The Mount St. Mary’s Presidency Was a Corporate Test Case. It Failed Miserably.

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With his resignation on Monday as president of Mount St. Mary’s University of Maryland, Simon P. Newman closed out a tenure that had become synonymous with an emerging brand of corporate-style college leadership.

Mr. Newman’s presidency reads as a failed experiment. Before he was hired, in late 2014, Mr. Newman had no experience in higher-education administration. But his background as a financier made Mr. Newman a plausible candidate to reinvigorate a small, tuition-dependent Roman Catholic college struggling to stay relevant in a crowded marketplace.

It didn’t work.

At a time when a good number of university trustees are looking for nontraditional leaders to shake things up, Mr. Newman’s turbulent ride at Mount St. Mary’s may well serve as a cautionary tale. For all of the fresh thinking and clear-eyed business sense that he brought to the job, professors say that Mr. Newman simply failed to appreciate the profound cultural divide between Wall Street and academe.

Uproar at Mount St. Mary’s

A controversial freshman-retention plan at Mount St. Mary’s University of Maryland, and the way the institution handled the ensuing criticism, cast the small Roman Catholic campus and its president, Simon P. Newman, in a harsh light. Mr. Newman resigned after weeks of controversy, having drawn the ire of his own faculty and many others in higher education. Read full Chronicle coverage, along with commentaries, in these articles.

It was Mr. Newman’s blunt style, which played just fine in the high-octane investment world, that brought his university presidency to a point of crisis several weeks ago. Describing a novel retention plan that would encourage struggling students to drop out before they could be counted as failures under federal rules for measuring graduation rates, Mr. Newman purportedly used a graphic analogy that would come to define him.

“This is hard for you because you think of the students as cuddly bunnies, but you can’t,” Mr. Newman is alleged to have told a professor. “You just have to drown the bunnies … put a Glock to their heads.”

Colorful language aside, Mr. Newman has said he merely wanted to give students a chance to get their money back if they were unlikely to finish.

The comments shocked many, but such talk would not have been out of place in Mr. Newman’s former life. And a fuller look at his corporate background shows that he was probably a poor fit from the start for the church-affiliated liberal-arts college.

An expatriate from England, Mr. Newman settled in Los Angeles in the 1990s and became a player in private equity. In that high-risk realm of investing, managers like Mr. Newman arrange buyouts of companies and try to make them more profitable, sometimes by laying off people and cutting benefits. At Mount St. Mary’s, Mr. Newman employed the same tactics.

Dana N. Miyoshi, who worked with Mr. Newman at L.E.K. Consulting, says that their business requires an antiseptic view of the world. It would be paralyzing, Mr. Miyoshi says, to overthink how a single mother or an aging worker might be affected by a corporate restructuring.

“One of the partners at L.E.K. used to say it was like pruning a tree,” says Mr. Miyoshi, who worked in the marketing department of the firm’s Los Angeles office. “Sometimes you have to cut off part of the tree for the whole tree to survive. As devastating as it is to families, that’s the way they justified it.”

At L.E.K., Mr. Newman was known as a closer. After teams of consultants crunched numbers and analyzed a company’s strengths and weaknesses, it was Mr. Newman’s job to pitch clients on the firm’s services.

“At that time, the big thing was increasing shareholder value,” Mr. Miyoshi says. “That was the mantra on Wall Street: How do you maximize dividends? What do you do to cut the bottom line?”

And all of that had to happen quickly. Unlike academe, which sets its watch by centuries, private-equity investors tend to think in terms of seven-year plans.

Get in. Get out. Get paid.

In his role as president of Mount St. Mary’s, Mr. Newman showed impatience with the deliberative pace of academe. In November, for example, the president acknowledged that he had moved forward with a plan to cut employees’ health-care and retirement benefits without first consulting the relevant faculty committees, an email obtained by The Chronicle shows. Besides, Mr. Newman said, the professors were sure to oppose the changes anyway.

“I have tried repeatedly to indicate that our financial situation is too precarious to allow that kind of time,” Mr. Newman wrote to the leaders of the university’s Faculty Governance Committee. “A decision had to be made.”

Mr. Newman’s résumé includes a stint at Bain & Company, a consulting firm that has taken some criticism for advising colleges to increase revenues in a manner that some professors have argued would erode educational quality.

Ferey Faridian, a financier who describes Mr. Newman as a good friend and a talented executive, says that those who thrive at companies like Bain tend to be highly analytical and reluctant to trust information without personally vetting the source.

“We are trained to figure out what people have had for breakfast before we talk to them,” Mr. Faridian says. “That’s the level of rigor. We have been trained to be skeptics.”

A Team of Consultants

Simon Newman was known as a grinder, comfortably pivoting from deal to deal among Los Angeles’s show-business elite. He did work for clients like Disney and Sony. He dreamed of buying Universal Studios. He married a CBS executive who developed content for daytime shows, including Let’s Make a Deal and The Price Is Right.

But the Newmans, who have two young children, saw in Mount St. Mary’s a chance to settle down. Before they left, they gathered their L.A. friends together for a going-away party. Mingling in the couple’s Cape Cod-style home in the San Fernando Valley, Mr. Newman’s guests from the consulting world started to size up what their friend’s surprising career shift might mean for their own bank accounts.

“A lot of people there were consultants, and they were licking their chops saying, ‘Simon’s going to have a lot of work for us,’” says Mr. Miyoshi, who was in attendance.

And they were right.

Early on, Mr. Newman brought in professionals from out West to help him at Mount St. Mary’s. That became a source of tension. Before long, it seemed that the president was relying on outsiders for advice more than the university’s established administrators, several observers of his presidency say.

“He came in and almost immediately unpacked his suitcase with a handful of consultants that came with him,” says a former administrator, who asked to remain anonymous because he feared that speaking candidly might jeopardize his career. “And they basically began operating the university as a shadow cabinet. The traditional way of doing business ceased.” (Mr. Newman declined to be interviewed for this article.)

One consultant the president hired was Adam G. Button, a classmate of Mr. Newman’s at Stanford University, where, in 1990, both men earned master’s degrees in business administration.

Mr. Button met with the university’s top administrators, and at least two of them say they met the consultant before ever speaking to the president. That was more efficient, Mr. Newman assured.

“It was put to us that he had a lot to learn, that he had a very limited time in which to learn it, and these were basically his trusted eyes and ears,” says Joshua P. Hochschild, an associate professor of philosophy.

Another of the consultants hired by Mr. Newman is Simon Y. Blackwell, who has the title of “chief transformation officer” at Mount St. Mary’s. Mr. Blackwell, who served as a Green Beret, worked with Mr. Newman at TradeYard Inc., an online auction site for used construction equipment.

Things did not end well at TradeYard, where Mr. Newman was chief executive. Like so many start-ups in the late 1990s, the company folded when the dot-com bubble burst. When TradeYard started to run out of money, Mr. Blackwell had to lay off one of his own relatives. “It was probably the hardest thing I ever did,” he says.

And yet, in Mr. Newman and Mr. Blackwell’s line of work, painful management decisions are accepted as part of the job. “It wasn’t personal,” Mr. Blackwell says.

Corporate-Style Firings

During Mr. Newman’s relatively short tenure in academe, some at Mount St. Mary’s say that the university began to feel more like the hard-charging business world whence Mr. Newman came, with a corporate chill to the president’s handling of sensitive personnel issues.

The most visceral example of his boardroom efficiency came on a rainy October day when six people were fired in quick succession. One was James (Duffy) C. Ross III, director of communications.

Around midmorning, Mr. Ross says, he received a note instructing him to meet at 1 p.m. with the vice president for university affairs. When he arrived, Pauline A. Engelstätter, the vice president, was seated at a small table with an envelope in her hand.

“She took a deep breath and said, ‘Duffy, the university is exercising its option in discontinuing your employment effective immediately,’” Mr. Ross recalls.

Ms. Engelstätter was “quivering,” Mr. Ross says, and he tried to spare her the awkwardness of continuing to read from a script. “I reached across the table, and I grabbed her hand and squeezed it, and I said, ‘Pauline, you don’t have to do this.’ And she said, ‘Yes I do.’” (Ms. Engelstätter did not respond to an interview request.)

As the process unfolded, Mr. Ross’s staff members were ushered into a conference room with Mr. Newman, who told them that their boss was being fired, Mr. Ross says. The communications director was then escorted to his office by public-safety officers who asked that, in their presence, he wipe his university email account from his cellphone.

“I had five minutes to gather as much as I could, grabbed my coat, and was escorted out by the public-safety officers,” Mr. Ross says. “There was very little emotion involved in the process. It was very clinical. It was very straightforward, no time for reminiscing or, for that matter, tears. It felt completely corporate.”

The president’s handling of the firings in the fall was a preview of things to come. When Mr. Newman’s inflammatory comments about struggling students came to light, he forced the resignation of David B. Rehm, who as provost had expressed misgivings about the plan. Mr. Rehm retained his position as a philosophy professor. There were other casualties as well. Ed Egan, director of the university’s prelaw program, was fired. So too was Thane M. Naberhaus, an associate professor of philosophy.

Under pressure, Mr. Newman reinstated the professors. But that action did little to change perceptions that the president viewed the university as a business where disloyal employees could and should be purged. In February, faculty members voted 87 to 3 to demand Mr. Newman’s resignation.

Mr. Newman may stand out as a notable example of a businessman turned college president, but he is not alone. In recent years, the boards at Bowdoin and Muhlenberg Colleges have hired leaders with similar credentials.

In September, J. Bruce Harreld, a former vice president at IBM, was named president of the University of Iowa. The appointment at Iowa stirred outrage among professors, who have argued that Mr. Harreld’s academic résumé is too thin. Mr. Newman’s resignation may validate professorial critics who question the rise of corporate college chiefs. But that is not how Mr. Newman’s friends in the business world see it.

Bret D. Masterson Sr., a director at a private-equity firm in Los Angeles and a former colleague of Mr. Newman’s, likened university professors to a labor group fighting the very changes that are required to save the company.

“You think about industries that have really entrenched, powerful labor groups, like airlines and auto companies,” Mr. Masterson says. “They go bankrupt a lot because you have these powerful groups that frankly don’t like change.”

Mr. Newman will “land on his feet,” Mr. Masterson says. He is less sure about Mount St. Mary’s.

“They have got to adapt,” he says. “It sounds like Simon may not have been as diplomatic as he could have been about it, but they are probably shooting the messenger.”

Meantime, the board at Mount St. Mary’s has named one of the university’s deans as acting president.

He heads the business school.

Jack Stripling covers college leadership, particularly presidents and governing boards. Follow him on Twitter @jackstripling, or email him at jack.stripling@chronicle.com.