Why this is the year of strategic finance
Dear Lumberjacks,
A month into the new academic year, I want to revisit the central theme I raised at University Convocation and share more about why this year, as we celebrate 125 years of excellence at NAU, our focus must be on strategic finance. As we pursue this important work, I want to ensure that we have a shared understanding of what strategic finance is, what it is not, and how we will structure our efforts to make meaningful progress in the months ahead.
What is strategic finance?
Strategic finance is a holistic approach to align an institution’s financial strategies with its vision, charting a path toward greater sustainability, resilience against expected (and unexpected) challenges, and impact, as ultimately measured through our ability to broaden access and propel success for our students. At NAU, it is a framework through which we will thoughtfully manage our revenues, expenditures, and investment of time and effort to be the nation’s preeminent engine of opportunity, doing so against the evolving context in which we operate.
Strategic finance is notabout doing more with less, wholesale budget cuts, or employing austerity measures that result in a lack of innovation. Rather, it is ensuring that every dollar we invest is allocated to maximize impact. We must collectively lean into doing more of the right thing with the talent we have today. That will mean stopping some efforts and pivoting resources to others that make a greater difference for the students we serve.
The fundamental difference in this approach is looking around the corner and anticipating challenges and opportunities, adjusting our approach, and ensuring that our investments mirror our aspirations. We are seeking to proactively shape our future rather than being purely reactive to the impact of changes that are outside of our control, which is more important now than ever, as we consider state investment levels, demographic changes, and heightened competition for students. Over the years, NAU and other institutions have been forced into making across-the-board cuts when faced with unexpected financial crises. Taking a strategic finance approach will mitigate this risk through continuous evaluation of strategic alignment, impact, and broad situational awareness that will make us more nimble and effective in achieving our goals.
Importantly, strategic finance is designed to help us realize our vision and provide a values-driven approach to how we invest time and money in our institution and its people and programs. We are guided by a commitment to equitable postsecondary value and the success of every one of our students; we are putting our people first through investments and workplace practices, and I have emphasized with my team that a priority for this year is to responsibly enact the next phase of our three-year compensation increase plan ; and we are focused on delivering exceptional, outcomes-driven programs to our students that will contribute to their success at NAU and beyond.
So, while the term itself may be new, I hope you can see that this is a philosophy that we have been aligned with throughout this presidency. Let me give a few examples that, in the past three years, have demonstrated strategic finance principles in action:
- In our development of Access2Excellence, we took a strategic finance approach to recalibrating student aid and pricing such that with the resources we had available, we invested in those with the greatest need to power equitable access and attainment.
- When we launched the New NAU Workplace initiative, our priority was to ensure that our workforce is fulfilled, supported, and mission-driven, and that the high standards we set for employee contributions to our vision are reflected in commensurate investments from the university.
- In sharpening our focus last year on academic momentum, we emphasized putting the resources of our time and energy into a relentless welcome—an investment that has paid dividends as seen in our tremendous retention and record six-year graduation rates.
We have a record of acting in alignment with strategic finance. Now, our goal is to intentionally focus in on this approach and build it into the fabric of our operations and decision-making to sustain our success and impact over the long term.
Organizing the work ahead
Much like our focus on relentless welcome and academic momentum last year, strategic finance must be an all-hands approach. As such, a shared understanding of how we will organize our work is vital. So, in addition to the overview of strategic finance provided above, I want to compile several additional key pieces of information.
First, I encourage you to review the comments shared in my convocation address, with a specific focus on the four interrelated workstreams associated with implementing a strategic finance framework. These will each be emphasized in turn throughout the year as key levers for us to put strategic finance into action. Consider how you might begin this work today by focusing attention to areas that generate the greatest vision-aligned returns and allocate and prioritize resources—especially of your time—accordingly:
Second, I recorded another video that helps further set the context, which I encourage you to watch and reference often to understand NAU’s revenue and expense categories that we must monitor and manage to advance our vision:
And third, I expect to carry this conversation throughout the year ahead, including with the cabinet, deans, University Budget Advisory Board, representative groups, and various departments and units throughout the university. A point of emphasis is how embedded strategic finance is to everything we do. Because our aspirational vision, daily operations, and institution finances should not be thought of as separate items—each the purview of different groups—but rather as intrinsically linked facets that enable us to deliver on our promise to the students we serve and the communities they represent.
I firmly believe—and the record suggests it is true—that at this moment, as NAU celebrates 125 years, we are in an era that will be defined by our ability to deliver impact powered by innovation. That begins with how we think about, prioritize, organize, and fund our work.
I look forward to the work ahead and to your partnership in elevating NAU to sustain our excellence long into the future.
In partnership,
José Luis Cruz Rivera
President