My reports this year will be organized around a central theme, the theme of "exit, voice, and loyalty", which is the title of a classic book by the economist Albert Hirschman. Hirschman looks at responses to decline in firms, organizations, and states, and argues that people can fight decline either by exiting (voting with their feet) or voicing their complaints (voting, protesting etc). But both exit and voice are affected by loyalty, one's underlying attachment to the organization. In today's report I want to focus on loyalty, specifically the loyalty of the faculty to the university, a notion that might have been overlooked in recent events. I will talk about loyalty, which I define as faith in and attachment to the university, and the very real benefits the University gains from loyalty. And I will talk about stability and continuity, which are necessary but not sufficient conditions for loyalty, that is, faculty must be around awhile to develop loyalty but they do not necessarily develop it. Certain conditions must be present before loyalty springs up.

First, what are some indicators of continuity? Obviously longevity is one: many faculty are here for the long-run, while the other components of the University--students, administrators, and regents--come and go more quickly. I have been on the faculty 23 years but many others have been here much longer. In fact, 423 faculty members have served 30 or more years; 38 of those, 40 or more years. This institution would not be what it is today without those people having made a long-term commitment. They are among your most loyal and devoted faculty members. In my own department there are 7 members, out of 25 or so, who have served longer than 30 years. I daresay when people think of the Political Science Department at Minnesota they are thinking of these seven faculty members. Having a stable core would be true of many other departments, particularly the best ones.

The stability of the faculty has in turn contributed to the stability of the university as an institution. As pointed out by the Carnegie Council on Policy Studies in Higher Education, some 66 institutions that existed in 1530 still exist today--the Catholic Church, the Lutheran Church, the parliaments of Iceland and the Isle of Man, and 62 universities. Thus universities among all institutions are remarkable for their historic continuity.

So far we have dealt with stability; what are some signs of loyalty? One is that faculty go way beyond the call of duty in their jobs: they work long hours, averaging 55 hours a week; they work in the summer when they are not on the payroll; with the introduction of E mail, fax, and cell phones, they are available around the clock and around the world to consult with students and write letters of recommendation. A singular example of faculty loyalty occurred during the last capital campaign in 1985-88: the goal for the faculty was $3 million; their actual contribution was $11.3 million!

And I would say that the recent tenure battle is, perhaps counterintuitively, a prime example of loyalty. Hirschman says that the likelihood of voice increases with the degree of loyalty: a member with considerable attachment to the organization will search for ways to make himself/herself influential, especially when the organization moves in what he believes is the wrong direction. Quality-conscious members who are loyal will try voice before exiting. That is exactly what happened here in recent months: many faculty members, fearing that detrimental changes in the tenure code would lead to a decline in the quality of the institution, came to the defense of their institution.

Now I want to turn to the collective value of loyalty and stability for the institution: what difference does it make when we have a core group of long-term faculty? Or what is the difference between the Minnesota Twins and a pick-up baseball team? It makes a difference in teaching: when students come back to campus, they want to see their old professors. When alumni donate money, it is often to advance programs of their old professors. A constantly changing cast of characters would be much less attractive to our donors and to our graduates more generally, as we heard from the University Foundation last month.

Having a stable core of faculty is important in research: research projects are often long-term, so keeping a research team together is important. In fact, it is well-documented in the literature that one of the distinguishing features of a productive research group is the length of time the group has been together. The Minnesota Twins study is an example: the core investigators have been together for many years and have followed the same subjects over time. Their results have brought much attention to the university; it is widely known as the "Minnesota Twins Study" after all. This stability pays off in terms of our reputation and our national standing. Berkeley is ranked #1 not only because it has the best faculty in the country but also because it has more senior faculty. Similarly, Minnesota's best departments tend to be very stable; their reputation is enhanced from having core faculty in place over many years. And this has paid off financially as Minnesota investigators rank among the top in research dollars generated.

Having a work force committed for the long-term is thought to be essential for a productive organization. Frederick Reichheld in his recent book, The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value (Boston: Harvard Business School Press, 1996), compared companies that thrived versus those that failed in our turbulent times. He found in all the industries he studied that "the companies with the highest [employee] retention rate earned the best profits. Relative retention explained profit better than market share, scale, cost position, or any of the other variables usually associated with competitive advantage. It also explains why traditional management techniques [such as downsizing] often backfire in chaotic ways" (p. 23). Reichheld found "that business loyalty has 3 dimensions--customer loyalty, employee loyalty, and investor loyalty--and that they are far more powerful, far reaching, and interdependent than we had anticipated or imagined" (p. 3). The linchpin of these three, however, is employee loyalty. Without employee loyalty it is not possible to maintain a loyal customer base, in our case student base, or investor base, in our case donors and funders. This is why so many management experts, such as Tom Peters or Reichheld, argue that continuous employment is the key to creativity, productivity, and organizational "nimbleness". Thus, it behooves us to identify what characteristics increase loyalty to this institution.

The most important factor in building faculty loyalty is having excellent colleagues and students, both graduate and undergraduate. Faculty members like to work where exciting research and teaching is going on, where colleagues present pathbreaking ideas, where they can mentor the next generation of leaders. We can stick with the institution through "thick and thin" when the atmosphere is intellectually exciting.

Another critical factor is the feeling that faculty are appreciated for their contributions: in part this feeling is a reaction to the rhetoric of leaders such as yourselves, the governor, and the legislature. When in the tenure debate the emphasis was on getting rid of faculty, the tone tended to diminish loyalty. On the other hand, rewards and recognition events reinforce loyalty, for example, when you recognize the McKnight Land Grant Professors or the Morse/Alumni Distinguished Teaching professors as you do. Other actions which instill loyalty are community building events such as the president's state of the union address. I recall last year's address as particularly memorable when a short videotape highlighted various improvements in the undergraduate experience. I was proud of my colleagues for bringing about these changes. Another memorable event is the president's departmental excellence awards where for selected departments he invites faculty members and their spouses to Eastcliff for dinner and a ceremony. At the occasion for the Political Science Department, I noticed how much the younger professors were impressed by this honor.

And of course, loyalty is reinforced by one's salary, tenure, and overall working conditions. For faculty to make a commitment to the institution, they need to feel that the institution is making a tangible commitment to them. Here we need some improvement: I think as many faculty are discouraged by their dusty offices and dirty windows as are discouraged by their lagging salaries. We very much need to make this a great place to work, and I hope the fulfillment of the biennial request and the resolution of the tenure crisis will facilitate this.

I hope I have shown the importance of faculty loyalty and the immense loyalty that faculty have had for the University. Loyalty is essential for creativity, stability, and productivity. But it cannot be taken for granted. It must be continually nourished and cherished.