World Bank economist takes on financial post at UC Berkeley

January 24, 2011
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An organization is only as strong as its leadership. If we agree on that, the University of California, Berkeley will handle a tough financial road ahead with a leader who knows that terrain best. As of Feb. 1, the university welcomes former World Bank economist John Wilton to its staff as vice chancellor of administration and finance.

The news came, courtesy of San Francisco Business Journal, as Wilton steps down from a position at Farallon Capital Management. He also served on the World Bank for more than two decades. As he joins the university, it is in the midst of cutting some $500 million from its operating budget of $1.8 million. Wilton will supervise more than 2,400 people.

According to the story:

Chancellor Robert Birgeneau said: “Given the state of California’s economy and U.C.’s severe budget crisis, we are thrilled that John, with his vast experience in finance, economics and managing highly complex, large organizations, will guide us through these difficult times.”

Wilton, interviewed by Gretchen Kell of Newscenter Berkeley, noted his commitment to excellence in education and his plans for this new position. He said:

“If the U.S. is going to be competitive in a global environment, education and first-class research is central,” said Wilton. “The preeminent public research university in the world is UC Berkeley, and it faces serious challenges to maintain its excellence. I felt that if I was going to make an important contribution, nothing could be more important than working for Berkeley, and working there now, because the next few years could be crucial.”

“One of my priorities will be to ensure that UC Berkeley is well-positioned and resourced to succeed in this difficult environment,” he said. “I look forward to working with the chancellor, his senior administration, and the faculty, staff and students, not only to meet Berkeley’s current financial headwinds, but to ensure that it has a sustainable financial model that will enable it to adapt and grow to meet the challenges ahead.”

In your business, when fostering leadership and facing challenges, how do you empower leaders and managers you currently have in place? And how do you seek out the right employees to face the challenges you need to overcome? Tell us about it in the comments section below.

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2 Responses to World Bank economist takes on financial post at UC Berkeley

  1. Anonymous on January 25, 2011 at 1:44 am

    UC Berkeley Bares Financial Criticism. UC Berkeley–one of the top universities in the nation, home to some of the finest professors, graduating some of the brightest students–can’t figure out how to save money. No joke. UC Berkeley spent $3 million plus expenses to hire an out-of-state auditing firm to help them find ways to reduce spending.
    According to the Contra Costa Times, October 10, 2009, “When UC Berkeley Chancellor Robert Birgeneau was confronted with the $150 million challenge, he gave the matter deep thought, turned his focus eastward to the Boston-based consulting firm Bain & Co. and agreed to pay $3 million over the next two years for someone else to solve the problem.
    “We [the Times] never attended business school, but we’re pretty sure that one of the definitions of financial crisis is spending $3 million on consultants to tell you how to get by with $150 million less than you thought you had.”
    The rationale for hiring the consulting firm given by Vice Chancellor Frank Yeary: “I understand at one level, … if you don’t have enough money, why are you spending money on external consultants? Most people who are closer to it say it’s more sophisticated than that.
    “If we spend $1.5 million this year and $1.5 million out of savings next year and we’re successful in delivering tens of millions of dollars in savings every year, I think that’s the goal against which we should be judged.”
    Incredible! Millions of dollars could have been saved just by using the expertise on UC campuses. The system has, for example, multiple senior administrators with Ph.D.s who are getting nice paychecks for their expertise, the Budget Office staff gets paid to solve budget problems, and the renowned Haas School of Business has a world class lineup of business experts and graduate programs in financial engineering, global management, accounting, financing, and operations management.
    Moreover, the funds used to pay the high cost of hiring outside consultants could have been used to make up for state budget cuts, student fee increases, furloughs and layoffs.
    But, according to Vice Chancellor Frank Yeary, “The reason for not relying on internal experts is that self-diagnosis is not always impartial.”
    If this is the reasoning by UC Berkeley decision makers, it is no wonder they are in a fiscal crisis. If the university system can’t trust its internal audits, maybe it is time for outside auditors to make all the university’s financial decisions. Those decisions might be based on more practical thinking than those made by the current university leadership.

  2. Mold on March 30, 2011 at 9:56 am

    Thanks a lot for writing this, it was unbelievably informative and helped a lot.

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