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Stanford Report, March 8, 2001
'Taking Stock: Five Continuing Successes -- and Five Challenges for the Future'

This is the text of remarks prepared for delivery by President John Hennessy at the annual meeting of the Academic Council, Thursday, March 8, 2001 at Kresge Auditorium.

Good afternoon. This year we have chosen a slightly different format for the annual meeting of the Academic Council, namely a short address followed by a panel discussion with five of my faculty colleagues. After giving this talk the title "Taking Stock," it occurred to me that my address might be misconstrued as an economic commentary on Silicon Valley and the recent unfortunate outlook for dot-com companies.

No, today we are here to "take stock," a phrase that the Oxford English Dictionary reports was first used in 1736. According to the OED, to take stock means "to make an inventory of the merchandise, furniture, etc., in one's own ... possession, recording its quantity and present value, or to make a careful estimate of one's position with regard to resources, prospects, or the like."

It is this last meaning -- "to make a careful estimate of one's position with regard to resources, prospects, or the like" -- that I would like us to focus on today. I will start by briefly discussing five continuing successes and five challenges for Stanford's future. I decided to confine myself to five successes and challenges to allow ample time for the panel and a question-and-answer period. And, while I get to talk about the successes, as you might guess, I have asked the panel members to focus on the challenges. Limiting myself to five successes, however, meant that I was forced to leave off several memorable events, including and the incredible record of our men's basketball team, the recent achievements of the BaBar project at SLAC, the football team's tenacious play in the Big Game, and a memorable Gaieties performance.

There can be no doubt that one of the greatest accomplishments that we can claim as a university in recent years is our ongoing renaissance in undergraduate education. I frequently hear from students about the excitement they have found in freshman or sophomore seminars or in Sophomore College. To further enhance the undergraduate experience, Vice Provost Bravman has just announced an expansion of support for undergraduate research; over time we hope to significantly increase our investment in supporting such endeavors.

At my inauguration in October, we launched a $1 billion campaign to provide permanent support for the enhancements to our undergraduate program, as well as to strengthen our financial aid programs and fund additional innovative ideas. We have already raised $460 million toward this target, which I believe is an auspicious sign of the support among alumni, parents and friends for these initiatives.

Second, despite the challenges of housing and cost of living, we have continued to enhance the quality of our faculty and staff with important new additions. These include:

  • Over 120 new faculty in 48 different departments in all seven schools, in addition to SLAC and the Hoover Institution. Among these faculty are a number of distinguished and acclaimed senior colleagues, as well as some of the most promising young professors in the country. Our continued success in faculty hiring bodes well for Stanford's future.

  • In January, Professor Deborah Stipek, most recently a faculty member at UCLA and a renowned researcher in educational psychology, joined us as professor and dean of the School of Education.

  • Dr. Philip Pizzo, a distinguished pediatrician, with landmark contributions to the treatment of complications of cancer and AIDS in children, will join us on April 2 as dean of the Medical School.

  • Randy Livingston, who holds two Stanford degrees and was most recently chief financial officer and executive vice president at OpenTV, will join us on March 15 as chief financial officer and vice president for business affairs.

  • LaDoris Cordell, a graduate of our Law School and a veteran of 19 years on the bench in Santa Clara County, has recently returned to Stanford to take the position of vice provost and special counselor to the president for campus relations.

  • Capt. Marvin Moore, an officer in the Department of Public Safety for 27 years, will become the university's fifth police chief on May 1, replacing Marv Herrington, who is retiring.

These and other critical hires provide a strong foundation for Stanford to move confidently and boldly into the future.

In 1998, we integrated the Stanford Alumni Association into the university, recognizing the importance of a closer relationship with our more than 100,000 alumni. Our third success is the strengthening of that relationship, as symbolized by the completion and initial occupancy of the new Frances C. Arrillaga Alumni Center. This beautiful new facility not only provides greatly needed office space, it also celebrates the importance of alumni to the university by providing meeting rooms and a home for them while they are on campus.

Fourth, we started the process that will lead to the construction of the Clark Center for Biomedical Engineering and Sciences. Stanford is uniquely positioned -- because of our intellectual depth, the breadth of our technological strength and the geographical proximity of key disciplines -- to be a leader in these new interdisciplinary efforts based on the biosciences. I hope that the success of this effort will embolden us to build new multidisciplinary teaching and research programs that combine and strengthen our existing activities, while keeping us on the frontier of discovery.

Fifth, the university managed to complete an acceptable agreement with Santa Clara County on the General Use Permit. This agreement involved a complex set of concessions from the university in areas as diverse as open space, traffic, financial support for schools and land for community services. With the tremendous help of faculty, staff, students and alumni, we were able to arrive at a compromise that we could accept. Obtaining county approval of the General Use Permit was critical to our plans for building additional housing, as well as new academic facilities.

Despite these dramatic successes and the overall general good health of the university, we face several critical challenges, which will affect our long-term success. Again, I have limited myself to five, and I hope, perhaps naively, that our panelists will solve all these problems before we leave this afternoon!

In the aftermath of the General Use Permit, one of our clear challenges is to bolster our relationships with our neighbors in the surrounding communities. This will require us to do a better job of listening and responding to the community concerns about our plans, as we communicate the challenges and opportunities that Stanford faces. To facilitate this two-way communication and to ensure that Stanford's position on key issues is both clear and consistent, I have decided to create the position of vice president for public affairs. We have initiated a search for an individual, whose primary task will be to oversee and coordinate communication, government affairs and community relations for all Stanford activities.

In addition, I have appointed a working group on university/homeowner relations whose charge is to explore ways to improve the relationship between faculty and staff campus residents and the university. Hank Greely of the Law School has graciously agreed to chair this activity, and they had their first meeting last week.

One issue that has received a great deal of attention in recent months from residents in nearby communities is our access policy for the Dish area of the foothills. In the spirit of creating an ongoing dialogue about such issues, I have asked that an advisory group, which will include community representation, be established to review the policy and make recommendations on changes if necessary.

Although those issues represent difficult challenges, I now move on to what I view as the most significant external threat to the future health of our university, namely the cost of housing and, by extension, the cost of living in the Bay Area. Unfortunately, this situation has become so acute that it affects every group in the Stanford community: faculty, staff and students.

The new faculty housing program, recently announced by the provost, will go a long way toward helping with faculty housing. Likewise, with the new General Use Permit comes the opportunity to add to the on-campus housing supply for faculty, staff and students. We plan to move aggressively to start new graduate student housing projects, as well as examine our needs for additional undergraduate residences.

A key challenge for new student housing projects is the tremendous rise in construction costs, which has meant that it is no longer possible for housing rents to cover the amortized cost of construction and operation. We will need to subsidize any additional student housing projects, and until these projects are completed, we will continue our program of providing subsidized off-campus apartments for graduate students. But the severity of the crisis means that we must do more.

As a result, next year, we will add almost 200 off-campus apartments to the approximately 689 apartments currently in inventory. We will also offer a monthly subsidy of approximately $275 to about 300 additional graduate students. A lottery will be held for graduate students who want to apply for the cash subsidy. Through these programs, we will be able to offer some sort of housing or housing assistance to more than 1,100 off-campus graduate students next year. These programs, by the way, will cost over $10 million.

This year we also opened the Stanford West apartments; of the 140 occupied apartments, 10 percent have been rented at below market rental rates, which are approximately 60 percent lower than the open market rate. The remaining 90 percent of the apartments are rented at Stanford rates, which are 20 to 25 percent lower than the open market rate. When we developed this project we created a three-level priority system, with first priority going to Stanford faculty and staff. I am happy to inform you that every single one of the occupied apartments, as well as each of the remaining 488 units that will become available, has been rented to or reserved for a Stanford employee.

One of the most vexing challenges that Stanford and other institutions of higher learning face is the ongoing struggle to diversify the ranks of the faculty. On January 29, I met with representatives from nine major research universities to discuss issues related to the representation and participation of women faculty in science and engineering. The nine universities committed to redress any remaining gender inequities within our science and engineering programs and work toward eliminating barriers to full participation by women faculty. More generally, our third challenge will be to continue to monitor and guard against inequities in the hiring or promotion of any individual at Stanford. Furthermore, we should recommit ourselves to continue the process of adding more women and people of color to both our faculty and staff.

Fourth, as we have all seen, the financial pressures on academic medical centers have become colossal. The reasons for this are complex and include both localized challenges as well as national problems affecting virtually every academic medical center. These problems range from inadequate compensation for patient care from the government and health insurance companies to fundamental conflicts between our research and academic mission and the demands of payers to be low-cost providers. Our challenge in this complex environment is to ensure that we have a hospital that serves both the local community and the educational and research needs of the Medical School. We cannot achieve this unless we can operate our hospitals in a fiscally responsible manner. I view this challenge as second only to that imposed by the local housing market, and the solutions will be equally difficult to come by.

The last, and perhaps most subtle among the challenges we will address today, is the question of how we will continue to innovate in our research and educational programs given the constraints on growth in personnel (both faculty and staff), in space and in dollars. The General Use Permit explicitly constrains both headcount and space, while the financial impacts of a highly competitive and costly local employment market and an endowment that is smaller than our peers on a per student basis leave little financial flexibility for new academic programs. Stanford will, of course, continue to grow, but probably more slowly than it has grown in the past. This will require us to think strategically about where to grow, as well as to constantly reexamine what we are engaged in, with the aim of redirecting existing efforts in new directions to complement whatever marginal growth might be possible.

While these challenges are formidable, I am optimistic that working together we can make significant progress in clearing each of these hurdles. Equally important, I am confident that the members of our distinguished panel will bring insight and creativity to our discussion of these tough issues. I will ask the panelists to briefly address one or more of these challenges, after which I will open the floor to questions for members of the panel or for me.