The story is always the same. A struggling business hires a visionary new executive in the hopes of turning around their fortunes. To great fanfare, they announce plans for implementing sweeping changes that will revitalize the organization. Employees and shareholders rejoice in these bold and decisive actions by leadership; the future is bright and all is saved. Of course, everyone involved always seems to neglect one minor fact:
Change is hard. Really, really, really hard.
Making announcements is simple; actually generating organizational transformation is far more complex and difficult. That’s because no matter how many times management goes over the numbers, no matter how bulletproof their strategies might seem, there will always be some unforeseen resistance to their efforts. They will misjudge any number of internal or external factors that will undermine execution, especially when their plans require making painful decisions. Time and again, we sing the praises of leaders who communicate grand visions of managerial change and the importance of revitalizing organizational culture. Yet we must look only to the facts to be reminded of the harsh truth – the majority of transformation initiatives fail spectacularly.
The more things change, the more they stay the same.
Perhaps no leader in college athletics is more conscious of this harsh reality than Julie Hermann. When Hermann took over as Director of Athletics at Rutgers University in the late spring of 2013, she inherited a post that few in her profession would envy. Reeling from a scandal that had shaken the department and university to its core, Hermann was tasked with turning around a program that appeared forever trapped in its own self-inflicted quagmire of mediocrity. In many ways, the Scarlet Knights were stuck in what renowned management scientist Jim Collins refers to as the “Doom Loop”, an organization that desperately wants to change, but lacks the internal discipline to stay the path and build sustained momentum, constantly undermining their own efforts until eventually they end up right back where they started. For Rutgers, poor results led to rash decisions without self-reflection, which in turn led to a new direction – a new coach, new initiative– all which killed any chance of momentum and in the end delivered only more disappointment.
Hermann understood from the onset that if the Scarlet Knights had any chance of disengaging from this seemingly downward spiral, it would require a systematic overhaul to the fundamental set of assumptions and protocols that underlined the athletics department. This meant that there needed to be a complete paradigm shift in the way the organization approached making decisions on critical issues that affect its future. It also meant mitigating losses and stabilizing the organization to counter those processes that caused the poor performance in the first place.
“When I first stepped foot on campus, I began to grasp what an incredible institution Rutgers was and the opportunity the athletics program had if it could harness the advantages that New Jersey and the surrounding community have to offer,” recalls Hermann. “Like any large institution, the [athletics] department faces a complex set of challenges, but I also realize that before we can address those concerns we have to create a culture that commits itself to staying the course for the decade or more it will take to see things through. Once this foundation is laid, then and only then can we realistically pursue our goal of becoming a beacon for both academic and athletic success,” she continues.
Without question, the most pressing challenge facing Hermann and the Rutgers athletics department is eliminating the massive financial subsidy it receives from the university in order to sustain its operations. In 2013, the department received nearly $47 million in subsidies from the university, including $37.1 million in direct institutional aide, which is almost double the greatest amount any Division I public school has ever received. High expenses coupled with revenue shortfalls have repeatedly hampered the department’s ability to invest into areas that will allow it to compete and prosper. If that wasn’t challenging enough, when Hermann took the reins, the university was on the cusp of entering the Big Ten, a conference in which the majority of the member institutions are at worst breaking even and at best turning a profit from their athletic programs.
Ironically, within the problem lies the solution. By moving into the Big Ten, not only does Rutgers benefit from becoming a member of a more athletically competitive and academically prestigious conference, but it also stands to receive a significantly higher revenue distribution from the conference than it did from its predecessor. In fact, when the university receives a full share, it is expected to be as much as $44.5 million, or nearly ten times the amount it received previously.
According to Hermann, “People seem to forget that if you look at the majority of universities, there are a number of units within the campus that don’t pay for themselves. Yet when it comes to Rutgers athletics, we actually know when the subsidies will stop. Of course, the biggest challenge is that for the next few years, we’re not fully integrated [into the Big Ten]. We’re working diligently to get into the black, and that means we have to invest into the program, but it’s a catch-22 because we have to cover the gap until we get a full portion of the revenue.”
While Rutgers can see the light at the end of the tunnel, it also cannot sit idly waiting to collect its paycheck before it begins building for the long term. The reality is that that the Scarlet Knights are desperately far behind its conference peers in the quality of its facilities, coaching salaries, and any number of other areas that are critical to fielding a competitive program. Hermann is acutely aware of this, which is why she has quietly focused all of the department’s energy towards initiatives designed specifically to catalyze growth in areas most critical to the program’s future success, even if their immediate impact may seem insignificant. By focusing on the little things while keeping the big picture in mind, Hermann and her staff are insuring that they will be prepared to take maximum advantage of the big things when the time is right.
For instance, Rutgers now has over 9,000 athletic donors – more than double the number it had just two years ago when Hermann took over. One of the ways it accomplished this was by requiring fans to make a donation before they can purchase football season tickets. While the majority of those donations may be relatively minor in the grander scheme of things, the department’s primary goal does not center on filling the coffers as quickly as possible. Rather, they first want to get alumni and others in the community vested in the Rutgers athletics program, and secondly want to put people on a path to giving so that when they can afford to give a larger donation, they feel comfortable doing so.
From an outsider’s prospective, it may seem counterintuitive to concentrate on the micro when so much seems to be wrong with macro, but that is precisely the type of paradigm shift Rutgers has so desperately needed. To find evidence of this approach, one needs to look no further than Hermann’s extremely ambitious, and by her own admission “somewhat unrealistic”, goals when it comes to fundraising. Hermann’s intention is to create a culture of overachievement within the department, while also insuring that people stay both humble and hungry in the pursuit of their objectives.
“I’d rather set huge goals right now and miss than set conservative ones and hit them,” reveals Hermann. “Normally, from a financial prospective I’m very conservative, but given what I think Rutgers can achieve if we are firing on all cylinders, there really isn’t a ceiling. That being said, I spend a lot of time encouraging our staff because when you set such big goals, and don’t hit them, it’s not easy. That’s why I want people to serve as inspirations for those around them, and to feed off of one another’s victories.”
Although successful executives like Hermann work hard to inspire those they lead, they also understand that the problem of motivating and managing people within an organization becomes far less of an issue if you get the right people onboard in the first place. If your organization is composed of individuals who are harmonized with its culture, than the necessity to tightly manage them disappears because those people are already driven by the inner desire to perform to the best of their abilities and be a part of something truly great.
In his seminal work on business management, “Good To Great”, Jim Collins contends that great organizations do not start with a strategy and then attempt to get people committed to the cause, but rather they take a “First Who, Then What” approach that focuses on getting the right people onboard and only then figuring out what direction to point the organization in. This is precisely the philosophy Hermann has adopted at Rutgers, as she recognizes that the program’s chances for long-term success rely heavily on its ability to get and keep the right people. The unique internal and external constraints that the department faces require that its employees be easily adaptable to change and have the nimbleness to work around the numerous obstacles they are bound to encounter. Likewise, Hermann knows the importance of putting the best people on the biggest opportunities, not the biggest problems. The Rutgers of old seemed focused on just finding ways of keeping its head above water, and that is no way to build sustained success.
“The coach in me sees the world as, ‘here’s a skill set… here’s another skill set… now how do we put it all together?’ I don’t like hiring positions, I like hiring people. My goal is to find the right person who can play any position on the field that you need at that particular moment,” explains Hermann. “Of course, we’re looking for tireless workers, people who are inspired and who make great teammates. Staff chemistry is critical to our success… you can’t have people rowing in the wrong direction and expect to get anywhere.”
To that end, one of the very first things Hermann did upon arriving at Rutgers was begin to assemble a topnotch executive staff full of individuals who are not only the best in their respective fields, but also have the ability to lead across different areas of the department when necessary. After so many years of struggle, the culture of Rutgers had stagnated to the point that people had become risk-averse and tolerant of mediocrity. One of the primary causes of such behavior was lack of transparency and communication within the department, which is why Hermann now meets with her executive staff every week in a free-for-all session in which there is no agenda other than to give people a platform to voice their concerns and then work through them as a team.
“After spending so many years in this industry as a subordinate, I know how apprehensive people can be about approaching their boss to discuss difficult topics,” admits Hermann. “That is why I gathered my executive staff and explained to them that Rutgers has no chance of being successful until we had ten athletic directors working within the department, not just one. People have to be able to make decisions when I’m not around and that means we all need to be on the same page. But I also warn them that in this organization, silence means consent. I don’t care if we have to turn this into a wrestling match… let’s have a conversation and fight it out if necessary until we find consensus.”
Top performing organizations appreciate the importance of engaging in vigorous debate while keeping the conflict constructive. But it is equally critical that leaders encourage the expression of dissenting views, rather than simply engaging in what management scholar Michael Atkins calls a “charade of consultation”. There’s a tremendous distinction between “having your say” and actually being heard, which is why Hermann’s genuine willingness to listen to the opinions of her team is a compelling sign of her commitment to changing the culture of the department.
Hermann’s hiring philosophy and forward approach to management holds equally true for the Scarlet Knights’ administrators as it does for its coaches. This is why the department performs a 360-degree overview of each coach and their program at the end of every season. The goal is to not only give feedback, but also to determine whether or not the coach has hit a plateau. Hermann seeks to determine whether a coach needs more resources and support to get over the hump, or whether the program has stagnated to point that a change in leadership needs to be considered.
“I know firsthand how hard of a profession coaching can be, that it’s a 365 day-a-year job and how it’s all but impossible to drop everything and take a look in the mirror to assess the state of your program,” explains Hermann. “My job as an athletic director is to provide that mirror, to be a resource and an asset for my coaches to better themselves. I don’t believe in surprises… if I have to ask a coach to leave, they know it was coming.”
Of course, Hermann wants to do everything in her power to make sure that Rutgers is never forced to part ways with any of its coaches because of poor performance or off field issues. There is no denying that one of the primary reasons why the Scarlet Knights have had such difficulty in building successful teams in the past is due to lack of continuity in coaching leadership. One needs to look no further than the men’s basketball program for evidence of this. Before current head coach Eddie Jordan took over the program, the six coaches that preceded him were all fired or forced to resign – a streak that reaches back over 30 years! Not surprisingly, the team hasn’t participated in the NCAA Tournament since 1991, the longest such drought among any major college basketball program. The constant churn in leadership has crushed any chance for a positive culture within the program to take root, and consequently every new coach must start from scratch until they too are fired and the process repeats itself.
According to Hermann, “Nothing kills positive momentum like hiring the wrong person, which is why you can’t overlook the distinction between someone being qualified for a job and being fit for one. When you’re searching [for a coach], you have to cast your net wide and analyze the current state of your program and what type of individual can excel in that particular situation. Is the team ranked 349 of 350 and you need someone to build it from the ground up or is it a perennial Top 25 program and now you need someone to take it to the next level? The incremental difference is huge, and thus the skillset necessary to excel differs greatly in each scenario.”
Despite the fact that Hermann has not yet had to make a major coaching hire during her first few years on the job, it has not stopped fans and the media from speculating whether or not she should. Hermann is well aware of the fact that one of the unique operating circumstances Rutgers faces is that it is the only major college athletics program located in the New York City metropolitan area – the world’s biggest media market. Whether they like it or not, every decision the university makes they must do so very carefully. As Rutgers has learned all too often in the past, even the smallest controversy can be blown way out of proportion due to their precarious geographic position.
“We do operate in a very powerful media market which requires us to have a great deal of transparency. I can appreciate that the job of the media is to always seek content, but sometimes they can report on something well before there is even a story to be told,” concedes Hermann. “Here to finalize any decision you need to have a consensus and getting a consensus at such a large university is often extremely difficult and time consuming. Not to mention that most of what we do requires high level sign off. If the press gets a hold of something in their search for content, and reports on it in error that helps no one, and at worst can undermine our efforts.”
Although many might view the fact that Rutgers is just miles from New York City as a negative because of the constant spotlight, on the contrary, Hermann sees it as the school’s greatest asset and the primary weapon in the Scarlet Knights’ quest to become an elite college athletics program.
“Because of our location, the exposure opportunities for our student-athletes are simply unparalleled,” claims Hermann. “Not only are you competing at the highest echelon of college athletics, but you’ll also have tremendous academics and incredible professional opportunities. We’re making sure that every student-athlete that comes here gets a job in their industry of choice. While our competition touts how valuable their degrees are, last year 82% of our graduating seniors had a job or were headed to grad school. Rutgers has an actual Wall Street Committee… other schools have ‘guys that work on Wall Street’.”
Though the Scarlet Knights have sometimes struggled on the field, they have performed admirably in the classroom. Their graduation rate across the board ranks amongst the highest in all of college sports, and puts the school in an elite category reserved for the nation’s top academic institutions. Much like Hermann’s overachieving approach to fundraising, the Scarlet Knights have shifted their focus from just graduating student-athletes (which is all but a given) to insuring that every single one of their immediate futures is secure upon receiving their degree. This unique value proposition is at the core of Hermann’s long term strategy to turn Rutgers into college sports next great story.
While it is easy to be skeptical as to whether Julie Hermann has what it takes to finally turn around the Rutgers’ fortunes, one cannot not deny the legitimate progress she has made in accomplishing just that during her brief time on the banks. Walk across campus and speak to any student or member of the university of community and you will hear a palpable excitement about the direction the program is headed. With the department recently announcing plans athletics facility upgrades that are estimated to costs in the tens of millions, it is clear that momentum is gaining in their favor. And If Hermann indeed proves to be successful, the Scarlet Knights organizational turnaround will go down as one of the greatest in history.
As Hermann puts it best, “If you can succeed at Rutgers, you can succeed anywhere.”