What Happens When Public Universities Like UVA Are Run by Robber Barons

The conventional wisdom debunked.
June 15 2012 7:30 PM

Strategic Mumblespeak

Er, UVA’s Teresa Sullivan was fired for what?

Teresa Sullivan.
Teresa Sullivan was ousted as president of the University of Virginia last weekend in a surprise to the school community

Lin Jones/University of Michigan.

In the 19th century, robber barons started their own private universities when they were not satisfied with those already available. But Leland Stanford never assumed his university should be run like his railroad empire. Andrew Carnegie did not design his institute in Pittsburgh to resemble his steel company. The University of Chicago, John D. Rockefeller’s dream come true, assumed neither his stern Baptist values nor his monopolistic strategies. That’s because for all their faults, Stanford, Carnegie, and Rockefeller knew what they didn’t know.

In the 21st century, robber barons try to usurp control of established public universities to impose their will via comical management jargon and massive application of ego and hubris. At least that’s what’s been happening at one of the oldest public universities in the United States—Thomas Jefferson’s dream come true, the University of Virginia.

On Thursday night, a hedge fund billionaire, self-styled intellectual, “radical moderate,” philanthropist, former Goldman Sachs partner, and general bon vivant named Peter Kiernan resigned abruptly from the foundation board of the Darden School of Business at the University of Virginia. He had embarrassed himself by writing an email claiming to have engineered the dismissal of the university president, Teresa Sullivan, ousted by a surprise vote a few days earlier.

The events at UVA raise important questions about the future of higher education, the soul of the academic project, and the way we fund important public services.

Kiernan, who earned his MBA at Darden and sent his children to the university, has been a longtime and generous supporter of both the business school and the College of Arts and Sciences, where I work as a professor. Earlier this year he published a book called—I am not making this up—Becoming China’s Bitch. It purports to guide America through its thorniest problems, from incarceration to education to foreign policy. The spectacle of a rich man telling us how to fix our country was irresistible to the New York Times, which ran a glowing profile of Kiernan and his book on Feb. 29.

At some point in recent American history, we started assuming that if people are rich enough, they must be experts in all things. That’s why we trust Mark Zuckerberg to save Newark schools and Bill Gates to rid the world of malaria. Expertise is so 20th century.

Kiernan played a strange and as-yet-unclear role in the ousting of Sullivan over last weekend. Here is the story of how it unfolded and how we came to know of Kiernan’s role in the matter.

Sunday morning my phones started ringing and my email box started swelling. The rector (what we in Virginia call the chairperson) of the University of Virginia Board of Visitors (what most states call a Board of Regents) had written an email to the entire university community announcing that Sullivan had resigned.

I can’t begin to describe the level of shock this generated among alumni, students, and faculty. Suffice it to say that everyone—every dean, every professor, every student, and every staff member at the university—was surprised. Even Sullivan did not have a clue that this was coming down until the Friday before the Sunday announcement. I can describe two things: the affection and respect that the university community had for president Sullivan in her two short years in office; and the bizarre turn of events that led to her forced resignation.

Sullivan is an esteemed sociologist who specialized in class dynamics and the role of debt in society. The author or co-author of six books, she spent most of her career rising through the ranks at the University of Texas, where she served as dean of the graduate school while I was working toward my Ph.D. in the late 1990s. She was known around Texas as a straightforward, competent, and gregarious leader. She carried that reputation from Texas to the University of Michigan, the premier public research university in the world, where she served as the chief academic officer, or provost, for four years.

When the University of Virginia sought a president to lift it from the ranks of an outstanding undergraduate school to a research powerhouse, while retaining its commitment to students and the enlightenment Jeffersonian traditions on which it was founded, the board selected Sullivan in 2010. She became the first woman to serve as president of UVA, a place she could not have attended as an undergraduate in the 1960s because it was all-male at the time.

The first year of Sullivan’s tenure involved hiring her own staff, provost, and administrative vice president. In her second year she had her team and set about reforming and streamlining the budget system, a process that promised to save money and clarify how money flows from one part of the university to another. This was her top priority. It was also the Board of Visitor’s top priority—at least at the time she was hired. Sullivan was rare among university presidents in that she managed to get every segment of the diverse community and varied stakeholders to buy in to her vision and plan. Everyone bought in, that is, except for a handful of very, very rich people, some of whom happen to be political appointees to the Board of Visitors.

We know from the email Kiernan inadvertently (stupid “reply all” button!) sent to a large group of Darden School supporters that he had plotted to convince many members of the board that Sullivan should go. The Sunday we all found out Sullivan had been forced out, Kiernan wrote in the email, “Several weeks ago I was contacted by two important Virginia alums about working with [Board rector] Helen Dragas on this project, particularly from the standpoint of the search process and the strategic dynamism effort.” Kiernan assured his readers that Sullivan was a very nice person whom he respected. And he reassured them that sharp, trustworthy people were handling the transition process: “And you should be comforted by the fact that both the Rector and Vice Rector, Helen Dragas and Mark Kington are Darden alums,” Kiernan wrote. “Trust me, Helen has things well in hand.”

In her initial letter to the university community and again in a statement later that Sunday, Dragas declined to offer any reason for dismissing Sullivan. One thing we have learned from watching universities in the past year is this: When a university president fails to report a pedophile football coach, it’s a good reason to fire him. But no one, including Dragas has ever even suggested that Sullivan had failed the university financially, ethically, or morally.

“The Board believes that in the rapidly changing and highly pressurized external environment in both health care and in academia, the University needs to remain at the forefront of change,” Dragas wrote in her initial email announcement. I have no idea what that means or why it pertains to Sullivan’s dismissal. I guess it means that stuff is changing. So the university must change. Firing a president is change.

On Monday Dragas, sensing that the university community might want some explanation for such a radical act, sent out a second message: “The Board believes this environment calls for a much faster pace of change in administrative structure, in governance, in financial resource development and in resource prioritization and allocation. We do not believe we can even maintain our current standard under a model of incremental, marginal change. The world is simply moving too fast.” 

OK, then. It’s all about pace. I suppose this means the board will appoint a new president every two years. Or maybe more frequently, because that’s the only way to keep up with the pace of change.

Earlier in the statement Dragas wrote that “the board feels strongly and overwhelmingly that we need bold and proactive leadership on tackling the difficult issues that we face.” So we can derive from Dragas’ statements that Sullivan was not bold enough, fast enough, or “proactive” enough to guide a bucolic 193-year-old institution founded by a stocking-wearing guy who studied Greek and Latin for fun.

We were all baffled. So Sullivan did nothing wrong? The board would not even hint at the reason she was fired. Conspiracy theories quickly circulated to fill the vacuum. And they got worse after Kiernan’s letter unleashed an unfounded fear that an MBA “cabal” was in cahoots with Goldman Sachs to loot the university.

In a live appearance at the Rotunda, the central icon of the university, Dragas did say, “We had a philosophical difference about the vision of the future of the university.” So what were those differences? She won’t say.

Fortunately, Kiernan’s email, leaked to newspapers on the following Tuesday, contained some clues. “The decision of the Board Of Visitors to move in another direction stems from their concern that the governance of the University was not sufficiently tuned to the dramatic changes we all face: funding, Internet, technology advances, the new economic model. These are matters for strategic dynamism rather than strategic planning.” Wait. What? “Strategic dynamism?” That struck many around the university as “strategic neologism.” Kiernan used the phrase two more times in his short email to supporters.

Laughter ensued. It’s the catch-phrase of the year at the University of Virginia.

I have spent the past five years immersed in corporate new-age management talk. For my recent book, The Googlization of Everything—and Why We Should Worry, I immersed myself in the rhetoric of Silicon Valley and the finance culture that supports it. I subjected myself to reading such buzzword-dependent publications as Fast Company. So I had heard about “strategic dynamism” before. I can’t say that I understand it fully. But if my university is going to be governed by a mysterious buzzphrase, I had better try.

Strategic dynamism, or, as it is more commonly called, “strategic dynamics,” seems to be a method of continually altering one's short-term targets and resource allocation depending on relative changes in environment, the costs of inputs, and the price you can charge for outputs. In management it means using dynamic graphs to track goals and outcomes over time, and having the ways and the will to shift resources to satisfy general goals via many consecutive short-term targets. Most management textbooks offer equations one may use to dynamically chart and execute strategy. And for all I know it makes a lot of sense.

Consider sailing, which one might do if one is a hedge fund billionaire from Connecticut. In sailing one sets a general course to a distant target but tacks and shifts depending on the particular environmental changes. I understand why “dynamic” is better than “static.” Who wants a static sailboat? But is a university, teeming with research, young people, ideas, arguments, poems, preachers, and way too much Adderall ever in danger of being static?

The inappropriateness of applying concepts designed for firms and sailboats to a massive and contemplative institution as a university should be clear to anyone who does not run a hedge fund or make too much money. To execute anything like strategic dynamism, one must be able to order people to do things, make quick decisions from the top down, and have a constant view of a wide array of variables. It helps if you understand what counts as an input and an output. Universities have multiple inputs and uncountable and unpredictable outputs. And that’s how we like them.

Still, this cultish diction seems to have swayed at least a few people on the Board of Visitors. It helped convinced them that Sullivan was either not strategic enough or dynamic enough or both. Almost a week after the event and in the face of harsh and universal condemnation, the board itself remains silent about its specific disagreements with Sullivan. The Kiernan letter is the only text that guides us.

We on the faculty, joined by thousands of students and alumni, have been asking the board for two simple things. Would it please tell us the specific issues on which it disagreed with Sullivan? And would it please tell us what sort of person it thinks should be president of the university … and for how long?

Both the Kiernan letter and Dragas’ shallow statements discuss the climate facing the university and all public universities in the United States. The problem is, everyone seems to discuss the fact that universities have too little money as if it actually were a matter of climate.

It’s not. It’s a matter of politics. States have been making policy decisions for 20 years, accelerating remarkably since the 2007 recession, to cut funding severely, shifting the costs to students and the federal government. Adjusted for inflation, state support for each full-time public-college student declined by 26.1 percent from 1990 to 2010. Meanwhile, faculty and staff salaries have been plummeting and security evaporating. This is especially true at the University of Virginia, where state support per student is far lower than at comparable state universities such as North Carolina.

So as tuition peaks and federal support dries up, the only stream still flowing is philanthropy. Our addiction to philanthropy carries great costs as well as benefits to public higher education in America. We are hooked on it because we have no choice. Either we beg people for favors or our research grinds to a halt and we charge students even more. I am complicit in this. I enthusiastically help raise money for the university. And my salary is subsidized by a generous endowment from board member Tim Robertson, son of the Rev. Pat Robertson.

The reason folks such as Dragas and Kiernan get to call the shots at major universities is that they write huge, tax-deductable checks to them. They buy influence and we subsidize their purchases. So too often an institution that is supposed to set its priorities based on the needs of a state or the needs of the planet instead alters its profile and curriculum to reflect the whims of the wealthy. Fortunately this does not happen often, and the vast majority of donors simply want to give back to the institutions that gave them so much. They ask nothing in return and admire the work we do. But it happens often enough to significantly undermine any sense of democratic accountability for public institutions.

The biggest challenge facing higher education is market-based myopia. Wealthy board members, echoing the politicians who appointed them (after massive campaign donations) too often believe that universities should be run like businesses, despite the poor record of most actual businesses in human history.

Universities do not have “business models.” They have complementary missions of teaching, research, and public service. Yet such leaders think of universities as a collection of market transactions, instead of a dynamic (I said it) tapestry of creativity, experimentation, rigorous thought, preservation, recreation, vision, critical debate, contemplative spaces, powerful information sources, invention, and immeasurable human capital.

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