How Rowan University Uses Hot Sauce to Lower Student Costs

Podcast

How Rowan University Uses Hot Sauce to Lower Student Costs

Episode 85. January 4, 2022.

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Rowan University has emerged as one of the fastest-growing research universities in the country with two medical schools and nearly double the total enrollment they had in 2012 when Dr. Ali Houshmand became its president. Dr. Houshmand talks with EAB’s Hersh Steinberg about the power of partnering with businesses and other institutions in ways that keep them invested in the success of your school.

The two also discuss Rowan University's support of 3+1 programs and how the launch of their own hot sauce enterprise offers hands-on business experience and helps reduce college costs for Rowan students.

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We have a $1.7 trillion student debt in this country, somewhere between 35 to 50 million Americans who went to school sometime or another and never finished. And those are our failures. Those are higher education failures, whether you like it or not. - Dr. Ali Houshmand

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Transcript

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0:00:11.9 Speaker 1: Hello, and welcome to Office Hours with EAB. On today's episode, we are joined by a Rowan University president, Dr. Ali Houshmand. Dr. Houshmand's path to higher end leadership was atypical. He is one of 10 children born to a poor family in Iran. Education was his ticket out. In a wide-ranging interview, he discusses milestones from his journey and shares what he's learned about ways to reduce college costs without compromising your institution's financial sustainability. He also talks about the value of partnerships, and he shares an inspiring story about how he turned his love of growing super-hot peppers and making hot sauce for family and friends into a successful, privately-funded, student-run hot sauce enterprise at Rowan, with all proceeds going to support student scholarships. Give him a listen and enjoy.

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0:01:15.1 Hersh Steinberg: Hello, and welcome to Office Hours with EAB. Thanks so much for joining us today. My name is Hersh Steinberg, and I serve as managing principal with EAB. It's good to be with you today. I'll share one of the perks of my job, is that I get to interact and learn from so many university leaders from all across the country, and with that in mind, I'm quite excited by our guest today. We're joined by an individual whose journey to higher education leadership is different than most. The growth and transformation of the institution he has led since 2012 has been nothing short of remarkable. With me today is Rowan University president, Dr. Ali Houshmand. Dr. Houshmand, welcome to the podcast.

0:01:50.9 Ali Houshmand: Thank you, Hersh. Delighted to be with you.

0:01:53.8 HS: Good to have you. Dr. Houshmand, would you mind sharing a little bit of background on yourself, your journey from your childhood in Iran to your education, your early career, how you first came to Rowan? That'd be a good place to start.

0:02:08.7 AH: Sure. I was born in Tehran, Iran, in 1954. My family were very modest, to put it very generously, and struggled through life. But once I finished my high school, I left Iran in 1975, and I went to England. And over there I went through working my way through bachelor's and master's in mathematics that I finished in 1983. I then moved to University of Michigan to continue a PhD in mathematics, but later on, for whatever reason, I switched to... Decided to go to industrial engineering or operational research engineering, which is really a branch of applied mathematics. And I got a master's and a PhD in industrial and operations engineering from Michigan in 1989.

0:03:02.7 AH: I worked for United Airlines the first year of my career as a research analyst, doing scheduling and forecasting for all the flights that they had. Then I joined the University of Cincinnati in 1990 as an assistant professor and moved to associate professor. And then, in about the year... Yeah, it was actually the year 2000 when I moved to Drexel as associate provost for academic affairs, and then moved to different positions. And in the year 2006 I moved from Drexel to Rowan University as provost, and I was provost since 2011. And then in 2011, I kind of became interim president, and year 2012 I became president, and I've been president since. So, this is a very short and quick kind of story of what I've gone through.

0:03:54.0 HS: I gotta ask for our listeners at home, how does hot sauce fit into the story? And can you elaborate because I have tried it and it's darn good.

0:04:04.2 AH: [chuckle] That's really a hobby. I love... There are two things that I do to kind of keep myself sane, one is gardening, any sign of gardening, anything about growth, and then there is running, running, I used to run on all marathons and everything. I don't do the marathons these days but I do a lot of gardening. When I started gardening, I grew a lot of pepper, and from the excess pepper that I had, I decided to experiment because another thing that I like to do is cooking. So I cooked some hot sauce and I started giving them to friends, and friends liked them, and they kept encouraging me to do more, and I did it until somebody from our staff asked if I was willing to make a batch to be auctioned, which I did and it was auctioned, and it was very popular, and then they wanted more and more and more, and the next thing you know, two years later, we were doing industrial production.

0:04:49.1 AH: We had the FDA approve recipe for three sets of hot sauce, the lowest being Ali's Nasty, because that's the name that my staff gave to the sauce when I gave it to them for free. And then I went a notch higher in the heat, called it Nastylicious, and then yet another notch higher to the hottest peppers in the world, and I called that Nastyvicious, because it hurts you first and then it cures you after that. So, that's the story of hot sauce, it's fascinating. I have raised about $3 million that is endowed money, and we have sold quite a bit, well over $100,000 or so. And it's fun and students benefit from it, and every penny of the proceed goes all of it for scholarship...

0:05:32.4 HS: Which I love.

0:05:33.1 AH: For students. Which is need-based scholarship. So, this is fun and the students run this thing. And what is amazing about it is actually within the university I have created a small factory that basically I showcase to the kids to understand how you start your own small business from A to Z. The whole supply chain is IT, and I explain it to them because I hired them in the fall, we worked together, so I kind of... While we do all the growing and picking and cooking and everything, I also explain this kind of thing with them, and it's really fascinating to them, too, so there's educational components to it.

0:06:06.6 HS: It's so great, and I know I didn't prepare you for this question, but I've had the hot sauce, it is... It can be nasty and vicious. It is darn good though and I love the story. Let's talk more about where you're at today, so under your leadership, Rowan's grown. A modest, well-regarded state school, around 11,000 students, to one of the fastest growing research universities in the country, two medical schools, you nearly doubled the total enrollment you had when you arrived. I am a New Jersey native, I have watched over the years, and have been really impressed. Ali, what are the accomplishments you're most proud of in terms of the transformation at Rowan, and what kinds of challenges keep you up at night here in 2021?

0:06:51.4 AH: They are two very tough questions. The first one is, the accomplishment, I think the greatest accomplishment that I really feel very proud of is this, and you may not believe it, but it's really what I believe is the key. I managed by working with the faculty and trying to understand both sides of the higher education within administration and faculty and the staff, that there should be a degree of compromise while you stick to your set up principles. And I think as a result of that, that I've created what I call a harmonious campus. And this harmonious campus has enabled me to do anything that we wanted to do and be successful, because I have moved the institution from me to us, and that has simply enlarged the tent and brought whole host of people with creativity and ideas, and care for the institution, to be participant and to provide insight and to provide their expertise, their creativity.

0:07:51.5 AH: And I think that's really the key, and I found that the more you let go and the more you bring others to participate in the decision-making, the better it becomes, and I've really seen that in practice, so that's... People might say, "Yes, two medical schools. Yes, we are now... We went from Master's classified to an R2 in a space of six years, five years," yes, these are great accomplishments, and I'm very, very proud, but none of them would have been possible without having that harmonious campus, and that's really what... Now, the threat, the challenges, the things that keeps me up, well, there are a number of them. Obviously, the cost of education for people, I think it is really, really frightening for the United States, if we create a situation where we will have a haves and have not population. It will become so difficult for the masses to have access to the affordable and re-useful and relevant education.

0:08:50.9 AH: Because in doing so, then you create a kind of what I will call a third world mentality of a country, where you have a small group of really haves, and a large number of people who have not. We have a 1.7 trillion-dollar student debt in this country, somewhere between 35 to 50 million Americans who went to school sometimes and another that never finished, and those are our failures. Those are high education failure, whether you like it or not, and I think we need to... That's something that really keeps me awake, how do I find ways to reduce the cost of education? That's number one. Number two, mental health. It really is absolutely, it's a very, very serious issue and extremely important for all of us. I'm sure my fellow presidents will appreciate and understand that this is something that we can never ever say it's enough done, because it is, every single individual is unique and different, and you cannot possibly come up with a cookie-cutter approach to this issue.

0:09:48.2 AH: And when you do not have a cookie-cutter approach to it, then you have to have an approach that treats every individual based on their uniqueness, and that means it could require you to invest heavily. But to me, in a country where we value life, no matter how much we spend, we should do so and even more to make sure that everybody is safe, because this is a very, very serious issue right now. The other challenge, the third one, the big one, is also, as a result of massive infusion of technology in everything that we do, how does higher education, and specifically, how do the professors are gonna move away from sage on the stage into guide on the side. That to me is a very, very tough transformation, especially the state institutions and institutions that are more traditional and unionized, because unless and until we do that, my worry is that we will become relevant, and we will be taken over by all these certification granting entities, large and small.

0:10:47.9 HS: You hit on some provocative topics, and they're the right ones. I just will reflect the notion of a harmonious campus, it sounds like you don't have to play the last instrument, but you're trying to conduct a harmonious symphony across your leadership and you're gonna play beautiful music, and that has led to the evolution of Rowan, which is excellent. But you hit on a couple of challenges, the very real challenges, cost of college. I think we should talk more about this mental health piece as well. You and I have spoken about EAB's work in this space, the moon shot for equity, it's helping two and four-year institutions within the same area or region build those stronger articulation agreements, transfer pathways, trying to improve graduation rates among the historically underserved student segments.

0:11:37.2 AH: Sure.

0:11:37.6 HS: You've done a lot here, could you talk about the work you and the team at Rowan are doing along similar lines, and in particular, it might be valuable for you to share more about your role, the three-plus one programs, your efforts here, maybe explain to our listeners what we're talking about, and Rowan's impact, because it is an impressive one on that cost of college piece.

0:12:00.9 AH: So let me start by saying the following, no matter how prestigious we are as institutions, and I really believe that higher education, there are institutions that have different levels of kind of prestige, so to speak, however you want to define that. I think it's possible in this day and age to have the cake and eat it too, in that you can be prestigious while you can at the same time be highly accessible, that's possible. In fact, that's what we are trying to do. Oh, no, they're contradictory, right? But I'm saying that it can actually happen. Now, imagine the following, imagine the statement that one day I made to seven county college presidents in our surrounding neighborhood. I said, "How do you like it if I have 1,800... 18,000 applicants who applied to Rowan University," I don't remember exact number at that time, of students who... Or applicants who applied to Rowan undergraduate, "How do you like it if we tell every single one of them, yes?"

0:13:12.5 AH: And they said, "How so?" So look, as far as I'm concerned, I want to be a better rank institution, much more prestigious institution, I want to hire very fine faculty members, I want to build very great infrastructure, and there is nothing wrong with that, that's really what the amazing thing about what our education is, you want to advance knowledge and that means having better faculty, better resources in order to be able to do that. So we can do all of those things. While at the same time, I could bring a lot of kids through a system, a county college system, through a transfer system, that their SAT or their high school GPA or anything else in no way, shape or form will impact your ranking. The only thing that impacts the ranking is if you are a first-time full-time freshman. So instead of me, let's say, going and bringing 5000 freshmen every year, how about if I bring 2000 freshmen, spend all of my scholarship on every one of them and bring the most high quality freshmen in here and then create a whole massive farm system with this county college and bring the rest of them, majority of them from the county colleges.

0:14:21.8 AH: In doing so, the generation of the revenue is gonna take place, I will have my revenues, I will do my public service as a state institution, I will never say no to anybody, I will basically put the burden on the students to prove themselves whether they're good enough to get a Rowan degree or not. I will never lower my standard, I will just ask them the challenge. And more importantly, the more I present these kids, because there is a direct correlation, and that has been proven between income and achievement in terms of thinking about kids who want to get to high school. If you look at the SAT and correlate it with the income, you will find that the income and SAT are correlated, right? Therefore, the low-income people, chances are they have got, they've got a harder time to get to the very, very prestigious schools, financially as well as possibly score-wise, right?

0:15:15.3 AH: Now, if that is the case, that means that I cannot through this system actually make it far less expensive for those kids. So the less qualified, the less financially capable kids who probably don't have the 1350 SAT to get to Rowan Engineering can go through the county college route, spend the county college route for the two or three years, and I will explain 3+1 to you, and then after that, finish the last year or two, and get a Rowan degree. And if it's gonna be engineering, so be it, but go to the county college, take Calculus I, II, III and IV, take Physics I and II, Chemistry I and II, add all of them and achieve 3.5 GPA or higher, and then we will welcome you to our mechanical engineering. So the burden is on you, but I would make it easier for you. So now what is the 3+1? The 3+1 is that, this is a very, very important observation that I have, respectfully, that I would like to share with whoever listens to this podcast.

0:16:18.7 AH: There are, I believe, over 1100 or so county colleges in this country. And all of them play a very, very important role. In fact, it plays a significantly bigger role in the past than they do today in terms of preparing the workforce of the future. However, these days for all sorts of reason, pandemic and not being able to offer a baccalaureate degree, these county colleges are facing massive drop in enrollment. Across the board, I hear anything around 15% to 20%. And these are... The infrastructures are fascinating, they have got professors, they have got classrooms, they have got labs, they have got infrastructure that are paid by taxpayers, and we cannot afford to let them die away. And the fact of the matter is associate degree, for all intents and purposes in today's high tech economy is not enough, so we are in a quandary.

0:17:14.4 AH: You're not allowed to offer Bachelor's degree and associate degree is not enough. Do we want to let them die away? It's a shame. So what I decided to do, I said, for a specific degrees that are workforce related, think about Mechanical Engineering Technology, think about, I would say another one, construction management. It counted degrees that are prepare people as the  technologies as areas in which county colleges were originally built for and you... We as a university, then come and partner with them, and we create those degrees, four-year degrees, remember, those are the degrees that are non-duplicative in our universities. I know what they like of them, we do not have, except one or two that are highly popular and are highly in demand and all the institutions can offer them. And so for those degrees that are workforce related, that we do not have the copies of them in our campus, what we do as a four-year institution, we use our faculty, we go and create that curriculum in collaboration with them.

0:18:26.0 AH: They create the first two years, we create the next two years, then our faculty comes and he says, "Here is the third year curriculum. I'm gonna give it to you under two conditions. You can offer it and charge the students the county college tuition, but in return number one, you have to offer and deliver the content that I give you, number two, whoever teaches it, I need to approve their qualification." So basically I loan the third year curriculum, I'm not giving it to them, nor are they creating it. So the integrity of the county college has been maintained, suddenly the county college become a four-year institution. Between our tuition and fees and their tuition and fees, suddenly we are now offering a four-year degree that costs only $30,000, which most of these kids are pale and other thing recipients, qualified, and most of this money can, I guarantee that all of it will be paid by the government.

0:19:21.4 AH: So you now create four year degrees for the industry that needs, right now, look at it, right now four million people just left employment. This country is desperate for, especially, technology area, tech areas. Imagine if you want to bring our manufacturing back and control over our own supply chain, we better have the workforce and we don't. And we better not. Our senior institution and our county colleges will die. And to me, that is a solution. It works. Now, people would say, if you do that, you're gonna lose one year of your revenue. I would say I take 50% of epsilon more than 100% of zero.

0:20:03.0 HS: Well put, and Dr. Houshmand you went to an area that I imagine our listeners have been wondering. Certainly, you have me excited, our listeners are eager. This sounds good. It can't be easy though, and it might be worth explaining some of the challenges that you face, how difficult has it been to get others on board? There's other institutions on board, other leaders getting through what I imagine is red tape, the entrenched thinking that for years, this has been the way, and we follow the way, and it's likely also contributed to what we've seen nationwide, there's poor transfer in graduation rates for students who start at two-year institutions. Talk about the difficulties. I imagine our listeners are interested in that.

0:20:46.2 AH: It's hugely difficult, and if anybody thinks that we know the problem is academic because the stake is so small, the fight is very bloody, it always is. And so as a result, it is tough. And to me, one thing that I have learned, and I have done tons of partnership in here, we have done one and a half billion dollar of construction in the smallest town in Glassboro over the past 10 years, all through partnership. The key to it is, the first and foremost, approach people from partnership. Don't make them feel smaller. That's very, very critical. Another one is, the bigger picture is you want to serve your community, your people, your country, rather than you are trying to kind of just enhance revenue, because you can enhance revenue, but you don't have to widen the rest of it. That's number one.

0:21:35.7 AH: Number two, recognize and be patient that along the way, you're gonna find people for all sorts of reasons, personal or otherwise, they're gonna slow you down. You're gonna have to be persistent, you're gonna have to keep on. And number three, quite honestly, I started with seven county college presidents. Of those seven, I managed to get the first... Only one of them first after four years. After three years, the second one came. After one year, the first... The third one came. And unfortunately, in my experience, the ones that wanna come now they're coming because they're not desperate, and so I think what you need to do, you need to... They see the path, you need to open a path in such a way to say, "Look, in this relationship by the way, I don't control the board of trustees, I don't control who is the president of that entity. It's none of my business, I don't control who is their faculty, this is their business. I have created a pathway for our people to get a four-year degree, affordably and accessibly and relevantly. So, that's really all I care about." And so I think if you do it that way and have patience and be persistent, it happens because it makes sense. And it doesn't hurt anybody.

0:22:54.2 HS: It does make sense. And yet still, I imagine there are listeners who are wondering, "Well, how do I get this off the ground? Who do I start to talk to?" Short of convincing Federal Government to provide greater funding support to higher education, what could we be doing or shouldn't be doing across education to make college more affordable? What are the risks as well? What if we don't... As a country, what risk do we face if we don't get a handle on this? I'd be curious to get your take on that.

0:23:26.5 AH: I'm sorry to say that we as academicians and academic leaders have always, due to the circumstances that we deal with, have always been used to focusing on the revenue side of our ledger, and never pay attention or hardly pay attention to expense of our ledger. And as a result, any time we had a budget shortfall, I'm talking about state institutions, we either went to the state, or if the state couldn't afford it, we simply increase the... Tuition increases by appropriate percentage. Now, if the inflation was 2% and we needed to increase by 8% in order to balance the budget, so be it, we did. And that recipe never teaches you how to fish. And this is something that I'd learned from the moment... Actually, I was at Drexel, when I was running a College of Continuing Education, that you gotta learn how to fish, and especially in the state institution where the total source of revenue that you have is either tuition and fee or state appropriation and for us, a little bit of auxiliaries here and there.

0:24:35.2 AH: If this is it, you would never be able to be in a strategic institution to do strategic planning, because you don't even have... You don't know how much money you have one year from now, much less writing a five-year plan. And so, the way that we dealt with this thing, I said three things, number one, I'm going to only focus on the revenue side, on expense side of my ledger, and I close the revenue side. In fact I said, "For as long as I'm president, the tuition and fees will never raise more than the rate of inflation, so you can go ahead and balance your budget out of that." And number two, I didn't have to say anything about the state because the state was cutting every year revenues.

0:25:16.2 AH: So I embark on increasing other sources of revenues. That was the second part. Number one, basically, 'cause they said to not rely on the state and everything, so I started basically doing what I call public-private partnership. I said there are areas in which that I am not simply good at, I'm not good at, for example, we all know that, we are not good at building, I found that we're not good at building our own housing units and managing it. It provides massive different maintenance and the profit margin is lowest. So I moved away all to, all public-private partnership. I even looked at academic buildings. There are instances in which I could have actually partnered with the developer to build an academic building, not even in my own land but in somebody else's land, and then eventually become owner.

0:26:11.2 AH: So we started to massive public-private partnership, but basically use other people's money to build the infrastructure. By doing so, you bring partners to your campus that are gonna make you stronger as an economic engine, because these people have invested their money there. Number two, chances are they run these things much more efficiently, especially if we can negotiate well, and you can, because you have a massive captured audience with a lot of expendable money in their pocket. And if you can do those things, then you end up reducing any different maintenance and you end up actually having more profit. In fact, I can tell you, between the dorm rooms that we built and we managed versus the dorm room that somebody else has built and somebody else has managed on somebody else's land, I make a $1000 per bed here, $250 per bed, based [0:27:05.7] ____ maintenance here, high quality per door.

0:27:13.3 AH: But more importantly as a result of this private partnership, we have tended 26 acres of land that used to only generate $110,000 rateable for the Borough of Glassboro into the most amazing Lawn Boulevard of half a billion-dollar investment that generates right now in excess of 5 million tax for the Borough of Glassboro annually, at least. So that was the second thing. Public for use other people's money. Pathetic. Apart from academic, never touched academic. In my opinion always, you invest in your academic, because that's really what you exist. You are there to create knowledge and to impart knowledge. Everything else in my opinion, has to be business. So you really keep the academic sacred, that creates the harmonious campus for you, that keeps the faculty on your side, and then you go after every other division with the university and running that career of business. You would be amazed how much saving there is. You would be amazed, because I have seen it and they are already in my bank. And the third thing, you find alternative sources of revenue, and that again we have done.

0:28:24.7 AH: Number one, 10 years ago, annual fundraising was 2 million dollars a year, annual research was 5 million dollars a year and annual continuing education, it existed for the million dollar a year. That was 10 years ago. These three right now, in excess of 120 million dollars. The continuing education is excess of 50 million dollars, 50% of it is profit, and all of it goes back to the general fund. I'm not generating significantly other sources of revenue than the state gives me appropriation for my main campus. Therefore, those three things have basically put the institution where our endowment and quasi endowment and cash basically went from 250 million dollars 10 years ago to 550 million dollars now. Our enrollment went roughly from 10 thousand to 23 thousand actually, last time we checked, 23231 to be exact. Our employment went from 1800 to 4300. Our research went from roughly 5 million dollars to 60 million dollars.

0:29:29.7 AH: And we went from a regionally ranked, nobody knew northeast college, into an auto university ranked nationally at 88 amongst the public research universities. And it's doable and it's not because I have been genius, no. Number one, I surround myself with very qualified individual, capable individual. I empower them but hold them accountable like a hawk. I do a lot of public-private partnership, I run everything around the business, and I'm extremely transparent. The budget of Rowan University is accessible to every faculty who wants to see it. I put it online. I have nothing to hide. The less control the better. The more participation out there the better.

0:30:15.9 HS: Well, in some ways, your leadership style and approach has helped in many ways, evolution of Rowan over the last few years, and the advice that you just provided to others who are looking for ways to get into this, I think it'd be very powerful if you're up for it, I think we might have some folks... Our listeners may wanna chat with you more, President Houshmand, so there's a world where you have to come back on this podcast and chat more, I know we could talk for hours on this topic.

0:30:45.9 AH: I see that as a public service, and I think anything that I could do to be of help of... Assuming that I can be of help, I would love to. We're colleagues, we are all facing challenges, we're all dealing with tons of, tons of difficult time, so we gotta do what we can to learn from each other and to share each other's successes so that all of us can kind of sustain ourselves, because to me, quite honestly, being a college president is the hardest job in the world.

0:31:09.7 HS: Incredibly challenging.

0:31:11.3 AH: You have tons of constituents, each of them wants a piece of you, and none of them wants the same piece. And that's the problem. And so the last thing that I want to do is to make that not better.

0:31:28.7 HS: Well, I wanna thank you for your time today. We touched on a lot of topics that probably could warrant their own podcast. We got public private partnerships here at the end, you talked to us about having our cake and eating it too, hot sauce at the beginning. All I know is I'm hungry for something, and I will say thank you. If you ever wanna come back to office hours, we'd love to invite you to return any time you want. Pick your brain some more. Thanks so much for being here.

0:31:53.3 AH: You're very welcome, I enjoyed it, and I hope that you will have a great day, and thank you for the opportunity.

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0:32:07.2 S1: Thank you for listening. Please join us next week when our guest outlines a strategy and a framework for bringing order to your enrollment management efforts. Until then, thank you for your time.

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