Can Eric Kaler Retool the Engine?

Can Eric Kaler Retool the Engine?

The new U of M president faces a punishing budget, a legacy of top-down management, intense demands to grow research, and a sports and marketing machine on a Big 10 scale he’s never seen before. What makes him the right catalyst to take the university out of rough idle?

You know, there were some of us who developed a profile of university presidents and the skill sets that brought success to their schools, and candidly, Eric is very close to that profile,” says Jim Campbell, University of Minnesota alumnus, former chairman and CEO of Wells Fargo Bank Minnesota, and recent interim dean of the U’s Carlson School of Management.

“Interestingly, some of the best happen to be scientists,” Campbell adds, a reference to Kaler’s PhD in chemical engineering, earned at the University of Minnesota 29 years ago. “It may have something to do with being more analytical and recognizing the importance of separating fact from fiction.”

Campbell and others close to the selection process for a new university president last year looked to examples like Mary Sue Coleman, president of the University of Michigan since 2002 and a biochemist who serves on the National Advisory Council on Innovation and Entrepreneurship for the U.S. Department of Commerce. As an indication of how high the bar might be for Kaler as a Big 10 president, Coleman has not only polished the school’s reputation as one of the top five research universities in the country, but also launched what became the largest-ever capital campaign for a U.S. public university; it eventually raised $3.2 billion for the school.

“Look,” Campbell says of Kaler, “he’s never been a CEO of anything this big before. It’s up to him to do it, but the raw materials are there.”

The University of Minnesota, with its $3.7 billion annual budget, 67,000 students, 4,000-plus faculty members, and 15,000 other employees, is certainly big as measured by numbers alone. But the challenges of Kaler’s job outscale the mere size of the place. Like publicly supported education everywhere, the University of Minnesota is in rapid transition, and not only because of sharp cutbacks in state aid. The forward rush of technology is creating both new competition and opportunities that must be managed if the school is to remain the “engine” that Kaler describes as driving Minnesota’s business and cultural stature.

In the early months of his term, both critics and passionate advocates of the U will test Kaler and the direction he intends to take. Perhaps first among equals in the ranks of advocates is Arne Carlson, Minnesota’s refreshingly opinionated former governor and the only one whose official portrait features him wearing a U of M maroon and gold cardigan. In universities as in governments and corporations, sprawling hierarchies can stymie change. Leaders come and go, Carlson says, but “the people in the bureaucracy beneath them linger on.”

“CEOs and presidents have a very short lifespan,” he warns. “What I’m telling [Kaler] is that you have six months in which to make your mark as a bold leader, or you’ll label yourself as just a continuation of the past. You have to design what you want that place to look like. You have to get out in front of it.”  

With the Business Community, “Enhanced Collaboration”

Kaler, 54 and a native of Vermont, taught for seven years at the University of Washington, 18 at the University of Delaware, and most recently was provost for four years at the 24,000-student Stony Brook campus of the State University of New York. But he is already a polished enough public figure not to prematurely tip his hand. He promises that his inauguration address on September 22 will “get more specific about the direction we’re going to go. Until then, it’s too early to advertise a lot of what I’m planning.”

In conversation, however, he quickly emphasizes the need for an “enhanced collaboration” with Minnesota’s business community. And in a July 31 e-mail to all university faculty and staff, he doesn’t sugarcoat with any fiction the uncomfortable facts about the U’s reputation as he has experienced them so far.

The university is seen as a contributor to the state’s vitality and has grassroots support, Kaler writes. But “too many people perceive us as aloof and arrogant, slow and unresponsive. I’ve heard from people both within and outside of the university that we need to have more of a sense of urgency and efficiency in what we do.”

That squares with what many in the state’s business community have been saying about the university’s technology transfer operation for years. Kaler has more than that in mind, though, when he writes that he’d like to “see us pick up the pace.”

“Clearly, we are operating in a period of enormous budget constraints,” he says. The university has to be more efficient, but it can’t cut its way to excellence. Instead, “you have to be more entrepreneurial and strategic about how you’re going to grow revenues. Eighteen percent of our budget comes from the state, which means 82 percent doesn’t. We need to grow that 82 percent.”
In that pursuit, Kaler says he needs to convince business leaders that he is open to all kinds of cooperative ideas, including greater cross-pollination in the areas of teaching, research, philanthropy, and lobbying—but always with the university as an equal partner, not “some kind of charity.” The U is an asset-rich environment capable of providing a significant return on investment. It will engage “from a position of strength.”

“Understand this,” he says, “we are not going to be in the business of slapping corporate logos on every school at the university. We intend to be broadly engaged with the community at large, which includes the business community. But we will not have corporate partners in curriculum decisions. That just won’t happen.”

The Minnesota Business Partnership, a business advocacy group made up of more than 100 chief executives of Minnesota’s largest companies, has invited Kaler to be a member, and he is already installed there. (His predecessor, Bob Bruininks, also was a member.)

Steve Goldstein, a media entrepreneur and venture capitalist who’s now president and CEO of the University of Minnesota Foundation, says of Kaler, “I like his energy. He’s incredibly bright and focused. It’s very exciting.”

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The foundation’s 30-some-member board of trustees, made up mostly of heavy hitters in business, has a mandate, Goldstein says, “to leverage the resources of the community, which obviously includes the business community,” on the university’s behalf. To build those relationships, the university might need to provide companies with better access to talented students/future employees, he says, as well as work companies for more scholarship aid, internships, adjunct faculty, contracts for sponsored research, and philanthropy.

Those kinds of contributions from business are all vital in Goldstein’s estimation. But he suggests that the business community’s most valuable assistance to Kaler might be in exerting its influence on the legislature to rethink state aid. Frankly, Goldstein says, after mentioning the 88,000 private gifts made to the university in 2010, “it is nearly impossible to raise enough in private resources to mitigate the drama of dwindling state assistance.”

“More Entrepreneurial” Deans

Dean Steven Crouch at the U’s College of Science and Engineering already has a full-time staffer working corporate relations. Crouch rattles off the names of virtually every major science-based corporation in the Twin Cities as already being in his college’s “collaborative” fold. He credits his business partners for invaluable assistance in getting state bonding approval for a new $51.3 million physics and nanotechnology building. When completed in 2014, it will have one of the finest, state-of-the-art “clean rooms” for so-called soft-biology research. Crouch says the building is an asset with tremendous potential for spurring additional university-business collaboration.

“Being a scientist, Eric has an intrinsic understanding of the potential of that facility,” Crouch says, adding that the effect of 3M deploying its considerable lobbying muscle on the legislature was not lost on Kaler. Kaler says he intends to “empower” the university’s two dozen deans and chancellors to be “more entrepreneurial” on behalf of their schools. Deans “will see a larger role [in this regard] than before,” he says. If true, it will be a fascinating process to watch.

“It’s been way too top down,” Carlson says of previous administrations at the university. “Basically, it’s been ‘I bark and you follow.’ They’ve never really let the cows roam outside the pasture. The deans I’ve talk to are pissed off. They say, ‘No one listens to us.’” Carlson adds that “after the deans bring Kaler their needs lists and what ideas they’ve got, they should be told they are the ones who are charged with selling it to the public.”

“I can speak to that complaint about being ignored from firsthand experience as an interim dean for a year and a half,” Campbell laughs. “Oftentimes, college presidents talk more than they listen. My admonition to him was to be different. And he said to me that it’s his experience that there are always nuggets of truth in the complaints people have, if you listen.
“I had the opportunity to have a private lunch with him and we talked a lot about the need to treat the deans like CEOs of their schools. So that’s encouraging,” Campbell adds.

At a time when scarcity of resources could be divisive, the university might do well to have someone with Kaler’s people skills. Former colleague W. Brent Lindquist, a deputy provost and professor of applied mathematics at Stony Brook, says Kaler earned a reputation there for “playing well together” with the school’s president as they struggled with a series of punishing budget cuts—8 percent one year, 6 percent another. Yet Kaler also managed to maintain faculty support by zealously protecting what Lindquist calls “the academic core,” not only in the sciences, but in the humanities.

“Where in my experience, some presidents rely a bit too much on philosophy and politics, Eric seeks out hard data,” Lindquist says. “Maybe it’s the chemical engineer in him. But he takes a very reasoned approach to problem solving. At the same time, he fits none of the clichés about scientists . . . . The point is, he’s not one of these guys who can only function in his lab with his tubes and computers. He interacted very well with faculty here.

“Even people who, in the end, he had to disappoint with his decisions didn’t go away as mortal enemies,” Lindquist concludes. “He is very informal and tempered. I can honestly tell you I never saw him trip over an important problem.”

“It’s a great misconception out there in the community that the board only considered one person” for the president’s post, says Linda Cohen, referring to the University of Minnesota Board of Regents, which she chairs. Instead, Kaler was among four candidates invited by the regents to meet with them for interviews that would be a matter of public record. Three chose not to go public with their candidacy by accepting the invitation; Kaler was willing to take the risk, Cohen says.

“To me, that was a huge plus, that he was willing to come, as a candidate with other candidates,” she says. Having a scientist to lead the university “seemed very timely” in the current environment, and it was clear that Kaler also values the humanities. But what struck her particularly was that “Eric Kaler often talked about his life-changing experience when he got his PhD at the University of Minnesota. So he came across as wanting to be president of the University of Minnesota, not wanting to be president of a university because maybe it was time in his career.”

“What We’re About”

“It’s no great secret what the regents saw in him,” says University of Minnesota Provost Tom Sullivan, who’s known Kaler as a fellow provost. “He’s quick, he’s bright, he’s well organized, and he’s very focused. I’m not surprised to hear that he wants to develop a long-range strategic financial plan as a first step. He knows that with an entity the size of the university, you have to go well beyond biennium bonding.

“But whatever more he does with business partnerships,” Sullivan adds, “it’s important for the public to recognize what we already have here: $823 million in external research grants. That means we are already in the top 10 of public and private research universities.”

The ability to attract funds will no doubt be a talking point, particularly with the business community. But Kaler has enlisted veteran PR man Scott Meyer, a founder of locally based Mona Meyer McGrath and later CEO of Shandwick International, to work out of the president’s office on a broader approach to “engagement” with the U’s stakeholders. The move to more entrepreneurial deans seems destined to be a key.

“Eric has very strong feelings about that,” Meyer says, describing Kaler’s belief that there’s a catalytic effect possible—in the business community, in the student population—from having more leadership exercised by deans. “How exactly [Kaler] is going to do this, I don’t think even he knows yet,” Meyer says. “But he is taking a very businesslike approach to finding out who has what ideas.”

Of ideas there is no shortage. There are plenty of opinions circulating about the direction Kaler should take and what his priorities should be. While he doesn’t intend to make his agenda public before September 22, the outlines of one begin to emerge in his reactions to various possibilities.

He dismisses shallow talk of the university saving any significant money by moving more of its curriculum on line, à la for-profit schools. Online teaching has all sorts of potential, but “there are no real savings there,” Kaler says. He is tantalized by the initiatives of schools like New York University that are meeting demand abroad for American-style higher education—free flowing, humanistic, and authority challenging. It is a “market” with intriguing potential, Kaler believes, and perhaps one that has
synergistic potential with local multinational corporations already operating overseas.

Carlson suggests that an administrative housecleaning should be on the agenda. “A place like the university has just an enormous number of constituencies,” Carlson says. “But that is not a reason not to demand better performance from some of these people.” He’d like to see one position added: a CFO, “someone charged with thinking strategically and answering the question, ‘Do I have a solid management team?’”

Kaler’s response to that: “I think we have a lot of people at this university who are thinking strategically. I’m not certain that’s an immediate need.” He resists the oft-heard complaint about “administrative bloat” at the U. Both Kaler and Sullivan are quick to point out the sheer size of the school and the revenue that it pulls in from grants—that $823 million that Sullivan mentioned—and say they need the staff to secure it all.

“Administrative bloat is something you hear about at a lot of universities,” Kaler says. “I’ve tasked human resources here to examine it. But in my experience, it is often more urban myth than reality.”

“One of my goals, if we’re talking priorities,” he says, “is to move the university into the conversation of the top research universities in the United States.” Pulling in grants is one thing, but in terms of reputation for research achievements, the top five schools are generally considered to be the University of Michigan, the University of California’s Berkeley and Los Angeles campuses, and the universities of Virginia and North Carolina, according to Kaler.

“We are in the group just below that. Our programs are in many ways as good as the programs at those universities, but our reputation is not as good,” he says. “So we have to get the word out and tell people why as a student you want to come here, why as a faculty member you want to work here, and why as a nonprofit or for-profit you want to partner with us.”
There is a detectable uptick in Kaler’s animation when he shifts from topics of agenda setting, budgets, and marketing to the true purpose of a university.

The great challenge in unreasonable times, he says, is successfully linking intellectual endeavour with improvement in the surrounding community’s quality of life. Intellectual development—with all its long-term, expensive, not-easily-quantifiable benefits—is that thrumming engine he talks about.

Academic careers, Kaler once said in a television interview when he was at Stony Brook, have a way of beginning in front of students and then evolving out and into more satisfying or more lucrative research, with student interaction as collateral damage.

“It is extremely important for academic leaders to remind universities, and to remind themselves, that [intellectual development] is why we are here. We’re a nonprofit. We’re not here to make money. We’re here to improve the lives of students. We’re here to create new knowledge and we’re here to serve the people of Minnesota. That’s what we’re about.” 

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