The former president of Mount St. Mary’s University said at an advisory board meeting that, in effect, liberal arts didn’t sell. The term just didn’t poll well with students, he said. The discipline needed a new name or a different approach to attract more students.
To some, it was a moment that encapsulated Simon Newman’s divisive tenure at the country’s second-oldest Catholic university: The private-equity chief executive and entrepreneur, an outsider, was bringing in business and marketing ideas and suggesting a new approach to an age-old enterprise. Some were open to the idea of rebranding liberal arts, but others were horrified.
“Would ‘homework’ poll well?” one colleague recalled asking, exasperated.
Newman resigned last week after igniting a national controversy about academic freedom. His brief time at the small school in Emmitsburg, Md., included various cultural and philosophical tensions, but his undoing was rooted, at least in part, in the tough language, abrupt firings and impatience of the corporate world he had just left.
The turmoil was an extreme example of what can happen when a corporate leader is put in charge of a traditional liberal arts school. As it did at Mount St. Mary’s, it can set up a formidable culture clash between those who believe that struggling private schools and cash-strapped public schools need a financial mind at their helm instead of an academic one and those who believe that a business vision could undermine a school’s fundamental mission.
Several higher -education experts said they expect to see more college and university boards turning to business executives to lead their colleges, largely for a simple reason: money. Financial pressures are mounting at public universities dependent on dwindling state funds as well as at private schools with small endowments.
And with business leaders increasingly dominating school boards, some say it’s easy to see why they would look to their own world to shore up finances, energize strategy and encourage efficiency in the face of sluggish enrollment that is reducing revenue.
“The underlying finances of the institution and the disruptive economy — that’s what’s bringing so many of these people to the fore,” said David Warren, president of the National Association of Independent Colleges and Universities. “Corporate leaders are much more prepared for disruption. Maybe that’s what’s necessary financially, but you can only make those financial changes if you engage the community, listen carefully, lay out the data, involve them in the decision-making.”
Michael Victor, a lawyer and former chief executive of a company that manufactured telecommunications products, recently was tapped to lead Mercyhurst University in Pennsylvania.
He said business principles led him to make changes such as increasing the number of courses that professors teach each semester as well as ensuring that continuing-education classes are available in the evenings and on weekends, when demand was highest.
But he didn’t jump straight from business to academia. He taught a college class, joined a faculty and served on a board of trustees until, as dean of a business school, he was chosen to lead Lake Erie College in Ohio.
He remembers how odd some concepts fundamental to academics seemed to him at first. The pace of change seemed slow. Colleges are mission-driven instead of profit-driven, he said, and are far more democratic and transparent than businesses.
“If you took a CEO and talked about shared governance, he would think you have two heads,” Victor said. “I think you will see more and more people with business backgrounds running liberal arts institutions across the United States. But I would caution: Unless they have experience as a trustee or a teacher, a visiting professor, they will struggle, and you will run into issues.”
The most recent data from the American Council on Education found that 20 percent of college presidents in 2012 previously worked in other industries, including business, compared with 13 percent six years earlier. The percentage at small liberal arts schools is closer to 14 percent, although there has been a noticeable increase over the years, said Richard Ekman, president of the Council of Independent Colleges.
“There are many situations where a nontraditional president is exactly what a college needs,” he said. “The trick is to help those presidents get acculturated fast so they don’t make a disastrous mistake.”
The shift in leadership has accelerated as schools like Mount St. Mary’s struggle to survive in a changing — and challenging — higher-education landscape.
College enrollment has trailed off since the recession, with 40 percent of universities estimating lower total enrollment last fall compared with the previous five years, according to Moody’s Investor Services. With the population of high school graduates slowing, schools that rely on the traditional batch of 18-year-olds to fill seats are especially feeling the pinch.
To attract students, nearly half of the nation’s private universities offer deep tuition discounts. But the practice has particularly hurt small schools that are heavily reliant on net tuition revenue — the money earned from students after schools provide financial aid.
Many small schools are learning to be more conservative with their budgets, cutting courses or consolidating departments, said Edith Behr, Moody’s higher education analyst. Others are trying to create new programs, expand into online education or do other things to increase revenue.
Mount St. Mary’s had experienced years of annual deficits and had tens of millions of dollars in debt, according to Moody’s. But during Newman’s tenure, Moody’s revised the school’s credit rating from “negative” to “stable” because it began hitting enrollment targets and improving operations. Analysts cited the debt and the school’s rural location as continuing concerns.
Some on the faculty welcomed Newman’s ideas, such as adding courses in high demand from employers in fields including cybersecurity. Others were distressed by some decisions, such as a sudden influx of consultants Newman hired, an abrupt cut to retiree benefits and a series of employee terminations conducted in a way that — although perhaps not surprising in the business world — seemed out of place in a collegial, Catholic nonprofit institution.
Then the student newspaper reported, and The Washington Post confirmed, that Newman made comments that would later rile the university community. He told a professor concerned that the president was trying to push out struggling freshmen that the professor was thinking of the students as cuddly bunnies. Instead, Newman said, “you just have to drown the bunnies . . . put a Glock to their heads.”
Newman said earlier this year that the school has a moral obligation to ensure that students who were likely to drop out could leave early and have their tuition refunded. No students left as a result of his plan. But for many faculty and alumni, it seemed unnecessarily brutal to single out and cull freshmen in the first weeks of college life — a move that felt completely at odds with their mission of challenging and supporting them.
When Newman fired two professors — one with tenure, the other the adviser to the student newspaper — the university denied it was retribution. But scholars across the country responded with outrage: More than 8,000 signed an online petition demanding their reinstatement and defending academic freedom.
The professors were reinstated, but the faculty voted 87 to 3 to ask Newman to resign. Two weeks later, he did, with the board chairman praising his work and saying that some of the changes he implemented would continue.
Newman and the board president did not respond to messages seeking comment for this article.
“Do boards consider people from the business world? Yes, they do. Do they like it? Yes, they do,” said Ray Cotton, a lawyer who has worked with presidents and trustees for decades. “Boards are looking for people from academia who are and will be respected by the faculty but also know how to run what they call the business side of the university — so they know how to deal with budgets, financing, management issues. They’re not looking for someone to come in from the outside, because they’ve seen some other failures besides the one we’ve seen in Maryland.”
The Council of Independent Colleges is hosting a workshop in July to teach new college presidents and vice presidents how to navigate the culture of school. The organization recruited half a dozen people, most of whom did not follow the traditional academic route to leadership, to help.
“We felt there were very specific issues where too many talented people who didn’t know anything about private higher education were just putting their feet in their mouth in the early months,” said Ekman, of CIC.
The job of looking for university leaders has increasingly been handed over to corporate search firms used to people with business backgrounds, whom they believe can best keep a college’s finances in order, said Benjamin Ginsberg, a political science professor at Johns Hopkins University.
“Most scientists at a research university, they’re accustomed to multimillion-dollar budgets they have to handle for their research. Most college presidents who have been academics were deans first and had to learn how to balance the books for their college,” said Ginsberg, author of “The Fall of the Faculty.” “So this idea of the starry-eyed academic who can’t make the books balance is ridiculous.”
Muhlenberg College, in Pennsylvania, chose a president with a successful 30-year career in business when it hired John I. Williams Jr. to start last summer. Williams argued that his volunteer work was just as important: He has served for decades on the board of Amherst College. So he understood some of the defining features of higher education, such as academic freedom and shared governance.
“I understand this is not a business,” Williams said. “But at the same time, it is. It’s a business that has a well-over-$125 million operating budget every year . . . a lot of aspects that are businesslike. When it comes to curricular matters, student affairs, it’s really an enterprise in culture and understanding how those various constituencies, particularly the faculty and the students, think as people. That’s not a dimension of college that one treats in a dispassionate, businesslike manner.”
At Mount St. Mary’s, the acting president the board named has experience in finance, human resources and marketing for Sprint.
But Karl Einolf, who did not respond to a request for comment, also has a doctorate from Lehigh University, received teaching awards during his years as a faculty member at Mount St. Mary’s and most recently has been dean of the school’s Richard J.Bolte Sr. School of Business.
A spokesman for the university said it plans to continue investing in technology; strengthening and lessening the number of requirements of the core curriculum; helping form career networks; and adding more majors, such as cybersecurity, forensic accounting, entrepreneurship and data science.
“There may have been a time when all we wanted was a deep thinker, sort of an avuncular figure or a scholar to be in the president’s office,” said Susan Whealler Johnston, executive vice president at the Association of Governing Boards of Universities and Colleges. “But today . . . people need a key fundraiser, a politician, an intellectual leader for the institution and somebody who understands the culture of the place.”