John Hennessy reflects on bringing startup lessons to university administration, emphasizing rapid decision-making during crises. When the university endowment dropped roughly 25%, he argues leaders must act decisively rather than wait for problems to resolve themselves, including making tough calls like managing layoffs.
Chapters
In any startup environment, time is money. Prolonged decision-making, long cycles of waiting for things to occur is death to a startup company. One of the challenges that exists in a university, it's a very complex organization with multiple constituencies. If you took every problem that came to the president's office and put it through an academic decision process, we'd still be waiting to build the arts district. We'd still be waiting to build the engineering quad. We'd still be debating whether or not the business school should stay where it is or should move. So you've got to put some value on making decisions and be comfortable making decisions when everything is not black and white. Because that's what happens in any complicated organization. And that's something you learn in a startup company. You also learn how to go through the cycles that occur naturally in a startup company. I did my— worked on my first layoff when I was at MIPS. And learning how to do that there made it a lot easier when we had to go through a financial crisis in the university. I learned the most important thing about dealing with a crisis. The faster you can move through it, the better and quicker the organization heals and moves forward. So completely contrary to the way universities usually think about budget crises, they think, well, let's see if we can just hold out and wait for this to go away and maybe things will get better on their own. But of course, when the endowment dropped 25%, things were not going to get better on their own overnight. That was $100 or $200 million worth of income to the university every year. We had to solve the problem. Having done it in a startup company, it's a lot easier to think about how you do it in this environment.
