Communicating With Clarity: Showcasing Your Strategy With Synario

Communicating With Clarity: Showcasing Your Strategy With Synario

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5-year planning at a top-25 institution

The Illinois Institute of Technology is a private, technology-focused university based in Chicago. Voted one of the top 25 STEM colleges by Forbes in 2018, IIT is number one in Illinois for lifting students from families in the bottom 20% income bracket to the top 20% and number two in the nation for overall upward mobility among highly selective private colleges.

When Mike Horan arrived at IIT (as the now-former VP of Finance, CFO, and Treasurer at the Institute), its leadership team was in the process of building out a new 5-year strategic plan. One of the plan’s key pillars was ensuring the institution’s financial health. To test the plan’s impacts, Mike and his team didn’t just need to build forecasts—they also needed to convince key stakeholders of the plan’s viability with solid financial data.

That’s when Synario entered the picture.

Over the course of 2019, Mike, Mary Ellen Borchers (Associate VP for Finance at IIT), and their team rolled out their financial model in Synario. Using the software to stress test different variables (from the size of incoming freshman classes to inflation and tuition increases), their team created a model demonstrating the future financial impacts of their strategic plan. 

Synario helped the team not only build models and forecasts faster and more reliably—it also allowed them to easily visualize their findings and present them in a way that convinced stakeholders they were on the right track. This, Mike and Mary Ellen stated, was the most impactful part of their experience with Synario: communicating clearly in a way that instilled trust and transparency within their organization.

After Mike moved from IIT to Worcester Polytechnic Institute (WPI), he took Synario with him.

financial forecasting plate

Defining “financial health” and setting the base case

One of the main goals of IIT’s strategic plan was to be able to accurately measure and quantify their organization’s financial health. Of course, this meant they had to agree on a definition of “financial health” as it would apply to their plan.

Operational sustainability—making sure revenues and expenses would be supportive of their strategic plan—was a focal point of these early discussions. At the time, 86% of their revenue came from students. But was this sustainable? 

The team also agreed that financial health meant being able to withstand black swan events like the pandemic. They wanted to make sure IIT had a balance sheet that was resilient enough to weather future storms. This could only come through maintaining financial flexibility. This flexibility would put them in a position to capitalize on future opportunities—as Mike said, to “pivot to new options” in the face of the unexpected.

The team then held a long discussion with their board on the KPIs their plan would address, eventually deciding that they would center around four key elements. As Mike stated, “I believe you can manage a university really focused on cash, investments, debt, and operating cash flow.”

Synario setup and stress testing

Once the board had agreed on baseline KPIs, the team used Synario to model what their strategic plan might look like across numerous scenarios. The team utilized 5 years of historical financial results to set their model’s base case, looking at factors like how employee headcounts translated into compensation costs and how student count translated into revenues.

They then projected their assumptions 5 years into the future to see what their financial health might look like if they kept moving forward at the same rate without implementing their new plan.

Next, they started layering opportunities from the strategic plan on top of this baseline. The model was set up to include a statement of activities rolled into their balance sheet, including capital plans, debt payouts, and future debt.

Using Synario, the team was able to toggle each of these opportunities on and off, allowing them to see how even the smallest change could impact their KPIs. (Now, 2.5 years into maintaining the model, each fiscal year’s results are uploaded to help refine future projections.) 

As Mary Ellen recalled, her team played around with a number of different capital plans and timings. When it seemed that members of different departments wanted to try everything at once, her team was able to use Synario to show the impacts of each plan on the KPIs they’d chosen to monitor. As a result, they identified which plans were feasible (and which were not), helping them to focus on what would matter and prioritize accordingly.

But the most meaningful aspect of Synario, Mike and Mary Ellen agreed, was getting everyone on the team involved in developing their plan.

“The model gave us a common sandbox where we could all sit together and put those numbers together and really sync up the interconnectedness of those things… that, in and of itself, was a very fruitful process.”

–Mary Ellen Borchers

ASSOCIATE VICE PRESIDENT FOR FINANCE AT IIT

financial forecasting plate

Source: UT Dallas

Communicating their results

Finally, it was time to take their results to the board. But the board was “not too excited” about the new strategic plan.

“There’s often hesitation in showing the model to the audiences,” said Mary Ellen, “ because you’re showing numbers that someone’s going to latch onto.” But what her team attempted to do, she continued, was to “build trust in the process and measures for accountability and a road map, but not necessarily constrict ourselves to one finite path to get there.”

As the team met with the Enrollment and Provost offices, they used their Synario model to discuss the financial implications of each pillar of their strategy. They were able to sit down and work through the model with them. That eventually snowballed as they rolled the model out to faculty, staff, and other board members.

What Synario ultimately allowed Mike, Mary Ellen, and their team to do was demystify the many factors that went into their plan—how, for instance, they could take student occupancy numbers and translate them into revenue. Unlike other financial modeling and projection tools, Synario helped the team build the necessary logic to match the way their institution behaved in the real world. Relying on more than just simple percentage-based growth rates, Mike and Mary Ellen could communicate with key stakeholders the impacts of the plan in a clear, tangible way (number of beds, number of residents, and more).

Synario’s modeling tools helped them easily engage decision makers and explain how they could refinance debt, show faculty and staff how they had arrived at their solutions, and build up more trust in their organization’s financial health.

“It just gives people the feeling that you’ve really thought through everything,” said Mike, “and that you’ve really taken the risk out of the numbers… It gives them some confidence.” Mike emphasized that Synario let them “really tell our story with numbers and support those numbers with the model.”

Thanks to Synario, the team’s 5-year plan was given full board approval. 

And when Mike moved to WPI, he brought Synario with him. While the institution used to work backwards to find a solution (e.g., “I need this many students in order to make this model work” or “I need this many credit hours”), Synario enabled Mike and his new team to make projections in real-time. 

This brought a key transformation to his organization. Rather than taking a top-down approach (in which leadership roles direct what is needed), Mike could now approach key stakeholders and ask what institutional changes could be made, given the right resources. This shift both puts accountability on the right people—those responsible for executing the strategic plan—and achieves the necessary buy-in to organization-wide plans.

“The board here actually stood up and clapped for us, they were so excited about it. And what they loved was that you could stress test these different things in real time.”

–Michael Horan

FORMER VICE PRESIDENT FOR FINANCE, CFO, & TREASURER AT IIT; CURRENT EXECUTIVE VICE PRESIDENT & CFO AT WPI

See what Synario can do for you

Even in the face of the pandemic, IIT forged a successful path forward. Despite the uncertainty of 2020, the team had all the tools they needed to confidently analyze the numbers and arrive at reliable, data-driven decisions on how to get back on track in the wake of the unexpected. 

“The infrastructure is now there,” stated Mary Ellen. “So, when we do hit a pandemic, and we’re going, ‘Oh, my God, woe is us,’ we can sit down and the pieces are there to examine various ways and test various plans and decisions, as opposed to flying blind.”

Mike and Mary Ellen relied on Synario to keep their organization financially healthy and fit enough to get through the pandemic. What about your organization? Are you ready to see what Synario can do for you?