Needed: Business-Minded College Presidents

After thirty years in the international chemical industry, followed by thirteen more on the faculty and staff of a liberal arts college, I have learned a thing or two about how business CEOs and small college presidents operate.

Their management styles usually differ greatly, influenced by the environments in which they worked for many years. 

Those with long tenure in the academic world became accustomed to operating in an environment in which change generally came slowly. The rhythm of recruiting, admitting, and graduating students was fairly predictable. Academic programs were finely tuned on an incremental basis, after much deliberation and consensus building among faculty.

But that sedate and predictable world is mostly gone, replaced by a new world of demographic, economic, social, and political upheaval. That new world calls nearly every aspect of the old higher education model into question.

Through their experience, business executives are well-equipped to respond to unanticipated market changes, competitive threats, and know how to capitalize on strategic opportunities. Therefore it’s somewhat surprising that most small colleges continue drawing their presidents almost exclusively from the academic ranks.

There are, however, exceptions and it is useful to consider how a business-minded executive can benefit the academic enterprise.

Stephen Spinelli, Jr. has served as president of Philadelphia University since 2007. His decidedly non-academic earlier career was highlighted by his role as founder and CEO of the enormously successful Jiffy Lube, where he worked from 1979-1991.

Lured by the siren song of an academic second career (I can relate to this), he obtained a Ph.D. in economics and then served at Babson College, rising from lecturer to vice-president for their program in Entrepreneurship and Global Growth. That initiative, which trains private and public sector leaders in how to develop ecosystems that integrate policy, finance, culture, human capital, and markets, enabled Babson to become a global leader in entrepreneurship education.

When he became president of Philadelphia University, Spinelli immediately saw the perils facing the institution. Tuition had been rising steadily in a market characterized by lower income families. The school had a small undergraduate enrollment of fewer then 3,000 students and its modest ($28 million) endowment wouldn’t be a material help.

The university was struggling to increase enrollment. Its problem was having to compete for the attention of graduating high school students who had dozens of other, larger schools in the region to consider, including five larger universities in the city itself. 

Spinelli determined that the university needed to gain critical mass, so he negotiated a merger with nearby Thomas Jefferson University. President Stephen Klasko of Jefferson was a natural partner and receptive to the move, having recently shed one alliance with a local health system and replaced it with two new health system mergers in the last couple of years.

The merger will be finalized this June, uniting Philadelphia University’s focus on design, commerce, and the liberal arts with Jefferson’s well-regarded programs in medicine and nursing. Joining these two small schools will boost the combined total enrollment of the new entity to 7,500, large enough to “break through the noise,” as Spinelli phrased it, and to establish a more prominent identity in the minds of potential students.

In addition to developing broader academic offerings and achieving more visibility in the market, the merger will also lower administrative expenses. For starters, one CEO position is eliminated. Klasko will continue to lead the unified organization, with Spinelli moving to the Thomas Jefferson board. The elimination of other administrative positions will follow, resulting in cost reductions, as happens with all mergers in the corporate world.

Not far from Philadelphia, recent economic deterioration in the small town of Lancaster, PA, posed a growing problem for local liberal arts college Franklin & Marshall. Increasing local blight threatened their student recruiting efforts.

Enter John Fry, recruited from his post as executive vice-president at the University of Pennsylvania. Although his career was always involved with higher education, he was not an academic in the traditional sense. Lacking a doctorate but possessing an uncommon skill for commercial development, Fry created a number of partnerships between Penn and the local community that successfully addressed the issues of poverty, unemployment, and crime that surrounded the Penn campus. 

Hired as president of Franklin & Marshall in 2002, Fry quickly moved to apply these same skills to the city of Lancaster. Working with the Pennsylvania Downtown Center, the college provided the financial and human resources to create a local “Main Street” program; entire blocks adjacent to the campus were redeveloped into an attractive mix of housing and retail space. This made the campus more attractive to incoming students, bolstering its admissions efforts.

Drexel University, located adjacent to Penn, faced similar community development challenges, so it was no surprise when Fry was recruited to become Drexel’s president in 2010. Under his leadership, Drexel just announced a $3.5 billion development project that will add a mix of office, hotel, and commercial space immediately adjacent to their campus.

So here we have two non-traditional college/university presidents, one who started a chain of auto service centers before entering academia as a second career, the other who used his community development skills to overcome some decidedly non-academic challenges at three higher education institutions. Each led important change initiatives of the kind not traditionally associated with academic leaders.

Is this a call for boards to consider business-minded executives for their future presidential openings? Absolutely, but only if the candidate’s business skills are complemented by a positive leadership style. 

Consider the recent case of Simon Newman, hired in December 2014 as president of Mount St. Mary’s University in Maryland. Newman came from a non-academic background. His thirty-year career in finance included acting as CEO of Cornerstone Management Group.

Newman determined that he needed to focus on boosting the university’ academic profile and decided that the proper tactic was to jettison a significant number of low-achieving students from the freshman class. The student paper reported that he characterized these students as not “bunnies to be coddled” but rather to be “drowned or killed with a Glock.”

Although clearly metaphoric, his remarks provoked understandable faculty outrage, which Newman then compounded by firing (and later reinstating under pressure) two faculty members, along with the demotion of a provost. As a result of the furor he caused, Newman resigned at the end of February.

Spinelli and Fry responded decisively to serious challenges facing their educational establishments. But they did so with broad faculty, staff, and community support. Newman may have some strong business skills, but he ruined his efforts with poorly worded statements and by engaging in conflict with faculty members.

College board members should remember that the greatest academic programs are pointless unless the institution continues to thrive. Given the changing world of higher education, this may require them to look for non-traditional skill sets in presidential candidates—a mind for business in particular.

As Steve Jobs might say, they need to “think different.” That may not be grammatically correct, but it might be exactly what is needed.