Tag Archives: Brian Mueller

PHOTO BY LILLIAN REID, AZ BIG MEDIA
Brian Mueller is the CEO of Grand Canyon University.

Mueller uses hybrid model to turn GCU into a winner

Brian Mueller has created the most successful business model in education. When he took over as Grand Canyon University’s CEO in 2008, there were less than 1,000 students on campus and about 10,000 online. Today, GCU has 8,500 students on campus and 50,000 online, with a new East Valley campus coming in 2015. Mueller has also expanded GCU’s science, technology, engineering and math offering with the launch of its College of Science of Engineering and Technology.
Az Business magazine caught up with the Antelopes’ biggest fan to find out how he helped GCU make the grade in business and with the books.

Az Business: How has the business model for higher education changed?
Brian Mueller: If you think of the 1970s, 1980s and 1990s, universities built their reputations based on the quality of their traditional-age students. Then, a market opened up with adults who wanted to go back to college and earn degrees while they were working and raising families. Most of the universities that ended up serving those students were private, for-profit universities and there was far greater demand than supply. You could grow as fast as you wanted and charge whatever you wanted and people were willing to pay for that convenience.
Everything changed in 2008. Tax dollars that helped fund public universities were in decline and donor bases dried up. Those mid-tier universities were forced to look to the adult market, which flipped the supply-demand in favor of the working adult student.

AB: How did you use that change in the marketplace to help GCU?
BM: I came here in 2008 because I saw an opportunity to create a hybrid campus — a strong traditional campus with a strong component of working adults — that shared a common infrastructure and spread the costs across two students bodies. By creating a hybrid campus, we were able to lower the price point significantly. After scholarships, the average GCU student pays $7,800 in tuition. Most students at private universities pay between $25,000 and $50,000 a year.

AB: How did you make that happen so quickly?
BM: I believed if we could get an infusion of funds, we could create something special. We came in June 2008, went public in November, got an infusion of $254 million, put huge dollars back into the ground campus and went to work building a brand based on the excellence of the education.

AB: How did you get investors to buy into the IPO in 2008?
BM: We were the first company to go public in three months, but I had been at Apollo Group for 22 years and was the CEO of the University of Phoenix Online when we went public as a tracking stock between 2000 and 2004, which turned out to be the most successful tracking stock in the history of Wall Street. So I knew those guys and they had made good dollars with us before. They didn’t completely buy the business model. Nobody believed that you could be successful or profitable with traditional students because it would always be a money loser. But the truth is our level of profitability is now about the same on both sides.

AB: What has been your biggest professional challenge?
BM: There were not many people doing online education in 1997, but we saw it was going to be huge. We had to fight the traditional academic community, who said, “How dare you deliver education online? Students need to be in a classroom with a professor.” The push-back was so strong that we just needed to push through it, accept the criticism, make counter-arguments and keep moving forward. Those same people who were yelling at me in 1997 are all trying to do the same thing now.

AB: What are your goals for GCU?
BM: Ten years from now, we will have 25,000 students on our physical campuses. Online, we will have 80,000 or 90,000 students. We want to be a university that provides excellent education, but in a values-based context and environment. And we want to operate as a company that helps transform the West Valley.

man standing in front of a shelf with a basketball on it

CEO Series: Brian Mueller

Brian Mueller
Chief Executive Officer and Director, Grand Canyon University

Assess the current state of private universities.
I think if you look at the top tier, the Ivy League schools, and those just below them, those people have such strong brands and such huge endowments that they are OK, and they can make it through an economic downturn without a whole lot of difficulty. … If you look at the next tier below that, I think they’re fine because their brands are good, their levels of awareness are good and the endowments allow them to keep the business of private education going. Where there is really a problem is the smaller, private universities that have great histories, that have great academic programs, that provide a great service to students, but they do not have large endowments. The economy is really hurting those kinds of institutions, which is why we’re in a good place now. We have sources of revenue other than those traditional students that come to our campus. Those sources of revenue make it possible for us to keep tuition very affordable for traditional students.

What are some of the most recent challenges that GCU has faced in the past few years, including last year’s initial public offering?
Five years ago, Grand Canyon was near bankruptcy. It was within days of going bankrupt. It was one of those private universities with a full liberal arts program that had been in existence, at that point, for 55 years, and had done a wonderful job of producing teachers and nurses, especially, but it didn’t have a large endowment. Coming in, trying to build an online program using the Grand Canyon brand for working adults was a really smart move made by the initial owners, Brent and Chris Richardson. It was a smart move, but it’s not easy to do. It’s a lot more difficult to do than people think.

They did absolutely struggle for the first three years or so, but they got the enrollment up to 15,000, it became profitable, which allowed us the opportunity to go public. That’s when they called me. They said, ‘Since you have some public company experience, would you come over and be the CEO?’

When I came over and took a look at what existed here, I thought it was a rare and unique opportunity because what you have here is Arizona’s only traditional, private university in a destination city, in a destination state, with a wonderful campus, a good brand, a long history. To build an online program on top of that is just something that doesn’t exist out there today. There is no well-branded private university that also has an extension of that mission to working adults all over the country and all over the world in an online format. There isn’t one of those, so I thought this was a wonderful opportunity, and as it turns out, I’ve been here for a year and the opportunity is even better than what I first thought.

What do you believe GCU’s role is in this current economy?
I think we have a number of very, very important roles. One, we offer working adults in the state of Arizona and all over the country a chance to do an academic program, completing a bachelor’s degree, completing a master’s degree or a doctoral degree, in an online format while they work. As we look at ourselves from that vantage point, positioned against the other players in the space, we are probably the low-cost provider … A second role that we play is that we are able to make, because of the profitability of the online students who are at the very low end from a tuition standpoint, we’re able to make the traditional college experience for traditional students in a private university very, very affordable. We just announced that we are freezing our tuition levels through the next two years, and our tuition is already way under what most private universities are. We’re lowering our room-and-board by 20 percent and we are eliminating almost all fees. We are making it possible for middle-class American families or even lower-class middle-American families to come to a private university and experience that private university setting for four years to complete their degrees and for a rate that is very close to what they would spend at a state university.

It’s a significant contribution that private universities make, because the students that they educate aren’t at all a burden to the taxpayer. There is no taxpayer subsidy that goes into supporting our students. That helps when there is a declining tax base, a declining revenue base, which is very, very important and necessary to support students who attend a state university or community college. So that’s a significant contribution to the economy. Another contribution is the fact that we are one of the fastest-growing employers in Arizona today. We’re in the West Valley, we’ve got 1,300 employees and almost 2,000 faculty members, many of them adjunct or part-time faculty members, but we are growing the employment base in Arizona. We’re one of the few companies that are in that fortunate position of being able to add hundreds of jobs on an annual basis.

We’re also going on a major building campaign here. We’re building a new dormitory that will be ready in September 2010 that will have 600 beds. We’re building a 55-thousand-square-foot events center, which will be ready next September; we’re building a new classroom facility that should be ready in September or October of next year; and we’re building an events center that will seat 5,000 people for our men’s and women’s basketball programs and for concerts. That building campaign is going to put a lot of people to work, as well.

What are skills a C-level executive needs in the private university business?
I think all of the C-level skill requirements that would be in any other industry are really important. You have to be able to think strategically about the business and set the vision for the company and make sure that it is communicated and understood and everyone knows how they are plugged into that.

Secondly, you’ve got to break down silos and you have to make sure people work together, are all on the same page and are all pulling in the same direction. There’s so much power in that and it’s not an easy thing to do. … A publicly traded company is a tricky thing, so you’ve got to run the company, but you also have to make sure you’re keeping an eye out on the target, which is to make sure that your investors get a reasonable return. So you also have to balance running the company with making sure that you are spending time with the investors, making sure that they understand your strategy, that they are comfortable with the moves you’re making, how you’re investing capital so that they feel confident that the return they are expecting they are going to get.

… With all that said, I think the people who run these kinds of companies the best are those that have a strong amount of experience in higher education. They have to be educators and people who understand education and how education works and what they think the future of education is going to be. At the end of the day, the value we are creating is around the value that is created for the students who come, learn and graduate.

    Vital Stats



  • Named CEO of Grand Canyon University in 2008
  • From 1987 to 2008 was employed by Apollo Group
  • From 1983 to 1987 was a professor at Concordia University
  • Received his Master of Arts in education degree and Bachelor of Arts degree in education from Concordia University
  • www.gcu.edu
Photography by Mark Peterman

Who to Watch ‘O7

Who to Watch 2007

These seven individuals will undoubtedly make headlines in 2007. Enjoy this sneak peak of the Class of ’07.

 

William Harris, Science Foundation Arizona
www.sfaz.org

William HarrisWhen you enter Dr. William Harris’ office, something other than science jumps out at you. Photographs of Harris with state leaders like President George W. Bush hang near autographed photos of baseball heroes. His bookshelves feature rows of studies that lie near bats and leather balls. But upon closer examination, his baseball bat has a flat face with a curved end and is not a baseball bat at all. His bat is a hurling stick. And the stick is covered with autographs—from Ireland’s prime minister and deputy prime minister. Harris began his new role as president and CEO of Science Foundation Arizona fresh off a five-year term as Science Foundation Ireland’s director general. He adopted hurling as his sport-of-choice after moving to Ireland, to strengthen the country’s science industry in 2001. His work helped contribute to a booming, viable economy that has become a template for other nations to follow.

“In 1988, the World Bank almost declared [Ireland] bankrupt,” says Harris. “Through education and a commitment to the idea that being rich is better than being poor, the country changed things around…These simple principles galvanized people to work together. Ireland wanted to create a cadre of competitive workers and speed was important in getting it done. The challenge was compelling.”

Harris spent his career teaching chemistry at the collegiate level in South Carolina. Later, he worked for the National Science Foundation for 18 years, then came aboard Columbia University’s Biosphere 2 project in Tucson and eventually returned to the south.

Born out of the 21st Century Innovation Fund and initiated in the spring of 2006, Science Foundation Arizona seeks to support the science, engineering and innovation industry within the state. The nonprofit is a public/private partnership and was appropriated with $35 million to help create a competitive environment that encourages and supports knowledge-driven economics.

“We should be embarrassed by the fact that we rank 47th or 48th in education,” says Harris. “How can you be an Arizonan and be at the bottom and think that it’s okay? Why don’t we have a shared consensus that we owe our children a good education?”

“A culture that welcomes new things and new ways of thinking is very attractive to young people.” he says. “I’d like to create a culture where there is an ambition here for high school students to become the next Bill Gates or Michael Dell, where this state will inspire and support these students. Of course, I also want the next greatest baseball pitcher to come from here too,” he adds.

Dana Naimark, Children’s Action Alliance
www.azchildren.org

Dana NaimarkDana Naimark possesses that rare combination of business savvy and genuine compassion. Her desire to advocate for children does not detract from her business acumen and strategic expertise. This dichotomy has helped her represent Children’s Action Alliance for 13 years as director of special projects and now, allows her to segue into her new role as president and CEO starting this month.

“How children are doing and functioning is so important for all Arizonans,” says Naimark. “[CAA] is 18 years old and our founder is moving out of state, so our goal is to remain as strong, credible and active as ever.”

CAA is a nonprofit, privately funded research and advocacy organization which seeks to improve the quality of life of Arizona’s children. The organization focuses on vulnerable children, including those who are abused, neglected or live in poverty. CAA does not provide direct services; its staff influences public decision and provides research and potential solutions to benefit these children. “We identify the problem, identify the solution, then bring people and ideas together to make those solutions happen,” she says.

Her major goals for the organization are health coverage and early childhood development. She stresses that continued research of babies, toddlers and preschoolers’ experiences affect their overall brain development.

“[This research] is incredibly vital to the state,” she says. “It’s critical to what Arizona will look like—Who will be our workforce? Who will care for us?”

Her involvement in policy began as a budget analyst for the state legislature under Gov. Rose Mofford. CAA Founder Carol Kaiman soon realized the agency couldn’t be too effective on children’s issues without being effective on budget issues and needed someone who would both understand and excel in both these subjects. “At that time (1993), I was looking for a challenge that was rewarding and had a mission I cared about, so it was a perfect match,” says Naimark.

CAA’s $1.3 million budget supports non-partisan research and advocacy projects and a staff of 13 people in Phoenix and Tucson. Both national supporters, like the Annie E. Casey Foundation and the Ford Foundation, and local funders, like the Pulliam Foundation, help provide the needed financing to let Naimak and her staff continue their work.

“Over the past few years, Arizona and the United States have become more polarized,” she says. “CAA focuses on finding common ground. There is a lot of hope and confidence we’ll find ways to carve solutions out in this polarized environment. Professionally and personally, I’m committed to helping families here—both for the state’s future and for my own family.”

Jennifer Croll, Croll Corp.
www.themixshops.com

Jennifer CrollIf you instantly recognize Jennifer Croll’s name, you probably have a savvy shopper in your circle or you yourself are the fashion plate. Her boutiques, which share the same name, offer high-end designer clothing for men and women. This fashion-forward entrepreneur could easily be mistaken for one of the glamorous celebrities she dresses—from her white, Dior sunglasses down to her black, peep toe heels.

However, this successful, trendsetting retailer now has another avenue to create a more stylish Arizona. The Mix, a 30,000-square-foot space along Scottsdale’s waterfront, is Arizona’s newest foray into exclusive shopping and upscale entertainment, and Croll’s first foray into large-scale development. Her project is the retail element of Southbridge, the “urban village” that will offer residences, dining, entertainment, a nonprofit aspect and plenty of pedestrian-friendly space.

“We’ve handpicked the tenants and stayed local,” she says. “We wanted to embrace the local talent, so we sat with each prospective retailer to find out their vision, reputation and personality… We want something unique.”

There are no national chain stores included in the $10 million retail development. “If there ever were to be another Mix in another city, we’d localize the retailers there too,” she says. Three buildings comprise the retail component: Nest offers upscale products for home and garden; Live features fashion, lavish restaurants and luxurious spa treatments; and Play, which features a toy store and interactive retailers.

Her aptitude for predicting fashion trends (in addition to her aversion to mall culture) led to the opening of her first boutique in Los Gatos, Calif. A few years later, Croll and husband Cristian opened boutiques throughout California, Texas and Arizona. They eventually relocated here and now have been completely focused on The Mix. She hopes retailers like Moody Blues, Melange and Angelic Garden will help create a major destination point in downtown Scottsdale.

Croll’s retail experience complements the work of partner Fred Unger, president and founder of Spring Creek Development, who is developing Southbridge. “Fred knows all about the hospitality and residential industries, and since I know retail, it was a great [collaboration],” she says. “I’ve worked with brilliant people on this project. We’ve collected a group of people that all believe in this vision—I couldn’t do it on my own.”

With The Mix opening August 2007, six successful boutiques across the western United States and two children, Croll’s schedule will not be easing up any time soon. “This has been an unbelievable process—designing the project, picking retailers,” she says. “It’s been fun and different from my past projects.”

Mike Ebert, RED Development
www.reddevelopment.com

Mike EbertVisit any Arizona drugstore or airport gift shop and you’ll find racks of postcards featuring cacti, sunsets, howling coyotes and the Grand Canyon. Mike Ebert hopes to add one more photo to the display—CityScape.

Ebert, a managing and founding partner of RED Development, hopes CityScape, a 2.5 million-plus-square-foot downtown development, will be the “iconic project for all of Phoenix” and its skyline will serve as postcard fodder for years to come. “When people are flying over the airport, they will say ‘What’s that?’ as they touch down near downtown Phoenix. This is the opportunity for downtown Phoenix to have a heart and soul.”

The three-block, Copper Square downtown project is one of the largest private investments in the state’s history—nearly $1 billion to create a thriving urban development. CityScape will offer residential units, a boutique hotel, 550,000 square feet of Class-A office, 250,000 square feet of retail, more than two and a half acres of pedestrian-friendly open space and three Light Rail stops. Phase I is set to open spring 2009 and the remaining construction planned for a 2011 completion.

“Consumers want an experience now,” he says. “[CityScape’s] niche will be the one place in Arizona to have a true urban experience.”

Ebert’s vision for an urban destination perfectly matched downtown’s renaissance as the Phoenix Convention Center expansion, Arizona State University campus, University of Arizona Medical School and other projects began to take form. Building an urban hub required the collaboration of commercial real estate leaders like Cardon Development Group, Baron Collier Companies and Atlanta’s Novare Group. Ebert says downtown previously focused on government, law and banking. Now, as the Arizona Biomedical Campus and ASU campus progress, Phoenix can get the “creative type” downtown.

“Our timing couldn’t be better,” says Ebert. “CityScape can embrace diversity; suburbia tends to be very homogeneous.”

Ebert’s youthful looks seem to contradict his well-established reputation throughout the state. He, with three colleagues, formed RED Development in 1995.

Select purveyors A.J.’s Fine Foods and P.F. Changs China Bistro are the first retailers to commit to the project and be a part of the downtown entertainment attraction. The development will look progressive and contemporary, intermixed with an outdoorsy quality to satisfy pedestrian needs.

“There is no central spot downtown,” says Ebert. “Our goal is when someone says, ‘Let’s meet downtown,’ it’s at Central Avenue and Washington Street—at CityScape.”

Gary Waissi, Ph.D., Arizona State University
www.west.asu.edu

Gary WaissiWhen you first meet Gary Waissi, Ph.D., its difficult not to pay attention. A hard-to-place accent comes out of an imposing frame, and while you’re still figuring out where he’s from, Waissi has cracked a joke about his native Finland and his worldly escapades.

With an academic and global business background, Waissi will impart his knowledge and professional skills within his new position as dean of Arizona State University’s School of Global Management and Leadership (SGML). He hopes to extend the school’s “global footprint,” designating ASU as a leader of globally oriented management education and research by 2011.

“When everything is said and done, my internal goal is to make this school nationally recognized as a global presence within five years,” Waissi says. “If I can help ASU expand globally, from this small school at ASU West, then I’ve succeeded.” Currently, the school has 1,700 undergraduate students (200 graduate students); in five years, he hopes enrollment increases to 2,000 undergraduate students (800 graduate students). Additionally, he plans for the SGML to launch six new degree programs by fall 2008.

Accomplishing this goal will be a challenge, but this is nothing new to someone whose strategic planning efforts have become a professional trademark. Waissi’s proven ability to successfully assess, plan and implement academic opportunities for international institutions has taken him around the world, specifically in developing regions like Rwanda, Uzbekistan and Ukraine.

Waissi comes to ASU from the University of Michigan-Dearborn (UM) where he completed his deanship at the School of Management last year. Since 1982, Waissi had been with the UM first as a Ph.D. candidate, then as faculty member, then department chair and eventually dean.

Before his time at the UM, he worked as project manager for Philipp Holzmann AG in 1979. His position with the construction giant brought him to west Africa, where he helped build Nigeria’s Onne Lighter Terminal Port and other projects during the course of three years. Earlier, he left Finland to study in Germany and later work as an assistant at the Helsinki University of Technology.

“I went to Nigeria as an engineer, but during my stay, the project manager wanted to return home,” he says. “Overnight, I was given the responsibility of this huge project. I was 29 years old and had almost 1,000 people working for me. I had no idea at the time, but [in today’s dollars], that was a $1 billion project.”

Dr. Richard H. Carmona, Canyon Ranch
www.canyonranch.com

Richard Carmona

Photography by Brian Fiske

Dr. Richard Carmona traded in power lunches for balanced, gourmet cuisine and bi-partisan juggling for low-impact aerobics when he left Washington D.C. for Arizona earlier this year.

After completing his term as 17th Surgeon General of the United States, Carmona returned to his home in Tucson and began work with Canyon Ranch—serving as vice chairman of the parent company, CEO of Canyon Ranch Health and president of Canyon Ranch Institute, the company’s nonprofit division. He’ll achieve his goal of prevention not only as business leader but educator as he receives the first Distinguished Professorship in Public Health at the University of Arizona’s Mel and Enid Zuckerman College of Public Health. Mel Zuckerman founded Canyon Ranch 27 years ago, with its original destination health resort in Tucson, abutting Sabino Canyon.

“D.C. is a contentious environment and health is one of the most partisan issues out there; but as the doctor of the nation, you’re there to take care of the people,” says Carmona. He is the image of good health—a toned physique that more resembles one of his university students than one of his 57-year-old peers. Starting a new career path within a wholesome, amiable setting has allowed Carmona to re-focus his efforts on preventative medicine and health and wellness. A staunch supporter of “health-oriented” treatment, Carmona’s new challenge becomes the conversion of medical research into a best practices format for people to improve their health.

 

“I have a very close relationship with the community in southern Arizona,” Carmona says. “I’ve known Mel and Enid for years and they brought me back here. When [I left D.C.], there were job offers from around the world. But my work as surgeon general was a perfect fit for Canyon Ranch’s vision and mission.” Canyon Ranch goes beyond the hospitality, healthcare and beauty industries—the company is an amalgamation of everything needed to live a healthy life, both physically and metaphysically. The resorts offer sumptuous meals that meet balanced dietary guidelines, individual and group classes designed to enhance the mind, body and spirit and opportunities to create personalized assessments of current health goals and future aspirations. Canyon Ranch conveys its philosophy of disease prevention and overall health betterment every way possible—on campus, by research and through collaborations.

Zuckerman, aware of the fact that not every person has the means to access Canyon Ranch’s world-class resources, set up the Canyon Ranch Institute, where doctors and nurses from low-income areas can learn Canyon Ranch methodologies and techniques to take back to improve their respective community’s level of health.

“The revenue brought in by Canyon Ranch provides opportunities to better communities,” says Carmona, who now serves as president of the nonprofit sector. “I have students who want to provide public health to third world countries, and I tell them, ‘Look around.’ Some of the Native American reservations have health statistics sometimes worse than a third world country. Domestic violence, obesity, hypertension, maternal and child mortality rates are all too high. Mel and Enid want best practices in place for needier communities to change the current numbers.”

Carmona describes himself as an “agent of change.” His goal to position Canyon Health at the forefront of the health and wellness industry will secure its place as the No. 1 health organization. “What I’m trying to do here is to ‘be a futurist’ and figure out where we need to be for the health of the American public.”

Brian Mueller, Apollo Group
www.apollogrp.edu

Brian MuellerOne of the biggest local stories in 2006 was the Arizona Cardinals’ stadium. And with the excitement that surrounded the new look, just as much controversy swirled around the frenzied bidding wars to name the stadium. As potential sponsors salivated at the chance to win naming rights, ticket holders soon discovered where they would be attending games: University of Phoenix Stadium. The 20-year, $154 million naming-rights deal was a huge marketing coup for Apollo Group Inc. (University of Phoenix’s parent company) and its president, Brian Mueller. This sports-marketing venture sets off a massive marketing campaign beginning in January. “The naming rights [deal] is just a small part of the campaign,” says Mueller. “The point is to create dialogue of who the University of Phoenix is and what we do. We want to lift the credibility of the institution so the value of our degrees continue to grow.”

Mueller’s push for national exposure goes far beyond the NFL—University of Phoenix will soon partner with giants Time Warner and Monster.com. Time Warner will work with the academic institution in regards to content. Mueller wants archived/current CNN material to be sorted into coursework, and partner with America Online to build online communities of students, alumni and faculty. Monster.com would involve an advertising partnership to build co-branded Web sites offering information about careers.

“We’re targeting working adults that comprise most of our student population,” says Mueller. “We want to position the university as being innovative in higher education, that thinks ahead in terms of its students.”

According to Mueller, 320,000 students throughout the world attend University of Phoenix, either in person or online. He hopes this marketing push grows the students base 10 percent a year, while also improving the image of the institution. To accommodate this growth, the company is consolidating its online staff and corporate headquarters to the new Riverpoint Center at Interstate 10 and 32nd Street. The 630,000-square-foot project, opening spring 2007, is one of the largest capital projects for Apollo.

AZ Business Magazine December January 2007The University of Phoenix is an important force in Arizona’s economy. Mueller says the school produces $2.4 billion worth of revenue per year, employs a workforce of 10,000 people, leases 2.5 million square feet of space and pays more than $40 million in taxes.

Mueller began his career in education as a high school teacher and basketball coach, later teaching at Concordia College in Nebraska. His work with the University of Phoenix began in 1987 on the Phoenix campus and after many promotions, including CEO of the online campus, he became president of Apollo last year.

 

AZ Business Magazine Dec Jan ’07 |  Next: Open for Business