Helen Dragas points to positive outcomes of U-Va. leadership crisis

Helen E. Dragas, CEO of The Dragas Companies, just ended her tenure as leader of the University of Virginia Board of Visitors. In an interview with The Washington Post, Dragas shares lessons she’s learned along the way. (Casey Capachi/The Washington Post)
July 6, 2013

Helen Dragas regrets the turmoil and anger that enveloped the University of Virginia last summer after governing board leaders privately asked U-Va. President Teresa Sullivan to resign. But Dragas firmly maintains that the board did the right thing.

The university was — and still is — in trouble, Dragas says, a stance she believes has been vindicated by a recent consultant’s report that paints the public university as elitist and in need of change. Sullivan’s ouster and reinstatement a year ago, though painful and embarrassing, pushed administrators to form long-term, strategic academic and financial plans, the outcome Dragas says she wanted all along.

“Clearly, I think change was needed,” Dragas said during her first lengthy interview since the events of last summer. “We could have been much more savvy, sophisticated, and open and communicative about it. But the good news is that the president and the board are all working together now in all of these areas to move the university forward.”

But forward to where? One year after the crisis, administrators and board members generally agree that U-Va. should be a world premier, trendsetting institution, but they sometimes differ on how best to achieve that goal. They will have to decide this summer as they complete a long-term strategic plan for the university.

U-Va. is at an inflection point, an outside consultant recently warned. Like many universities, it needs to fix its business model, invest in the undergraduate experience, hire a new generation of faculty, use technology in innovative ways, find more research funding and grow its endowment. Otherwise, the consultant cautioned, the school Thomas Jefferson founded risks falling behind its peers.


Helen Dragas, president and chief executive of the Dragas Cos., answers e-mails in her office on July 1, 2013. Dragas no longer heads the U-Va. board but she is still a member. (Norm Shafer/The Washington Post)

“There is a sense of urgency that we set our course,” Dragas said.

By many, Dragas is still seen as a stubborn and micromanaging leader who should have resigned after her failed attempt to topple Sullivan. She has been the recipient of nasty e-mails and online comments, criticizing everything from her business practices to her fashion choices.

At graduation in late May, a few students booed as Dragas took the stage. Meanwhile, Sullivan was showered with standing ovations, hearty cheers and glowing compliments. The speaker at an ROTC ceremony told graduates to emulate Sullivan’s “grace under pressure.”

To a smaller but much more influential cohort — one that includes many of Virginia’s power players — Dragas has proved herself to be someone willing to bravely take on the entrenched state university and stand firm in her beliefs.

Although Dragas’s tenure as rector of the U-Va. Board of Visitors ended June 30, she will remain on the board for three more years.

“In the really dark moments, I would just keep coming back to this thought that boards of governance should govern and that they should not relinquish an insistence on keeping public universities public,” Dragas said. “I just felt that it was a principle worth standing for.”

Soon after the board reinstated Sullivan on June 26, 2012, administrators at the university launched a strategic planning process — something that was at the heart of the crisis.

Sullivan has said board leaders originally told her not to compose a comprehensive strategic plan because faculty members were “fatigued and discouraged by the lack of follow-through” on earlier plans.

But e-mails released last summer show that Dragas still pushed Sullivan to think and plan strategically. As of November 2011, Sullivan’s top goal from the board was to provide “strategic leadership,” a task that included developing a “credible statement of strategic direction” by February 2012, according to someone who was on the board at the time.

That due date was delayed as Sullivan explored opportunities for U-Va. in Asia, studied the existing financial model, encouraged collaborations across campus, met with state lawmakers and major donors, and confronted the school’s sometimes unwelcoming culture.

Sullivan composed a 12-page “Strategic Academic Planning Perspective” and presented it to board leaders in early May. About a month later, she agreed to resign.

Board members have been largely silent on exactly why Sullivan was forced out — and what changed to make them feel confident about reinstating her. Former board member Randal J. Kirk said recently that he and others believed that Sullivan was the wrong pick from the start.

“Terry is not an innovator,” said another member of the board during the crisis, who was willing to speak candidly about confidential personnel matters only on the condition of anonymity. “She is not a creative leader, and that’s what we needed.“

Sullivan has repeatedly defended her leadership style, which some have described as being “incrementalist.” She has said the ouster was unexpected and unexplained.

“Sweeping action may be gratifying and may create the aura of strong leadership, but its unintended consequences may lead to costs that are too high to bear,” Sullivan told the board at the height of the crisis last summer.

Several current board members now commend Sullivan for spending much of the past year looking ahead and planning.

But some top administrators feel that they spent too much time calming worried faculty and staff members, preparing for board meetings and compiling documents that weren’t acted on quickly. They hope that will change in the coming year.

“I have been thinking about all of the positive things I could have achieved in the last year if I didn’t have to deal with ‘governance issues,’ ” said U-Va. Provost John Simon. “I wouldn’t call it a wasted year, but I don’t think that it was as productive as it could have been.”

It took six months for the board to support increasing faculty pay, a proposal that had wide support last summer. Administrators spent two months composing and vetting a four-year financial plan, just to see it bumped to a later meeting and then shelved. The board also stalled in giving Sullivan permission to set up a strategic investment fund using money saved across campus. (The fund was approved, but administrators must seek permission before tapping it.)

“In a public institution, there are decisions that need to be approved by a board,” Sullivan said in a phone interview. “I’m not the one to dictate that timetable to them.”

Sullivan and her staff are finalizing a long-term strategic plan. In an early preview presented to the board, Sullivan said U-Va. should focus on improving the undergraduate experience, recruiting a new generation of faculty, breeding a culture of leadership, pioneering new ways of teaching and developing a sustainable financial model.

It could prove especially difficult to reach consensus on a financial plan for the university. Sullivan has pushed for U-Va. to charge tuition rates similar to its competitors while continuing to discount the cost for low-income students. Dragas, meanwhile, has vehemently opposed any tuition increase.

Other board members have pushed for cost-cutting and asked U-Va. to identify what it will de-prioritize and, therefore, defund.

Guiding some of these decisions is a lengthy report from the Art & Science Group, a Baltimore-based higher-education consulting firm the university hired. The consultants praised U-Va. for providing “a superior, extraordinarily valued undergraduate experience” — and then detailed all of the ways the “public Ivy” has been relatively complacent and the ways it must improve.

Dragas points to this report as validation of her concerns last year. Meanwhile, Sullivan’s supporters say the report echoes the president’s 12-page strategic memo last spring.

The full report, obtained by The Washington Post through a public records request, includes comments criticizing U-Va. for appearing “elitist, preppy and homogenous,” a place that doesn’t seem welcoming to racial minorities. The school’s obsession with Jefferson gives the impression that the university is stuck in the past, the report says, and there’s an environment of uncertainty that could scare away top faculty.

Perhaps, the report implies, U-Va. doesn’t deserve its sterling reputation.

The report attributes to an industry “thought leader” this comment: “It’s interesting to look at, say, Maryland versus Virginia. Thirty years ago, Maryland was inferior. Not anymore. If you were having dinner at a country club, you’d be more pleased to say UVA than Maryland. But that’s historical, not current reality.”

Dragas takes her board position seriously.

She grew up in southeastern Virginia and attended U-Va. in the 1980s, earning bachelor’s degrees in foreign affairs and economics and an MBA. Her first job, as a teenager, was at her family’s real estate development company, interviewing customers about their purchases.

In 1996, Dragas took over and grew the business, which specializes in houses for middle-income families and condominium developments. She invests in simple luxuries and aims for high-quality construction at affordable prices.

Dragas has donated nearly a half-million dollars to U-Va. — about $350,000 in the past year alone while she was at the center of the turmoil — but she considers herself a voice for the state’s lower- and middle-income families. She tells of receiving phone calls from families of all sorts who are thankful she voted against this year’s tuition increase.

“There’s a lot of focus on what the people in the ‘university community’ think,” Dragas said in an e-mail. “Their views do count. But it’s also the entire ‘Commonwealth’s University.’

It belongs to the people in this state who pay faculty and staff salaries and whose taxes bought the bricks that built the school and created its priceless brand. Their voices deserve the same attention.”

During the May board meeting, the last with Dragas in charge, everyone gathered for dinner under the dome of the Rotunda, a Jefferson architectural masterpiece. Dragas raised her glass.

“We toast Thomas Jefferson,” Dragas said, “the scholar, scientist, gifted writer, president and rebel whose dream for public higher education was realized through this remarkable university.”

While Jefferson honored the past, she said, he “never shied away from breaking with tradition to adapt to a new world order” — or take an unpopular, controversial stance.

“Mr. Jefferson taught us to learn from the past, live for today and never lose sight of our dreams for the future,” Dragas said. “That’s worth at least a toast.”

Jenna Johnson writes about Maryland politics, including the General Assembly, the administration of Gov. Martin O'Malley and the 2014 election.
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