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When Brett Powell is asked what distinguishes his day-to-day role as a finance leader inside the world of academia from that of his CFO peers residing within industry, Powell without hesitation says, \u201cComplexity.\u201d

Aware that such a one-word answer would likely summon only more questions, Powell continues: \u201cEssentially, when you think about it, we\u2019re running a city \u2026 we house people, we feed people, we provide them with utilities. Everything that\u2019s required to run your hometown needs to be replicated on a university campus.\u201d

Still, Powell points out that one of the fundamental differences has to do with an organizational mind-set when it comes to cost allocation and subsidization. 

\u201cCorporations will look at each of their product lines and try to understand the profitability of the product, and if one is losing money, then they just end that product line and move on to something else\u2014but we don\u2019t think about academic programs in the same way,\u201d comments Powell, who adds that during a previous CFO tour of duty he had created a resource allocation model for a \u201cresource-restrained\u201d university, only to quickly discover how cross-subsidization activities between the different departments and programs added new layers of complexity.

\u201cJust putting the data in front of people was not enough\u2014they needed to really understand the perspective and the strategic direction that we were trying to follow,\u201d remarks Powell, who notes that he would often find himself helping different department heads to understand why getting less of a subsidy wasn\u2019t always a negative for their department.  

Says Powell: \u201cIf a university\u2019s business school is generating so much profit that it can subsidize other programs by a certain amount, then we need to think about how this subsidy might be able to grow if the business school were to invest more\u2014and to understand how all of the other programs might ultimately be able to gain from the business school\u2019s success if we started to make such decisions differently.\u201d \u2013Jack Sweeney