PUBLIC AGENDA
To:
Clayton Christian, John Cech, Tyler Trevor -- Montana University System;
Royce Engstrom, University of Montana; Waded Cruzado, Montana State University
Alison Kadlec and Isaac Rowlett, Public Agenda
Montana Performance-Based Funding Focus Groups
April 25, 2013
Judy Heiman and Martha Snyder, HCM
From:
Re:
Date:
cc:
This internal draft memo summarizes the cross-cutting themes and context-specific issues that
emerged during our two days of conversations with institutional stakeholders across the Montana
University System on April 10 and 11, 2013. On April 10, we spoke with roughly 50 faculty, staff,
administrators and institutional leaders from across the University of Montana system. On April 11,
we spoke with roughly the same number of faculty, staff, administrators and institutional leaders
from the Montana State University system. Three students -- two from UM and one from MSU -were also part of these conversations.
The goals of these conversations were to engage institutional actors from the outset of the longerterm planning process for performance-based funding, learn more about the starting point attitudes
of different types of institutional stakeholders and get input on both the ‘what’ and ‘how’ of
performance-based funding in Montana.
It is important to note that the guidelines we suggested for group composition and overall
convening structure were followed more closely by MSU than UM and, as a result, we were able to
get a bit more out of the conversations at MSU. We still learned a good deal from UM, but given the
constraints imposed by process design decisions beyond our control, we have more open questions
about the nature of resistance within the UM system.
In the closing section, we summarize the recommendations made by stakeholders, as well as our
own recommendations based on our experience with higher education change initiatives across the
country. We also include a number of representative quotes from the conversation.
Overall Observations:
 Most participants acknowledged that the move toward performance-based funding is an
inexorable national trend with broad support across the political spectrum. There was
general agreement that, if “done right,” performance-based funding could be very good for
students, institutions and the state.

At the same time, there is widespread concern that the deck is stacked against performancebased funding being done right in planning and in practice, given both the signals sent so far
in MT and the lack of definitive evidence about the benefits of performance-based funding
nationally.
o
Signals from the state that concern faculty and academic staff include: the
problematic Dennis Jones visit a couple of years ago; the suddenness of the recent
6 East 39th Street, New York, New York 10016-0112 212∙686∙6610 Fax: 212∙889∙3461
E-mail: info@publicagenda.org Web site: www.publicagenda.org
agreement struck by OCHE and state policymakers; and the pace and framing of the
short-term effort -- all of which exist in the context of ongoing disinvestment in
higher education in MT.

The complexity of the research based on performance funding contributes significantly to
the challenge of effective communication and engagement. While the logic of performancebased funding makes sense intuitively, definitive evidence of the positive impacts of such
policies do not yet exist. See Kevin J. Dougherty and Vikash Reddy, “The Impacts of State
Performance Funding Systems on Higher Education Institutions: Research Literature Review
and Policy Recommendations,” CCRC 2012.

Resource scarcity is a common focus of every conversation about higher education across the
country, but in Montana, this theme is especially pronounced. In discussing resource
concerns, participants in most of the groups noted that public investment in higher
education in Montana is significantly lower than the national average
(http://www.higheredinfo.org/catcontent/students_states/MontanaProfile.pdf).
Unsurprisingly, concerns about the limits of doing more with less and the potentially
punitive nature of reform efforts that impact how the pie is divvied shape the conversation
in challenging ways. While participants acknowledge that the 7.5 million to be gained in the
short term is money that would not otherwise have come to the institutions, many take issue
with the depiction of this as “new money.”

Suspicion about the motivations of the legislature and OCHE, along with deep anxiety about
the possible negative unintended consequences of performance-based funding on
educational quality, make it difficult to sustain a shared focus on the opportunities and
potential positives.

Even amid deep concerns about the impact performance-based funding may have on
institutions, all of our conversations were characterized by high levels of thoughtfulness and
a general eagerness to find solutions that will benefit students.

The most constructive moments of our conversations occurred when faculty were talking
and thinking aloud about opportunities presented by performance-based funding. In these
moments, people were remarkably positive, creative and full of interesting ideas. These
conversations made it clear that Montana has a precious resource available in the form of
untapped faculty knowledge, expertise and commitment. During these most interesting
parts of the focus groups, many acknowledged that (even in the absence of definitive
evidence of its ultimate value) performance-based funding would likely create the
conditions for new kinds of conversations, collaborations and student success efforts that
faculty value and desire.

There was widespread agreement that a one-size-fits-all approach will not work given the
differences between 2-yr and 4-yr institutions, large and small institutions, and those
institutions which are teaching-focused and research-focused. Challenges facing rural
institutions, the recent mission expansion, rebranding of two-year institutions and MSU’s
Page 2
recent classification as a Research 1 university are special contextual factors that require
careful consideration and clear communication.

People have a lot of questions about possible metrics (about the best type, how both to keep
it simple while respecting the complexity, about which will work best for what types of
institutions, about which are most likely to allow for innovation and recognition of effort,
about which are hardest to game, etc.) and many asked for more structured opportunities to
consider various choices and approaches.

Even those who were most worried or frustrated expressed appreciation and gratitude that
they were being consulted and engaged early in the process. Everyone asked for more,
regular opportunities to engage issues at a deeper level and signaled their readiness to be a
part of the work. For example, following the groups at MSU, one of the participating faculty
members who was especially hostile and wary for much of the conversation emailed his
Provost to thank her for creating an authentic opportunity for faculty engagement on this
complex issue. This bodes well, but none of this appreciation should be read as a “buy-in.”
Instead, it should be read as a readiness for constructive participation.
Recommendations
Based on these conversations with institutional stakeholders across the Montana University System,
our deep experience with faculty engagement in many other contexts and our expertise in change
leadership, we present in this section a number of recommendations aimed at supporting your
capacity to design and implement a sound and widely embraced model of performance-based
funding in Montana.
 Take the time to develop a planning and implementation process that attends to the human
side of change, as well as the technical components of performance-based funding.
 Be crystal clear about the goals of performance-based funding, and tie the creation of metrics
explicitly to the goals. Institution, system and state goals may not all be the same, and there
must be goal clarity driving the creation of metrics. Goal clarity, along with clear goal
articulation, is a critical first step in a successful longer term process.
 Elevate the tone and focus the statewide conversation by reiterating the state’s commitment
to protecting quality and access across Montana’s higher education system.
 Maintain transparency around the short-term performance-based funding plan and publicly
share a plan for the institutional engagement (listening sessions, additional focus groups,
etc.) that will take place as the long-term metrics are developed.
 Complement clear and transparent communication about goals and processes with honest
recognition of what is difficult, complicated or unknown about the process ahead.
Acknowledge internally what is understandable about fears that faculty and academic staff
Page 3
may have, and communicate externally in ways that demonstrate this acknowledgement. In
other words, practice and model respect both internally and externally. This should be
understood as a long-term commitment to building a culture of trust and shared ownership
for successes and failures.
 Create a FAQ on performance-based funding with institutional actors in mind and distribute
it to institutions, while encouraging them to add their own questions, thoughts and ideas
through an online forum. FAQ’s can be a quick and accessible way to alleviate anxiety
brought about by miscommunication.
 Continue sharing resources like national examples and research on performance-based
funding as way to fuel constructive dialogue. Keep in mind that academic sources like those
from the Community College Research Center are considered far more credible than
resources produced by Lumina Foundation or Complete College America.
 Talk publicly and often about the ways that you’re listening to faculty, staff, administrators
and students (like these focus groups), and demonstrate that you’ve heard people by
explicitly discussing input you’ve received—even difficult input. Explain what
recommendations you are implementing, and explain why you are not implementing other
recommendations. Find multiple venues and opportunities to share this information.
 Recognize institutional stakeholders, especially faculty, who view performance-based
funding as an opportunity to improve by inviting them to participate in the committee(s)
that will develop metrics for the long-term approach. In addition to forward-thinking
faculty, thoughtful skeptics should also be invited to participate from the outset. Provide
regular updates to the broader community about the work of the committees via the website
and in conversations.
 Work to connect administrators, faculty and staff with their role-equivalents in states where
performance-based funding is working well and provide opportunities for them to discuss
the benefits of performance-based funding with their colleagues. Institutional actors need
opportunities to consider the way other states and institutions have developed metrics that
are both tuned to different institutional missions and are not overly-complicated. Austin
Peay State University in Tennessee is a good institutional example for comprehensive fouryear institutions serving significant numbers of ‘new traditional’ students, while
Washington State provides important guidance for community colleges. Finding an
illustrative example that speaks to the creation of widely embraced metrics appropriate to
the mission public flagship institutions (tuned to the teaching, research and service) is an
important next step to advance the conversation at MSU.
 Learn from past experiences, as well as the experiences of other states (both positive and
negative). For example, choose messengers carefully and avoid unnecessarily provoking the
deepest anxieties of institutional actors when bringing in national experts as resources. For
institutional actors, their role equivalents at other institutions who have embraced
Page 4
performance-based funding are far more powerful than voices of policy experts or others
without backgrounds in teaching and learning.
 Provide institutional stakeholders with authentic opportunities to deliberate about the pros,
cons and unknowns of various approaches to metrics and their implementation. While
OCHE and public officials may be wary of “opening a can of worms” by engaging
institutions in a deep way (particularly faculty and academic staff), unwillingness to do so
will certainly lead to an unnecessarily painful process and may well result in stalled efforts
or failure.
 Avoid the temptation to treat institutions as monoliths: executive leaders, senior
administrators, faculty and staff impacted by performance-based funding need different
types of support and engagement opportunities. Attend to the real drivers of behavior at
each level and think carefully about what each layer of actor needs in order to both
participate constructively and to “lead from the middle” with their colleagues. Be clear about
the fact that a lack of support at the senior administrative level will preclude even the most
forward-thinking faculty from being constructive participants in the process, while buy-in
from senior leadership cannot guarantee successful implementation without the meaningful
inclusion and buy-in of faculty.
Illuminating quotes that deserve consideration:
The following quotes are representative of what we heard repeatedly across groups and institutions.
Regardless of whether these are legitimate or feasible ideas, they are clear perceptions and
viewpoints shared by many. Understanding these perceptions, viewpoints and ideas is important to
both the substance and process of the difficult work ahead.
Is [performance-based funding] just going to go away, will it just be a hoop we jump through
for appearances to make legislators happy, or will it be meaningful? It’s hard to say right
now, but I’m not optimistic.
I think this should be reframed in a more positive light. They could say “Look, we can
evaluate the entire enterprise on a different level than we ever could before” instead of it being
about judging us in a punitive way. It’s really important that our leaders frame this
conversation in a way that isn’t so bleak and staged.
We’ve been living on these anorexic budgets – did you know we’re among the last in the
nation when it comes to public investment in higher ed? And I don’t want this to be a scrap
that gets thrown in that turns us into a bunch of dogs going after it… Elevate the tone, think
about carrots instead of resorting to sticks… make this about the important work we have to
do and the opportunity to finally articulate our value and back it up.
It seems clear that the legislature and maybe OCHE, too, don’t really value anything we do. I
don’t understand this. When did we become the enemy instead of an asset? I honestly can’t
think of a state that values education less, at least one that’s not in the Deep South.
Page 5
It’s not enough to do a little listening here and there. You have to listen repeatedly and then
communicate out even more, again and again, so that people hear and really understand that
they are being listened to. Be repetitive because it takes many different times and versions and
venues for people to hear what’s going on and feel included.
Institutions need to be clear about how performance-based funding connect with other
priorities and initiatives. Connect the dots for people or this is never going to fly.
I know how national benchmarks work, but for this to be meaningful we are going to need the
ability to look at headcount in addition to first-time/full-time in order to understand if we’re
really making progress on our student success efforts.
They have to create enough flexibility and lower the stakes at the outset in order to address
unintended consequences quickly when they arise. And what happens to institutions that
don’t perform so well out of the gate? Helping them improve instead of shaming them or
casting them out seems like the smartest thing to do when it comes to really advancing the
student success goals of the state.
This won’t work if we’re changing the metrics every two years. How can we create a process
that is flexible so we can respond if we’ve gone of course, but still stable and long-term
enough that we can stick with it over time?
If you only have to think for a minute to come up with ways to game a metric, it’s probably
not a very good metric.
When I first heard the concept [of performance based funding] I was really excited about it, but I think
it needs to trickle down within the institution level. It takes everyone’s help to increase retention and
completion, and there are a lot of different things that different stakeholders can do to reach that goal.
What happens with the funding when it hits the campuses and how will it be addressed at the
institutional level? If that’s not mandated then we need to make sure that mission of improving our
performance continues and it isn’t just one group’s responsibility.
I know they’re saying that colleges won’t be compared, but there’s only a finite number of dollars.
Sometimes it feels like a bit of a shell-game.
It’s really important how the metrics are communicated once they’re decided on. If it’s not
communicated well then morale will go down.
Page 6