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Business School: 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.
2,232 words
23 February 2005
The Wall Street Journal
A1
English
(Copyright (c) 2005, Dow Jones & Company, Inc.)
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."
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.
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.
By Bernard Wysocki Jr.
2,232 words
23 February 2005
The Wall Street Journal
A1
English
(Copyright (c) 2005, Dow Jones & Company, Inc.)
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."
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.
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.