HSA Reexamines Corporate Structure, Focus of Agencies

Later this month, Harvard Student Agencies (HSA), the largest student-run corporation in the world, will learn the results of a year-long consulting study. The report will guide the organization as it restructures itself in the wake an imbalance in profits and a constant shortage of space.

"I anticipate that [the report] will focus mainly on the governance of HSA, meaning senior staff" and will also have "an accounting aspect," said incoming President Noble M. Hansen '00.

A Growing Family

Since fiscal year 1994, HSA's revenues have grown an average of 14.65 percent each year-due in large part to strong profits by its one for-profit subsidiary, Let's Go Publications, which yields nearly half of HSA's total revenue. Last year HSA turned about a $500,000 profit, which was reinvested in the company, according to Catherine J. Turco '99, outgoing HSA president.

And with the purchase of a $3 million building on Mount Auburn St. come the costs of maintaining it, and the organization still finds itself looking for more space to grow--a challenge in Harvard Square, where space and rent are at a premium.

Meanwhile, HSA is one-third of the way from finishing a $3.5 million capital campaign.

"HSA is going through a strategic planning process," Turco said. "You need to determine where you are today, where you want to go and how you want to get there."

This month, the HSA board of directors will try to do just that, based on a report on HSA's corporate structure and finances by Technical Development Corporation, a Boston consulting firm.

HSA is a not-for-profit corporation founded 40 years ago to provide students with jobs. It is divided into 10 agencies, 9 of which are not-for-profit.

Though the company owns its assets and is governed largely by current undergraduates and HSA alums, 7 of its 24 board members are University officials.

Georgene B. Herschbach, an assistant dean of the College and a member of the executive committee of HSA's board, is one of the administrators charged with over-seeing HSA.

She predicts that HSA will need to answer four questions in the coming year: what level of professional staff is needed, Let's Go Publications' growth and corresponding needs, Let's Go Travel's potential for growth, and how to advance new ventures, especially on the Web.

Our House

Purchasing a new building at 67-69 Mount Auburn St. two years ago brought a host of new expenses like mortgage payments and maintenance costs that HSA didn't have when it rented space from the College on Church and Story Streets.

While HSA officials say the move improved efficiency by combining resources under one roof, the "cozy" fit may become cramped as the company continues to grow.

"I think we can get another year or two out of the space we have," Turco said. "We are going to begin looking immediately."

Right now, The Wrap, BankBoston and the Tennis and Squash Shop occupy space on HSA's first floor, but expanding the company's offices into that space would sacrifice significant revenue that the stores and the bank pay in rent.

Agencies discovered in-house opportunities "driven by the need for internal technology services," Turco said, but the building demands that HSA managers think more about the whole when considering their individual ventures.

Rather than pursuing risky entrepreneurial ventures, HSA managers may want to make conservative investments in traditional, service agencies like HSA Cleaners and Harvard Distribution, Herschbach says.

Sibling Rivalry

Let's Go Publications made 49.8 percent of HSA's revenue in fiscal year 1998. More than 22 percent of HSA's student employees work for Let's Go and they are paid 39.14 percent of the total wages.

The agency--which started out by publishing a photocopied brochure of travel tips for student travelers in Europe--has now expanded to six continents and adds a new guide every year. During the past six years Let's Go has published new guides for Thailand, India and Nepal and China.

Right now, Let's Go is in the midst of renegotiating its contract with St. Martin's Press.

"You look at what potential Let's Go has, and any observer would say they aren't able to fully develop right now," Herschbach says. "The Let's Go arm brings in a major part of their income."

Other agencies are less focussed on profit, placing job opportunities for students above the bottom line.

Let's Go's expansion finally got to be too much for its publisher. Last summer then-publisher Anna C. Portnoy '99 redesigned the agency's management, splitting the top job between a publishing director and an editor-in-chief.

"The organization has changed but the ongoing structure is perhaps not right for the future," Herschbach said.

Role Playing

Hansen says this is an opportune time for HSA to reconsider its corporate staff. Of eight full-time professionals, two are now on leave.

"What I'm interested in is more tightly defining their roles so they can have a clear definition of duty," Hansen says, speaking specifically of the position of general manager which lacks a clear job description.

"A lot of things have happened to those positions over a long period of time," Hansen adds.

Turco has already made changes based on the consultant's report, consolidating Harvard Catering and Harvard Student Resources. And Let's Go Travel shifted its focus to selling weekend getaways, rather than selling flights.

"I used the tools that I learned from watching the consultants...to do it on a micro level," she says.