How Dr. Papadakis Runs a University Like a Company
MrPepper11
How Dr. Papadakis Runs a University Like a Company
Drexel Tries Online Classes And Fancy Marketing; Still Not in the Top
Tier
Cretan Knife to Slash Costs
By BERNARD WYSOCKI JR.
Staff Reporter of THE WALL STREET JOURNAL
PHILADELPHIA -- At a Drexel University campus forum last May,
professors complained about funding cuts at the library. Rather than
apologize for the belt-tightening, President Constantine Papadakis told
them he'd prefer to have an all-digital library with no books at all.
Some faculty members and students were horrified. An architecture
professor said printed books were essential to his field. Another
professor compared the Drexel library to that of a community college.
"It boggles the mind that someone like a university president could
envision a library without books," wrote the student newspaper, the
Triangle, in an editorial.
In an interview, Dr. Papadakis says he was exaggerating to make a
point: Spending too heavily on books, periodicals and the buildings
that house them is a waste in the digital era. The spat was nothing new
for the 59-year-old Greek immigrant, who revels in making comments
designed to shock the status quo as he introduces hard-nosed business
practices to one of America's centers of learning.
Many universities are grappling with how business-minded they should
be. Harvard University's president, Lawrence H. Summers, has clashed
with faculty members over his hierarchical management style. The
university is also debating whether its money managers should be
rewarded with Wall Street-style bonuses. At Columbia University, an
aggressive push to collect royalties on university-owned patents has
led to legal fights with licensees.
But few university presidents have a hard-core business style quite
like Dr. Papadakis's. He has deployed sophisticated marketing tactics,
tried to improve productivity by digitizing coursework and has beefed
up the 114-year-old institution by taking over a troubled medical
school. He has quintupled the university's endowment to $470 million,
doubled undergraduate enrollment to 9,800 and recorded an $83 million
surplus in 2004 on revenue of more than $500 million.
At the same time, Drexel scores well below the top tier of U.S.
universities on a range of academic and standard-of-life measures. Dr.
Papadakis's critics say the university's financial focus conflicts with
other values that might improve its standing.
For instance, Dr. Papadakis is averse to raising the annual budget for
Drexel's library, which is equivalent to $500 per student. Some rivals
spend double that amount. "I'm not going to do something stupid" just
to gain prestige, he says. While Drexel is keen to attract top
students, there's a periodic tug-of-war within the Drexel inner sanctum
over how much financial aid and scholarship money to offer.
"It's the most market-driven institution I've ever worked with," says
George Dehne, president of George Dehne & Associates Inc., a consulting
firm that specializes in academia. Mr. Dehne describes Dr. Papadakis as
"a piece of work" and says, "I don't know what other institution could
handle him."
Courting 'Customers'
Dr. Papadakis is part showman -- a promotional CD-ROM is tucked inside
a pocket on his business card -- and part numbers jockey. The former
Bechtel Corp. executive exhorts his marketing staff to find more paying
"customers," better known as students. He keeps a knife from Crete on
display in his office and jokes that he uses it to slash budgets.
Unlike some university presidents, Dr. Papadakis doesn't teach and
doesn't have tenure. His salary of $805,000 makes him one of America's
highest paid university presidents, according to the Chronicle of
Higher Education, which ranks him No. 6. He lives like a corporate
leader, too, in a 10,000-square-foot Georgian mansion that was donated
to the university. Drexel's first couple entertained a total of 1,500
people there last year, says Dr. Papadakis, who says he uses the
property to help raise money. His high-profile salesmanship has lured
big gifts, including $10 million from Drexel alumnus and tobacco
magnate Bennett LeBow.
"I'm worth my money," Dr. Papadakis says.
The son of a doctor, Dr. Papadakis went to engineering college in
Greece, followed by graduate studies in engineering at the University
of Cincinnati and the University of Michigan, where he earned a
doctorate. He spent a dozen years at Bechtel, the giant construction
company, rising to become chief engineer. He re-entered academia and
later became dean of engineering at Cincinnati. There, Dr. Papadakis
recalls docking a professor's pay as punishment for giving all "A"
grades in a thermodynamics course.
Dr. Papadakis arrived at Drexel in 1995 with a straightforward
challenge: survival. The university was in a downward spiral.
Enrollment was falling. Drexel's concrete urban campus was in disrepair
-- for example, an 11-story dormitory had been boarded up for about a
decade -- and the university was running low on money.
Dr. Papadakis, who is known as "Taki," recalls showing up for his first
day of work on a Friday in August. No one was there. Drexel employees
didn't work Fridays during the summer. He told his staff they could
start working five days a week or take a 20% pay cut. When a group of
professors asked to be part of his strategic planning effort, Dr.
Papadakis recalls telling them: "Fine. Give up your tenure. If we fail,
we fail together." He didn't hear from the group again.
"Make no mistake," he told the assembled throng of students, faculty
and visiting dignitaries during in his inaugural address in May 1996.
"Higher education is a business."
The president says his focus on making money is born from a desire to
keep down tuition costs and improve Drexel's quality of life, rather
than from a "lust for profit." He resisted efforts by some board
members to raise cash by selling off Drexel's valuable collection of
art and antiques, including a famous 18th-century clock. Instead, the
art and the clock became part of Drexel's marketing effort. They're
housed in an ornate "picture gallery" on campus that's used by
admissions officers to woo prospective parents and students.
As Drexel's finances stabilized in the late 1990s, Dr. Papadakis
orchestrated the academic equivalent of a corporate merger. He vastly
increased the university's size by agreeing to take over management of
a big medical school, MCP Hahnemann University, which was losing
millions of dollars as part of Allegheny Health, Education and Research
Foundation, a bankrupt health-care group. In 2002, Drexel took outright
control, renaming it the Drexel University College of Medicine.
Beyond the extra tuition income, Dr. Papadakis saw a chance to win
federal science grants and revenue from conducting clinical trials for
drug companies. In taking over the medical school, he also got a
nursing school where enrollment has been booming. The medical school
last year had a surplus of about $2.6 million, says Drexel.
Even Dr. Papadakis's most ardent critics acknowledge the improvement in
the university's financial performance. They argue that its academic
quality has been compromised by big classes, cramped teaching spaces
and overstretched faculty.
"Papadakis wants to cram as many bodies into the university as he can,
as long as the suckers are willing to pay," says Robert Zaller, a
Drexel history professor and a vocal critic of the regime.
The Princeton Review's guide to colleges ranks Drexel third worst of
357 universities for "long lines and red tape," based on surveys of
Drexel students. Drexel also scores poorly in the Review for its
unsightly campus and unhappy students.
The university says it has several new buildings planned or under
construction. It also says it has made progress in streamlining
bureaucratic machinery such as course registration and financial aid.
For all the financial success, Dr. Papadakis and his lieutenants harbor
an ambition to vault Drexel into the top tier of American universities,
as ranked by the magazine U.S. News and World Report. Drexel has been
rising in recent years but hasn't cracked the top 100. In the 2005
survey, Drexel ranked No. 106.
One key reason is the school's low retention rate. Only 57% of freshmen
stick it out until graduation. Drexel offers a five-year program for
undergraduates that alternates study with work outside the university.
Student leaders believe that contributes to the dropout rate. Some
schools ranked just ahead of Drexel boast graduation rates of 70% or
higher.
Pitch for Aid
One typical solution is to increase the amount of scholarship and
financial aid. At 8 a.m. a few weeks ago, Joan McDonald, vice president
for enrollment management, came to Dr. Papadakis's conference room to
make a pitch for setting aside more financial aid. She proposed raising
the total to $68.7 million, up from $60 million, or about 27% of total
tuition revenue. The new figure would bring her closer to the 30% rate
offered by some competing schools.
Dr. Papadakis told her he was alarmed by the potential loss of revenue.
"You have to, Taki," Ms. McDonald said, noting Drexel's desire to raise
its graduation rate.
"The retention rate is fine," Dr. Papadakis said.
"That's the first time I've heard that," she shot back.
"Well, maybe $63 million. You have some leeway. But not $68.7 million,"
Dr. Papadakis responded.
Another reason Drexel hasn't cracked the top 100: Only 75% of its
faculty members are full time. That's far below the rivals Drexel has
in its sights, such as Pittsburgh's Carnegie Mellon University. Ranked
No. 22 among U.S. universities in the U.S. News survey, Carnegie Mellon
has a 93% full-time faculty.
For Dr. Papadakis, the full-timer issue poses a dilemma, since one of
his bedrock ideas is to encourage the use of Internet-based courses
that can be taught by inexpensive part-time or non-tenure-track
teachers. As he envisions it, experienced Drexel professors will create
digital courses containing computerized coursework accessible via the
Internet. They'll be offered on campus but can also be used to teach
"distance learning" students who don't take part in face-to-face
instruction in Philadelphia. For the most part, these courses can be
taught by junior or part-time faculty.
"Technicians can teach them" at lower cost, says Dr. Papadakis, quickly
adding that he is exaggerating when he uses the word "technicians."
The interim provost, Ali Houshmand, acknowledges that as Drexel pushes
toward its goal of putting 10% of its courses online, dangers arise,
from quality control to the way the university deploys the scarce
resource of faculty time. Some tenure-track professors, who are eager
to be published, dislike e-learning courses because they are labor
intensive. Distance learning, they say, can end up being one-on-one
tutorials with students scattered around the country. Dr. Papadakis
says that is probably true.
The debate has reached a flashpoint over a for-profit subsidiary,
e-Learning Inc., created by Drexel with $4 million from the
university's general operating funds. In 2002, it began marketing
"distance learning" degree programs to off-campus Drexel students. The
subsidiary shares about 50% of the revenue with Drexel deans and
faculty members who create and control course content.
Today, the fast-growing program has 1,800 students in business,
education, engineering, nursing and other programs. It brings in about
$14 million in revenue and is generating annual profit of about $2
million.
But e-Learning's success is creating turf battles. On a recent
afternoon, Dr. Papadakis found himself arbitrating a squabble over
whether e-Learning could charge the university for helping Drexel's
faculty create digital courses.
Some faculty members worry that students admitted to the "distance
learning" programs aren't the intellectual equal of their on-campus
counterparts. About 95% of e-Learning applicants are accepted compared
with about 70% for on-campus applicants. Arthur Zamkoff, president and
CEO of e-Learning, says admission requirements are identical for both.
He says the discrepancy exists because e-Learning staffers weed out
weak candidates through an e-mail correspondence even before they
complete an application.
Dr. Papadakis prizes the university's scientists for their ability to
attract federal grants, but he's sometimes cautious about approving
funds to beef up Drexel's physical infrastructure. The tension was
clear during a recent meeting with the medical school's top management,
held on the 19th floor of the aging Hahnemann tower in central
Philadelphia.
"We running out of research space," said Bill Stephenson, vice provost
for research. Dr. Stephenson noted that Drexel scientists attract $300
in research funds per square foot, versus a national average of $250.
He proposed putting up a one-story building to house 10 labs and 10
offices, costing between $6 million and $8 million, perhaps financed
with a 30-year bond offering. It would be a stop-gap measure until a
new research facility, still in the planning stage, opens in about five
years.
Dr. Papadakis cut him off. "How long until I get my money back?" he
asked. Thirty years is unacceptable, but "six years is okay," he said.
He instructed Dr. Stephenson to work with Drexel's chief financial
officer to come up with a better financing scheme. They developed a
plan that passed muster and the interim building is scheduled for
completion this November.
John Gilmer
"MrPepper11" <MrPep...@go.com> wrote in message
news:1109170477....@g14g2000cwa.googlegroups.com...
> February 23, 2005
> How Dr. Papadakis Runs a University Like a Company
Interesting story.
Dr. P. sounds like the like of guy who can push/pull a third rate
"university" into the 21st Century.
The library budget is an interesting item (and it was close to the top of
the story.)
$500 per student seems LOW but I suppose it all comes down to how and how
often the typical student actually uses the library.
The reality is that most undergrads don't do much in the way of academic
research that requires a good library. Seems to be that it's reasonable
for a university library to have some "hard" copies of rare items and use
the digital approach for stuff that is being ground out for "publish or
perish" reasons.
The "traditional" publication of academic papers did, of course, impose a
SMALL amount of discipline: it cost just as much per page for useless/silly
stuff as important stuff.
If academic journals want to have large press runs they should make their
stuff more interesting reading and reserve the details for electronic
distribution.