Fast Company

The Storm After the Storm

Tulane University President Scott Cowen was at the tail end of a respected career when Katrina hit. The hurricane almost destroyed his institution--and gave him the chance to reinvent it.

It's a cloudy, foggy day in New Orleans, but at least it's not raining. That wouldn't bode so well for freshman move-in day at Tulane University. After all, the last time these students arrived, on August 27, 2005, they were here only a few hours before Scott Cowen, Tulane's president, told them to get the hell out of town. The rain that Hurricane Katrina brought--and the terrible wind, and the broken levees, and the chaos, and the devastation--not only shuttered Tulane for a semester but also spawned the largest diaspora from a natural disaster ever to befall an American city.

More than four months later, much of New Orleans remains in ruins. In the shattered neighborhoods of the Lower Ninth Ward and Lakeview, overturned cars are everywhere, doors ajar, upholstery spilling out; tree trunks seem to have taken root inside houses; piles of splintered wood, once brightly painted children's rooms or kitchens, now look as weather-beaten as if they came from a sunken ship. Hundreds of stinking refrigerators still line the curbs, bound with duct tape to keep the ooze in.

Then there's Tulane University, which, while it didn't face the total destruction other areas did, suffered plenty all the same. On this January day, the place looks just a little ragged, although crews of workers are out in force to trim tree branches and cut weeds. Yet compared with the days immediately after Katrina--when nearly two-thirds of the campus was flooded and a thicket of tree trunks littered every walkway, when an administration team was marooned hundreds of miles away with no way to reach students or employees--it's paradise. The mood is festive as upper-class volunteers help excited kids hoist bags into their dorms. A jubilant baby-blue-and-green banner says welcome home.

Proudly surveying the scene is Cowen, 59, who is spending the morning greeting students and, just as often, reassuring their parents that their kids were right to return. "Take care of my daughter," pleads one mom from Ohio. "You just go to Columbus," replies Cowen, a former defensive lineman with a broad smile and a body to match, putting a protective arm around her. "We'll take care of the rest."

Coming from Cowen, it's not an empty promise. Since the night of the hurricane--when he hunkered down on an air mattress in the weight room of the school's rec center and woke up to see water surging across the campus--he and an intrepid band of colleagues have worked tirelessly to get Tulane running again. On January 12, to the classic New Orleans sounds of Dr. Michael White's Liberty Brass Band, Cowen and his colleagues officially welcomed back the 84% of the Class of 2009 that made the return trip (92% of all undergrads came back).

"As I was going to say before Katrina interrupted me…, " begins Cowen, looking resplendent in his president's robes. "We are absolutely delighted that you are here with us finally… No major research university, or for that matter, any organization, has ever been confronted with the challenges we've faced. Yet we have recovered, we have survived, and we have charted a path to the future."

With equal parts grit, creativity, and optimism, Cowen has resuscitated Tulane--formerly the largest private employer in New Orleans and, since Katrina, the largest altogether--even as the rest of the city remains mired in the literal and figurative muck. But Cowen has also decided to do something more than merely rebuild his institution as it once was. Using the powers granted him as a result of the school's financial emergency, he has enacted a bold, controversial, and wrenching "renewal plan," with which he hopes to remake Tulane from a very competitive school into a truly elite one. "I wouldn't wish this on anybody," he says. "But out of every [disaster] comes an opportunity. We might as well take the opportunity to reinvent ourselves."

Academic leaders don't get that opportunity in normal times. The job of running a major university is one of the toughest management gigs on the planet. Given the endlessly warring constituencies of tenured faculty, students, alumni, athletes, community members, and administrators, it is a role that more often is about offending the fewest people than it is about radical change. So Cowen's decision to try to transform Tulane--a school with a relatively small $850 million endowment to begin with, $90 million to $125 million in projected 2006 losses, and property damage of $250 million--has some people scratching their heads. Yet it is also completely in sync with the no-holds-barred approach of Cowen, a doctor of business administration who ran Case Western Reserve University's Weatherhead School of Management for 14 years before coming to Tulane in July 1998. "He's a pretty bold guy who only takes yes for an answer," says Richard L. Osborne, a management professor at Weatherhead. "He does it with grace, but he's very persistent."

"As I was going to say before Katrina interrupted me…" More than four months after the hurricane devastated his university and his city, Tulane president Scott Cowen welcomed back the class of 2009--even as crews continued to work to fix the campus.

In 2004, for example, Cowen single-handedly took on the national established collegiate athletic interests, declaring the system by which schools got lucrative invitations to football bowl games unfair and even monopolistic. His efforts resulted in rule changes that angered a lot of people. "We always thought [that] would be my legacy," chuckles Cowen, "and I didn't want that."

Katrina granted that wish--violently. And while the immediate problem was the millions of gallons of water that flooded Tulane's uptown campus and fully inundated its downtown location, the school's woes went far beyond water damage. A university exists in large part because it is expected to exist in the future. It is a dynamic organization that requires a constant influx of new ideas--and a crew of rich alumni who want to attach their names and fortunes to an institution that will outlive them. In short, it assumes perpetuity. And suddenly, that assumption was no longer valid.

This became obvious to Cowen even before he escaped his drowning campus (an escape that required, in order, a commandeered boat, a hot-wired golf cart, a "borrowed" dump truck, and a helicopter donated by a rich alum). Once he set up shop in a Houston hotel along with his executive team and their families and pets, the scope of the task began to overwhelm him. Where do you begin when everything is gone? "I went to the first meeting," says Marjorie Cowen, Scott's wife, "and just walked out of there crying. I just thought, This is so huge."

Most crises that affect an organization affect only one part. A computer virus might cripple a company's intranet but not its phone lines. A train derailment might delay one component of a product, but there should be alternative sources. Katrina was an assault on all fronts at once. Tulane had no functioning IT infrastructure, no way to communicate with its 12,500 students and 6,000 employees, no news on federal funding, no way even to assess the damage. Some of the staff had no homes, clothes, or news of relatives. But Cowen and his team plunged in, fueled by little more than adrenaline. "Why wait for the government?" he says. "If we did, we'd be out of business." Yvette Jones, Tulane's chief operating officer, puts it even more succinctly. "You start at the corner and you just go," she says.

Cowen put in place a triage system centered on a daily 9 a.m. meeting. "Scott would say, 'We have 1 million things on our plate, but what are the top-five things that need to get done today?' " says Luann Dozier, VP for development, who lost her home. "You go and come back with the recommendations and move on. So you could see progress every day." The first order of business was to retrieve the school's IT files from the 14th floor of a downtown New Orleans building with massive flooding, no working elevators, and chaotic surroundings. A posse of Tulane employees, escorted in SUVs by police officers, spent hours lugging the disks down the darkened stairways. They needed the records to find students as well as to figure out how to pay staffers and faculty, many of whom had been displaced and presumably needed the money right away. "If we didn't make payroll, everyone would have thought we were gone," says Cowen.

Yet some 15% of the employees were not on direct deposit, and there was still no central Web site for students seeking information about whether and when the school would reopen. Cowen reached out to alumnus David Filo, cofounder of Yahoo, for help. Filo donated some manpower and Web-hosting resources, and soon a makeshift Web site came to life, along with a relentlessly cheery blog from Cowen. Privately, however, he had doubts. Why would freshmen, about to be dispersed to hundreds of different colleges, feel loyalty to a school they'd attended for just a few hours? Who would want to come back to a campus with absent professors, few services, limited pizza joints, and, possibly, no Mardi Gras? To make it easier to come back (actually, harder to leave), national university organizations asked other schools to accept students affected by Katrina, but only for one semester. The school also took out a $150 million loan to hire a disaster-relief firm to fix the damaged campus.

With off-campus housing in drastically short supply, Tulane leased a cruise ship to use as a dormitory.

After about three weeks of 24-7 crisis management, Tulane-in-Texas shifted from the ICU to the recovery room. And as soon as it became clear that Tulane actually had a future, Cowen began to think more strategically about what kind of a future it should be. Fund-raising began in earnest, with the goal of raising $25 million for rebuilding by June 30 (the number stood at $31.5 million in mid-February). To meet the housing shortage, Cowen leased an Israeli-based cruise ship to use as a dorm. Says senior Danielle Scher, whose family lost everything: "I'm just happy to have a roof over my head." Realizing that professors wouldn't come back if they didn't have schools for their own kids, Cowen budgeted $1.5 million to charter a local school for the kids of the faculties of Tulane as well as those of other struggling universities.

On November 1, Cowen moved back into his Tara-esque home on Tulane's campus, ready to tackle some tough choices. In early November, for starters, Tulane laid off 243 full-time staffers. But to survive the next few years, even more severe cuts would still have to come--including tenured faculty, the ultimate sacred cow. Virtually every area was affected, even seemingly integral groups like the fund-raising department, which was halved. While still in Houston, Cowen had gathered together a brain trust of his board, a group of outside advisers such as William Brody, president of Johns Hopkins University, and consultants from PricewaterhouseCoopers to come up with a plan that included both tactical financial measures and a broader vision for what Tulane would become in the future.

The dozens of meetings--which went on throughout October and into November--were long and painful, but seven years of experience and a lot of the analysis Cowen had already done in prior years led the group to some obvious cost savings. It quickly became clear that the medical school, which had moved to Baylor University for the year, was in the most trouble, primarily because of the lack of patients. The group ended its emphasis on clinical work and reduced the school's faculty and staff by a full 30%. "That was really difficult," says Dr. Paul Whelton, SVP for health sciences and dean of the medical school, "to tell people who had been loyal to this university for 20 years that unfortunately you are not critical to the mission."

The next steps were equally painful and more controversial still. In a strategy more common to a failing public company, the group scrutinized departments and programs that even before Katrina weren't "tubs on their own bottoms," or financially self-sufficient. The group also benchmarked Ivy League schools such as Princeton and Dartmouth. The hammer fell on December 8, when Cowen announced the school's Renewal Plan. Tulane would more narrowly focus on the undergraduate experience, which he believed to be the school's main strength. That meant entry into many doctoral programs, including those in many sciences as well as law, economics, and social work, would immediately be suspended. "We had made this decision [to emphasize undergrads] when Scott first came in 1998," says Catherine Pierson, chair of Tulane's board of administrators. "But these were the areas where we didn't have the resources to take them to a new level."

Borrowing a page from Jack Welch, Cowen announced that Tulane would now marshal its efforts in "areas where it has attained, or has the potential to achieve, world-class excellence… and suspend admission to those programs that do not meet these criteria." Resources would go, for example, to chemical and biomechanical engineering--but the remaining four engineering majors would be eliminated. Eight of 16 sports were cut altogether. And Newcomb College, the women's college for Tulane students, will be merged with Tulane to create a single undergraduate school--one whose naming rights could be a major funding opportunity. While the move will save money, Cowen says the primary goal is to create a common experience for every incoming Tulanian.

Cowen, who also chairs the mayor's Bring New Orleans Back education committee, declared that Tulane would focus intensely on the social problems that Katrina exposed so dramatically, spearheaded by its new Partnership for the Transformation of Urban Communities and a volunteer-service requirement for every entering student. "This is a chance to participate in the largest recovery project in the history of the United States," Cowen told the freshmen.

But while Cowen is certainly sensitive to the city's social needs, he's equally savvy about how to get funds to his school, and it's clear that projects focused on fixing New Orleans's woes are most likely to bring in the big dollars. At a time when there is so little trust in local, state, or government leaders, he hopes that people who want to help will turn to the school. "There are people who see us as the leadership in this city," says Jones. "They feel we have the integrity."

Given the scope of the crisis, Cowen's plan met with little initial resistance. It didn't hurt that he required Tulane's board to approve or reject the plan as a whole; it passed unanimously. But now, perhaps because Tulane is perceived to be on the mend, the critical rumblings are getting louder. In January, the American Association of University Professors wrote Cowen asking for a full accounting of exactly how he eliminated 166 full-time faculty positions (including 61 with tenure)--believed to be the largest number of mass terminations ever at an American university. Groups have sprung up to fight the changes with petitions and protests. And chalked in front of the engineering building was a lament: "We survived Katrina, but not the administration."

Some have questioned Cowen's approach and methodology, suggesting that there should have been more consultation with students and faculty. "Like any good leader, he made bold and decisive actions," says Lee Hoffman, a 1991 Tulane graduate, "but we don't have a battle-tested decision here. What we have is a decision that was prearrived at and then justified."

Cowen denies having any sort of master plan to alter the course of the university, but he was prepared to move aggressively in part because he had launched a financial analysis of every Tulane department in 2001, giving him data to rely upon once the hurricane hit. While no one would ever wish the horror of a Katrina on anyone, it gave Cowen the clout to move faster than any university administrator in memory. Other university presidents respect that decisiveness. "The first thing that popped into my mind was the quote from Plunkett, the Tammany Hall guy," says Madeleine Wing Adler, president of West Chester University of Pennsylvania. " 'I seen my opportunities and I took 'em.' "

Cowen says he's committed to seeing his plan through, and that he'll stick with Tulane at least until 2008, despite a growing chorus who want him to run for mayor of New Orleans. Sure, he's survived Katrina, but he has a long way to go in his quest to remake Tulane, and plenty of potential roadblocks, such as the community's struggles and, of course, the terrifying possibility that it could all happen again. "I say, 'Thank God that I was here at this moment,' " he says. "Not because I'm glad, but because if I could make a small difference, it will have been worth it."


Jennifer Reingold (jreingold@fastcompany.com) is a Fast Company senior writer.

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