Thanks to the generosity of David and Judy Frey, John Kao was in town to talk about innovation as a Frey Distinguished Visiting Professor. Before his public talk, he came to the studio to talk to me about innovation and related topics.

John definitely has the big view of innovation. He has written on the relationship of jazz improvisation and business in Jamming, and on the “wicked problems” that the world is facing that need broad thinking in Innovation Nation. John played keyboards in 1969 with Frank Zappa and the Mothers of Invention during the Burnt Weeny Sandwich and Weasels Ripped My Flesh era. Here’s our chat, which includes Zen, jazz, and “beginner’s mind.”

Last month, Entrepreneur magazine listed the 10 documentaries every entrepreneur should watch, and #3 is “Standing in the Shadows of Motown,” which is given because “It’s a top priority to place incredible people in your business’s high profile executive positions. But, it’s equally (if not more) important to staff the less visible support positions with gifted individuals.”

We have had musical selections that have involved some of the greatest session musicians of all time.  Here they are with the songs from our playlist given.

The Wrecking Crew.  These are the folks that backed up all of the singers on the Phil Spector records and the Beach Boys, among others.  Notable members are Hal Blaine (drums), Carol Kaye (bass), Tommy Tedesco and Glen Campbell (guitar), Leon Russell (piano).  You heard The Wrecking Crew on “Be My Baby.”

The Funk Brothers.  They were the backup band for the Motown artists.  James Jamerson was on bass and Pistol Allen on drums with others.  You heard the Funk Brothers on “My Girl.”  Bob Babbit often replaced James Jamerson on bass in the later era.

To truly understand the artistry of The Funk Brothers, here they are playing “My Girl” without the lead vocals.”

Other well-known session bands are Booker T and the MGs (who played on the Sam and Dave records and starred in The Blues Brothers movie) and The Swampers from Muscle Shoals, AL.

These are the unsung heroes of American popular music.  Enjoy.

Finally, Rawlings cited intercollegiate athletics as an area that poses for challenges for public research universities. Clearly, that has been the case at Carolina for more than two years. We must make sure that student-athletes succeed in college and have meaningful academic experiences, that the economic factors surrounding college athletics are managed appropriately, and that the intense public interest in intercollegiate athletics doesn’t take away the ability of the university to tell the rest of its story.

While we have struggled with these factors, I believe we have a plan in place to deal with these challenges and move forward. First and foremost, I felt great about hiring Bubba Cunningham as athletic director last year, and I feel even better about it now. He has been working collaboratively with admissions, Arts and Sciences, and my office on the challenges we face. The conversations that are taking place are important and, in some cases, difficult. But these are conversations that need to happen, and I’m grateful to our faculty leaders and administrators who are so strongly engaged.

Second, I believe that we have a program for putting the past challenges behind us. We have already made numerous changes in academic support, compliance, and the monitoring of teaching loads. The work of Governor Martin, Baker Tilly, and the BOG panel will allow us to identify any additional problems and address them. While I have not insisted on any particular timeline, I’m hopeful their work will wrap up this fall.

Third, I have asked Hunter Rawlings to come back in the spring to lead a campus discussion on these challenges. One of the things that is very important is for us to realize that we have a collective, campus-wide responsibility to do things right. We can’t expect one part of the university to carry all of the responsibility. I believe that a silver lining of all that’s happened will be the realization that something as public as intercollegiate athletics cannot be relegated to a section of the university.

I have said from the very beginning that success in intercollegiate athletics is important for Carolina. It’s true for essentially every US research university in one way or another. Even with everything that we’ve been through, I haven’t changed my mind. I believe that the steps that we have outlined and the people we have in place will get us where we need to be.

The next force cited by Rawlings was ‘ideological difference.’ I think the best way to think about these differences is to break down the concepts into the issue of what a college education should be and how people get access to it. This really breaks down into three questions (a) the nature of a liberal arts education, (b) how many people should get a four-year college education, and (c) how should we ensure that everyone who qualifies for a college education gets a chance to get one. So here are my thoughts on these three aspects:

Importance of liberal arts. I always talk about how important a liberal arts education is to the future of N.C. and the U.S. In my travels around the world, I see the extraordinary efforts that other countries are making to emulate our liberal arts model. Indeed, I believe it’s the most important distinguishing feature in differentiating the trajectory of the US economy. (The Ivy League universities were formed prior to the formation of the US federal government, and Carolina was chartered in 1789, the same year George Washington was inaugurated.)

Imagine if, 20 years ago, someone came to us and told us to write a vocational curriculum to prepare the information technology workers of today. The college students of 1992 are 38 years old today – at the peak of their working careers. But we could never have imagined in 1992 that we would today be carrying computers in our pocket that we can use to watch television, access the world’s information, and communicate voice and video to anyone in the world. Instead, what we did in 1992 was what we did in 1892 and 1792, which was to teach students to learn and how to understand the world. We prepared students for jobs that hadn’t been invented yet. Vocational training can only prepare students for the jobs that exist now. That won’t cut it. That’s why we have to stay committed to the liberal arts model.

College attainment. There’s a lot of talk now about how many people should get a college degree. President Obama called several years ago for the U.S. to be #1 in the percentage of young people getting a college degree. Philosophically, I agree. But practically, we need to be mindful of the true capacity we have to produce high-quality degrees. I don’t believe Carolina should aspire to produce a huge number of additional degrees, and I think we need to be careful about advocating for a dramatic increase in college degrees if we’re not prepared to step up and produce a lot more ourselves.

One place where I think we can increase degree attainment is in getting more students to complete college. There are 23% of North Carolinians who have some college. Getting those individuals to a college degree is a worthwhile goal for the UNC system, and Carolina should be a partner.

College access. The way to keep graduation rates high is to make sure the most qualified and motivated students are the ones attending college. And the best way to do that is to make sure that the most motivated and qualified students are the ones who have the opportunity to come to college. The financial aid system is a must in ensuring that we enroll the best possible class. People don’t always realize that financial aid is not something we do just to give students an opportunity – it’s also what we do to attract the best students.

Read more about students who get financial aid at Carolina.

At the September meeting, the BOG wisely voted to give campuses the ability to determine how much tuition to set aside for financial aid.

The third force mentioned by Rawlings is the tension between systems and flagships. In some states, this tension has caused friction between system governing boards and flagship presidents that has led to turnover. Rawlings cited Illinois, Oregon, and Wisconsin as examples.

When I first went to work for Erskine Bowles, he made it clear that the system chancellors had to work together as a team, and President Ross has promoted that atmosphere as well. I truly value my relationships with my sixteen brothers and sisters in the system and consider them my closest professional colleagues. I believe they would say the same.

Last year, when we had the very large budget cut, Carolina took a larger share of the cut to help out some of the smaller campuses in the system. We passed this cut to the School of Medicine, which was able to use clinical income to offset the reduction. Over time, we’ll repair that shortfall, but I believed then and still do that it was the right thing to do. A crippling cut to one of the small campuses in the system would have been detrimental to all of us in the long run.

As with all these areas, there are ways that Carolina and the system can work together better in the future. In particular, it’s a challenge to keep clear the roles of the campus board of trustees and the system president and the board of governors. The BOT is closer to the issues on the campus, but the system president and the BOG have much of the formal authority. I believe that it would be better for the BOG to delegate more to the campus boards because the campus boards are more aware of the issues on the campuses. In exchange, the chancellor and BOT would vow to be good partners with the system in the way we were in the summer of 2011. The counter-argument is that the BOG can think more holistically about the needs of the entire state and system, and I understand that. This discussion has been ongoing since Bill Friday first set up the two-board arrangement decades ago, and it will continue long into the future.

I plan to post more next week.

Rawlings’ second force facing public research universities is the complexity of the institutions. Rawlings refers to this as ‘corporatization,’ and certainly there are ways in which the complexity that universities have taken on in the past few decades has forced behavior more akin to that of a corporation. Further, there are many collaborations that universities need to foster with corporations.

Here’s what I think Rawlings is really getting at. The chancellor of a public research university leads academic units and various kinds of student services like advising and study abroad that most people would associate with higher education. But in addition to that, universities have police departments, fire departments (we share ours with the town of Chapel Hill), a hospital (ours takes care of 1 out of every seven North Carolinians who goes to the hospital), a hotel, residence halls, a student health operation, a multi-billion dollar endowment, a communications operation, a computer network with 50,000 users, a dining plan, housekeepers, grounds workers, architects, and on and on. There’s not a lot of coursework in graduate school about how to run all these things.

So there’s the conundrum that Rawlings lays out. Nearly all faculty, most students, and most staff expect the leader of a university to be someone with academic credentials who published and got promoted through the academic channels from graduate student to assistant professor and on upward. But only upon promotion from provost or dean to chancellor does one find herself with a police chief as an employee.

This area is one where Carolina has made significant strides, particularly in the area of labor relations and town-gown relations. We have worked extensively in the past 18 months or so on resolving many lingering issues in housekeeping. I consider this one of our administration’s greatest accomplishments. I can’t tell you how much it meant to me to have James Holman (housekeeper) and David Brannigan (grounds) appear at the rally after I announced my intention to step down. It made me feel like all the work we did on labor relations paid off. I’m confident that we can continue that rapport into the next administration, and Jackie Overton and I are committed to making sure that happens.

I was also thrilled to see the mayors of Chapel Hill and Carrboro at the rally. Patti and I had set as critical goals the establishment of collaborative relations with Chapel Hill and the surrounding towns. We came up with a lot of things to do to help with town-gown relations the past 5 years – logical compromises on the Carolina North agreement, setting aside the Parker property for conservation, working with Self-Help on preserving the Northside neighborhood, collaborating closely with the town on the University Square project, and many others. But mainly, we just spent a lot of time listening to and talking with town and county officials. It was fun.

But there are other areas where we can improve the next nine months and beyond. The overall level of oversight in many of our business transactions needs to continue to improve, the security of our computer network is a major challenge for us and all large universities, and we need to complete the installation of PeopleSoft as our finance and HR computer system. This latter project is critical, as the lack of good data on transactions underlies many of the operational problems that we encounter. Karol Gray has revitalized these efforts, and I know we will complete them on schedule.

We must.

Hunter has a special vantage point – he is the president of the American Association of Universities, which represents the top 61 research universities in the country. Carolina is celebrating the 90th anniversary of our invitation to the AAU, which is the most prestigious higher education association.

Before heading the AAU, Hunter was the president of the University of Iowa and Cornell University. His academic field was classics, and he was a student-athlete at Haverford.

In his talk, Hunter outlined five forces of concern for public universities. Some of these are areas where Carolina has had challenges, and others are areas where we are doing much better than our peers around the country. These areas are:

1. Strain on state budgets.

2. Complexity of universities as organizations.

3. Relations between systems and flagships.

4. Public sentiment about liberal arts education and college access.

5. Intercollegiate athletics.

In the coming weeks, I will post a blog entry about each of these points, laying out the challenges posed by each, but also how I think Carolina is poised to outperform our peers in each area.

The first challenge is the strain on state budgets. Everyone at Carolina is well aware of this strain, given the steps that we have had to take the last four and a half years to deal with problems in the state budget.

The budget problems arise from multiple sources. Of course, the economic downturn that started in the fall of 2008 has been a huge factor in lowering tax collections and state revenues. But increasing health care costs also play an important role. Nearly every year, the state health plan and Medicaid require additional funding that usually takes precedence over spending on other items.

In addition to these budget pressures, there is a lack of interest in raising taxes to offset these losses – and that is true in many other states besides North Carolina. Two years ago, a temporary sales tax expired, which created the need for the large cuts that we made in the summer of 2011. Thankfully, revenues held steady in 2011-12, and measures were taken to correct the shortfalls in Medicaid so that we could give employees raises this summer. We are grateful to the General Assembly for this year’s budget and the flexibility to provide salary increases to our faculty and staff.

The state budget shortfalls have created a need to raise tuition more than we would like. But the revenues received from the tuition increases have been vital to restoring our ability to retain faculty and providing salary increases. And even with the recent increases, Carolina’s tuition remains the absolute lowest among our peers selected by UNC General Administration.

It occurred to me right at that moment the extraordinary symbolism of Bill Friday’s death occurring on University Day. I had just watched the John Adams biography this summer, and it made me think about John Adams and Thomas Jefferson dying on July 4. (The News and Observer mentioned that point in their story, as well.)

The University Day ceremony in Memorial Hall was unforgettable. We talked about Mr. Friday and his legacy, and Jamie Bartram gave a great talk about our work on water. Mr. Friday would have approved of our looking beyond ourselves and our campus to such a great problem. He was so concerned about equity and the ability of others to access resources.

The smart people I work with got flowers and organized the placing of those flowers at the Old Well by the processional. It was just the right tribute.

North Carolina lost one of its most remarkable citizens in Bill Friday. His influence on public higher education in our state and across the nation is legendary. In a lifetime devoted to public service, Bill Friday was committed to providing access to high-quality, affordable higher education to North Carolina students. He was tireless in his efforts to underscore the importance of higher education to people from all walks of life, as well as to our state’s future prosperity.

I always admired his conviction to defend academic freedom and freedom of speech. It was only fitting that Mr. Friday joined us a year ago – on University Day – to dedicate the Speaker Ban Marker in McCorkle Place documenting the efforts that our own students and he made to overturn a misguided law.

Mr. Friday was exceedingly gracious in sharing his wise counsel with me when I became chancellor. Whenever he wanted to see me, he always made an appointment to come to South Building. I told him how much I liked walking over to Hooper Lane to see him, but he always insisted on coming to my office. When I was a young faculty member, I used to go see him at Graham Memorial, and in all those talks, his keen insights and common sense were unparalleled. Like so many others throughout North Carolina, I will miss Bill Friday, but I know that his legacy – especially at our University – will always live on for future generations.

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Thank you, Bland (Simpson), for allowing me to be with you today. Today is an important celebration. I’m pleased to be able to welcome you all on behalf of the university. And it is one of the great honors of my life to have known Doris Betts and to have the chance to say something about her and her impact on Carolina today.

Originality is the touchstone of a research university. Its pursuit guides our scientists, our humanists, our writers and our artists. Conveying the rigors of originality guides our teaching. Our students come here to learn what it means to create. To create knowledge, art, ideas and the future.

Creating is lonely. It takes a toughness few understand. It takes courage to redo experiments and rewrite sentences. Thankfully, there are those who have what it takes. And no one had what it takes more than Doris.

When Randall Kenan and I were students here in the 1980s, Doris Betts was Carolina’s most famous professor. The lines outside her office in Greenlaw stretched for miles. And when she came out of the building, her star power moved across the campus. She was successful enough to leave if she wanted to. At the time, I wondered why such a famous writer would stay in the university, but when I became a college professor myself and then got to know her later, I knew. Those of you who knew her then already understood it. She had to teach. She had to be with the different kinds of people that you find at a place like this. And she had a lot of questions she wanted to ask.

Doris provided great counsel to me and, I’m sure, to my predecessors. She knew what the university was for. When the retired faculty voted her to the faculty council, she attended dutifully. She always stopped me to tell me things were going fine even when it seemed like they weren’t. She was right, because she knew the students, staff and faculty would keep learning and keep creating and keep asking questions no matter what.

It is hard to imagine an endeavor that has shaped the narrative of Carolina more than creative writing. It demonstrates our ideals of originality, equity and democracy. No one lived by those ideals more than Doris Betts.

Thank you all for being here.

It was gratifying to hear President Obama talk on our own campus about college affordability, support for public universities and other subjects that are important to us.

When the history of the university of the last few years is written, April 24, 2012 will be an important date. Whenever a sitting president of the United States visits a college campus, it is an important day in the university’s history. The visits of Jack Kennedy, Bill Clinton, James K. Polk and others are fondly remembered, highly documented occasions for Carolina. Special thanks to all the folks from University Events, Campus Police, Grounds, Student Affairs, Athletics, Carolina Performing Arts and University Relations who made it all possible.

A highlight for me was introducing faculty chair Jan Boxill and Employee Forum chair Jackie Overton to the President. I’ve had the opportunity to meet him twice before, but Jackie and Jan were meeting him for the first time. What a thrill for the two of them!

The visit of President Obama yesterday was exciting because he came here specifically to talk about higher education. During his talk, he mentioned college affordability, of course, but he also talked generally about support for public universities, basic research, curing cancer, and clean energy. These are topics that I talk about myself constantly, so personally, it was gratifying to hear a sitting president talking about these issues on our own campus.

I and my colleagues around the country have been saying that this is a pivotal moment in higher education. Just in the last week, I have served on panels moderated by Walter Isaacson (at the New York Ideas festival) and Gwen Ifill on these topics. People are asking questions like “is the business model of higher education broken?” I don’t think it is, but I do think we need to show decisively and urgently that higher education can adapt to the challenges before us. Having President Obama come to campus to talk about these things reinforces that urgency.

There isn’t a single answer to the challenges ahead of us. We need to address all of the big issues: The nature of undergraduate education and the delicate balance of providing students with job-related skills and a worldview that prepares them for citizenship in a changing world; The financial aid system and ensuring that everyone has a fair chance at a college education; The costs of higher education and making sure that we keep both the cost and price of college as low as possible; and The story of our research and its impact both in the near term on pressing problems facing the world and in the long term on providing a basis for education in the future.

We welcome the President’s comments about college costs. As he said in his talk, the average student who owes money in the US has a debt of $25,000, but at Carolina, only 35% of our students borrow money, and these students only owe an average of $15,000. We want to keep these numbers low; in fact, we’ve devoted the last 200 years to making sure we have this story to tell.

We’ll be writing and talking much more about these topics in the months ahead, and in the fall, we’ll have a series of conversations on the campus about the areas where Carolina needs to lead in addressing the challenges facing the nation.

As I said yesterday, there’s no better location for the President of the United States to talk about college affordability than the place that invented public higher education.

We are the light on the hill.