunities, keep an open mind, and stay true to yourself.

If you could give one piece of advice to a prospective CBO what would that be?

I am an overachiever and have worked very hard to get where I am today. I am also a planner. I recently watched a movie where one of the actors said, “Just because things aren’t going as you planned, doesn’t mean they aren’t going the way they should.” This statement really resonated with me.

We can be the best leaders we know how to be, we can continue to grow and develop ourselves and invest in our people, we can work hard and collaborate, but we can’t control everything in our experience.

After we have done all that we can to create a desired outcome, we get to a point where we have to trust that it will work out the way it should. When I look back at my career so far, even though each step didn’t go as I planned, I couldn’t be happier with how it has turned out. So, my advice is to always put your best foot forward and trust that the outcome will work out in a positive way.

MARGO VANOVER PORTER, Locust Grove, Va., covers higher education business issues for Business Officer.

Credit: 2017 Arizona Board of Regents for Arizona State University

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