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There's something wrong with the American university system. If you enter crisis in American higher education into Google's search engine, you'll get millions of results. They'll tell you about the cost of higher education, which is rapidly becoming too expensive even for the middle class. Or about how universities aren't turning out enough professionals in science, mathematics, and technology. Or that state funding is drying up.

Ultimately, the business community has a profound interest in how colleges are managed and led, because corporations depend on a steady supply of well-educated employees. And interestingly, business itself has been offered as a model for the solution -- a college should be run like a business, goes the theory, not the outdated guild system that it is. But to many, the very thought is distasteful. Suggesting that a college can be managed like a fast-food franchise or a shoe store is antithetical to the noble pursuits of teaching and learning.

But, says Constantine Papadakis, Ph.D., president of Drexel University in Philadelphia, that's the only way to run a college. The only Greek-born president of an American university and a registered civil engineer, Papadakis had served 10 years in the upper reaches of industry before decamping for academia, first to head the engineering department at Colorado State University in 1984; in 1986, he became dean of the College of Engineering at the University of Cincinnati. Eventually, he concluded that he would have vastly more leverage as a college president.

Drexel wasn't in great shape when it hired Papadakis in 1995, and it still has room for improvement. But since Papadakis' arrival, full-time undergraduate enrollment has more than doubled, freshman applications have increased fivefold, endowments sixfold, research funding sevenfold, and Drexel has an annual budget of nearly $600 million. That, to Papadakis, means Drexel is a business.

What's more, the university treats its students like customers. "Drexel is partnering with 麻豆传媒AV to study the engagement level of students and employees, to help create a student-centric, performance-driven, and trust-based university," says Robert Lockwood, a partner at 麻豆传媒AV. To that end, Drexel has implemented 麻豆传媒AV's HumanSigma management approach to determine how much performance variation exists between seemingly similar workgroups throughout the university. Drexel aims to manage that variation effectively in an effort to raise overall employee performance while greatly enhancing the student experience. "This will improve student retention and employee productivity," Lockwood says. "President Papadakis is unquestionably looking at students as customers and truly cares about the quality of their experience at Drexel."

In fact, Papadakis says that he uses the same approach as a college president that he did as the chief engineer at Bechtel. But he doesn't dismiss the idea that there's a crisis in higher education. In this interview, President Papadakis explains why he's worried that most of the people in the university system aren't trained for their jobs. He discusses why he has no patience with people who decry profiteering in the nonprofit world of education. And he describes how he made the transition from business into academia -- and why academia should transition into business. Papadakis' successes and insights offer lessons to fellow university presidents as well as to leaders of any organization.

GMJ: Why did you leave industry for higher education?

Dr. Papadakis: The idea that a manager in industry could really make a major impact in academia came to me suddenly during a weekend back in 1984 while a group of friends were debating this issue. Traditionally, deans, provosts, and presidents in universities are grown from the ranks of faculty, and they don't have much experience managing human resources or budgets. Many of them don't even know how to read a financial statement. So when you start thinking about the impact that somebody with training in all those areas could have running a major corporation -- and most universities are major corporations; Drexel University is a one-billion-dollar business -- the impact can be tremendous. So that's what led me to start thinking that maybe a switch in my career path would be a very successful endeavor, and indeed that's how it happened.

GMJ: Do you see Drexel as a business or as a university?

Papadakis: A business, absolutely. We are in the business of education, and our product is the delivery of quality education. We have customers. I'm telling you, it's a business, period.

GMJ: How can a college be a business when it doesn't have a profit motive?

Papadakis: Oh, but it does.

GMJ: But most universities are nonprofits. How can there be a profit motive?

Papadakis: If there's no profit motive, then you are doomed. Our objective here is to have customers who are satisfied and who get value for the money they pay -- and also make a profit for Drexel, as much as possible. Then we invest our profit back into the business to make it better and to get more satisfied customers and to give them more value for their money. If you don't have that, then the whole system falls apart.

That's why every operation at Drexel is a cost center. For example, our dormitories are cost centers; they have to make a profit. Our cafeteria is a cost center; it has to make a profit. And all that money basically comes back and is reinvested in the institution to make it better and to provide better service to the customers.

GMJ: So if the business is education, and the students are customers, what happens to your customer when he gets a "D"?

Papadakis: We have been debating this for some time here, and the best description that I can give you is what my own students published in Drexel's student newspaper, The Triangle. They said that they are customers when they deal with the university administration, and they are students when they are in the classroom. They may not be happy when they get the "D" in the classroom, but then they're students. However, in their dealings with the administration, they are customers, and we cannot give them the runaround. We cannot be inefficient. We cannot have them wait. We cannot make mistakes. And we have to pamper them because they are customers. We don't want them to waste any time dealing with the administration. We want them to spend all their time studying and preparing themselves to be good students.

GMJ: How do you evaluate your product?

Papadakis: We have several methods that we use in addition to the grades that professors give to the students. We track hiring of our graduates -- how many, for example, get a job immediately upon graduation. Then five years down the road, we do a survey and ask them what has been their experience and where they stand in their careers. So we have data that we use, especially in colleges like engineering and business, which is very important for their national rankings.

GMJ: You have 18,500 students, each with narrowly focused goals. How can you engage such a disparate group?

Papadakis: We have an outreach to the students. For example, every year, I will give my e-mail address to all the students and ask them to communicate directly with me. When I decided to do this eight years ago, my assistant nearly fainted. And to make it worse, I offer a prize of $1,000 each for the best suggestions of the year from undergraduate and graduate students. They have to be made through e-mail -- they cannot be personal -- but if they are good suggestions and have the potential to be implemented, I'll pay $1,000.

GMJ: What are the suggestions like?

Papadakis: One was how to handle e-mail for the alumni after the students graduate; another one was about the library being wireless. Those are suggestions that come from customers who actually know more about the institution than the people who work here, because the customer experiences the service. I read every e-mail that comes from the students, and then I route it to the vice presidents and make certain that it gets a response. We can say no, we don't agree, this cannot be done, or we can say yeah, this is a great thing, we'll do it. The response of the students to this kind of outreach has been terrific.

GMJ: How do you find time to do anything but read e-mails?

Papadakis: The funny thing about this is that in our experience, if you hide, if your number is unlisted, if you don't give your e-mail address, people will find you, and they will bombard you. When you give it to them and you say, "Here it is -- I'm available," they don't use it that much. When they know that you are available and they can get to you whenever they want, that removes the anxiety they experience when they cannot reach out and communicate.

GMJ: You mentioned that people in industry can bring crucial skills to a university. Do you think there's a dearth of trained managers in academia?

Papadakis: There's no place where an individual faculty member who aspires to be president or dean can go and learn. This is surprising and actually depressing when you think about it, but there is no organization; there is no institution where they can go and learn how to manage, learn the ropes. A lot of what has to be done in managing a university is common-sense stuff, but you need to know how to deal with it.

For example, when I came to Drexel, I thought that enrollment should be like airline reservations. In other words, you have so many seats in the classroom, like you have so many seats in a plane, and you want to sell them to the best customers at the highest price to maximize attendance, quality, and revenues. So we implemented a program here at Drexel where we identify every applicant on the basis of their academic quality and their ability to afford our tuition -- this year we expect 18,000 applicants, although we accept only 2,500 freshmen a year. Now, a university can accept the students who have a lot of money and who are academically unqualified, and you will basically ruin the reputation of the school, but you will be rich for a while. Or you can accept all the exceptional students who are incredible but have no money to pay. You will acquire a great reputation for the university, but you will go broke.

So how can you be in the middle? How can you get some of the best students to enroll and get the highest yield financially in the bottom line? That's what airlines do. That's how they discount their tickets. That's why you don't know what the guy next to you has paid for the same seat on the same flight. Well, that's how we operate the Drexel system. We get the best students, and we also get the best yield financially from the class. The way we did it is by learning from one of United Airlines' top managers who was running their reservation programs.

GMJ: Leaders of any organization, not just academia, have to deal with some very strong egos. How do you recommend dealing with competing egos?

Papadakis: First of all, we respect individuals who have value and perhaps egos that go along with the value. They give value to the organization. What we try to do is encourage them to be team players. For example, I have a club that I have formed called the Ten to the Sixth Club. You know that ten to the power of six is one million, right? This is the faculty who bring in more than $1 million in research, contracts, and grants a year. Now, this club has 58 members. I invite them to my house for dinner, and we give them a pin that says "Ten to the Sixth." We recognize and promote them as examples of successful faculty for others to emulate. We give them awards.

We encourage ego. There's nothing wrong with it. We strive to create an environment where people want to excel and want to be recognized. And a university is not different from industry, because in industry you have huge egos at the top of the pyramid, and there's nothing wrong with that as long as the egos don't negatively affect getting the job done.

I hired a producer from Hollywood as dean of our College of Media Arts & Design. He had nothing to do with academia, okay? When I was interviewing him, I asked how he would handle faculty. And he said, "Oh, no problem. During my producer experience, I dealt with a lot of prima donnas." So I said, "That's good." Then I asked, "How would you operate with limited budgets?" He said, "Oh, no problem. Most of my productions were done on shoestring budgets." So I hired the guy, and he was extremely successful.

GMJ: Do you need different talents as a college administrator than as a manager in business?

Papadakis: There are common traits in both. But there are also major differences between the two situations. The consequences of mistakes, market changes, and changes in customer preference play out over different timelines.

Think about this for a minute: If a company -- a consulting firm, for example, or a manufacturing company -- has a backlog of six months of work, they would be the most delighted group of people. We have a backlog of four years. That's a great thing about our business.

So with that in the back of our minds, what we need to do in academia is to manage two separate environments. One is the academic environment, where the professor is teaching in the classroom a group of students. This interaction has to be the best experience that the students have. As for the students, we have to look at outcomes, such as: How much did the students learn? And, do they enjoy the learning process? There are criteria that can be used to assess the value added that's delivered to the customer.

The other environment we must manage is the administrative environment -- the paperwork, the bureaucracy, the red tape -- to minimize hassles for the customer. So we need managers who are well-versed in working with people, who know human resources and who also know systems. We need individuals who are innovative and who work hard, people who don't let go -- they see something through, and they work at it in a way that provides leadership for others to follow. So the traits of managers in academia and managers in industry are the same. If we have that business-like mindset, then we can create the best possible environment for our students to learn and our employees to work.