Finding Dave Smith on the board of an online university is like spotting an eagle in the sky or a walleye in the water—education companies are his natural habitat.
Ten years ago, while president of the testing business for Eden Prairie–based NCS (National Computer Systems), a technology provider for education systems, Smith joined the board of Capella Education Company, the Minneapolis-based parent of the online Capella University. At his urging, NCS had invested $5 million in Capella.
“I thought it was a business model that NCS may have a synergy with in the future, and thought we should learn as much as we could about the online educational industry,” Smith says.
In 2000, the U.K.–based education company Pearson PLC acquired NCS, rechristened it NCS Pearson, and moved it to Bloomington, with Smith named CEO. He’d helped grow NCS’s testing business from $60 million to $300 million. During his less-than-three-year tenure as CEO, the company grew more than 50 percent, from $800 million to $1.2 billion.
When he retired from NCS Pearson in 2003, Smith, now 63, accepted an invitation to stay on Capella’s board. No longer representing a corporate investor or potential business partner, he still felt that service to the company was important.
“I have this inherent idea that corporations are not institutional abstractions,” Smith says. “The people who invest and work in these businesses are the folks who live in our town; they’re our neighbors. So the prosperity of these corporations is essential to the well-being of our community.”
Capella founder and CEO Steve Shank says, “If I were to use one word” about Smith, “it would be ‘invaluable.’ The guy’s got a ton of insights. He’s a great sounding board and a great communication channel for where the board’s thinking is at. And I really respect his judgment. Every CEO needs that kind of support.”
Smith centers his board work around a two-word goal: Everybody wins. “There are a lot of hard decisions that corporations are faced with,” he says. “I think the right decision is one that causes all the stakeholders—the shareholders, employees, customers, and community—to be better off in the long run. That’s my touchstone. When I think about an issue in that way, the answer becomes clearer.”
He still sees himself more as an operations guy than a by-now-seasoned director: “What I have to contribute is, I’m a guy who’s been a business operating manager for 30-some years; I’ve skinned my knees and elbows many times. If I contribute anything, it’s trying to share some ideas and insights based on my operational experience.”
Shank begs to differ. “Dave’s tremendous value to our board is that he really understands higher education,” Shank says. “He understands our culture at Capella. He is very engaged in terms of staying on top of everything the company does.”
When Smith joined the board in 1998, Capella had fewer than 50 employees and 628 learners. Today, it has more than 1,100 employees and 23,400 learners around the globe.
“I’ve had the opportunity to watch this business grow from an idea to being the market leader as a dedicated online university,” Smith says. “The company has become a public company [Nasdaq: CPLA]. Its original investors . . . saw their dreams realized. So sitting at the table and watching all of this happen and thinking I’ve been able to contribute maybe just a little bit to that has been fun.”
Dave Smith is also a director for: Plato Learning, Inc.; Scientific Learning Corporation; InScape Publishing.