As he struggled to get his printing business off the ground in the 1990s, Michael R. Cunningham applied the lessons he learned in night classes in graduate school at New York University.
Twenty years later, Mr. Cunningham, 54, has not entirely shifted focus. Although managing a multinational company is behind him, the new chancellor of the 27-campus National University system says he is still selling a product—and an unconventional one at that.
At National, the second-largest nonprofit university in California by enrollment (the University of Southern California is the largest), most of the nearly 18,000 students participate only in distance education. More than two-thirds of them are at least 25 years old. In the way it delivers its courses and the characteristics of the students it serves, National resembles many for-profit institutions.
But Mr. Cunningham says such classifications are beside the point. "I always look at the customer, the student," he says. "Basically, the student really doesn't care whether it's for-profit or not-for-profit on its face." But the student does care about such measures as loan-default rates, and that is where National University sets itself apart, he says. It had a three-year default rate of just 7.4 percent among students who began repayment in the 2010 fiscal year, according to U.S. Education Department statistics, compared with a national rate of 14.7 percent.
Mr. Cunningham succeeded Jerry C. Lee, who had been president of the system's flagship campus, in San Diego, from 1989 to 2007 and chancellor of the system from 2001 until September. Mr. Lee had previously led Gallaudet University.
In July, Mr. Cunningham was hired as president with the understanding that he would eventually succeed Mr. Lee as chancellor. That transition came sooner than Mr. Cunningham had anticipated: "A month and a half, two months into it, Dr. Lee called me into his office and said, 'Mike, it seems like you've got the hang of this. I'm retiring next month.'"
The idea of having an entrepreneur replace the system's longtime leader sparked some fear among faculty members that a bottom-line mentality would take precedence.
But that would ignore his long tenure in academe, Mr. Cunningham says, including eight years at San Diego State University. During his last two years there, he was dean of the College of Business Administration.
Gangaram Singh, who served as associate dean under Mr. Cunningham, says that professors voiced similar concerns when Mr. Cunningham was named dean, but that the two leaders complemented each other. "The goal was to have someone with industry experience lead the college," Mr. Singh says. He was able to "manage internal operations," while Mr. Cunningham handled mainly external affairs, to "predominantly positive" results. "You always worry, no matter who comes in, right?" says Mr. Singh, now interim dean of the college.
Managing at a public university took some adjusting, Mr. Cunningham says. "The pace at a public university is a little bit slower than the pace in an entrepreneurial business," he says. And while shared governance is "a wonderful thing," the schedule of meetings needed to make policy decisions was at first "a little bit frustrating."
Improving graduation rates is a top priority, Mr. Cunningham says. At National, 65.5 percent of undergraduates and 57.9 percent of graduate students finish within six years, he says. The Education Department reports a much lower graduation rate for the university, but that figure, 23 percent, represents only first-time, full-time students, of which there are few at National, Mr. Cunningham notes.
One-on-one mentoring and a pilot program of free remedial coursework, aimed mostly at veterans, are in the works to give further support to students, he says.
Those efforts will strengthen National University's position in the adult-education sector, he says. He is confident that the university will be able to maintain its standing as other institutions enter the online marketplace.
"It's very hard for a traditional university with traditional faculty to really ramp up quickly in that space," Mr. Cunningham says. "I know other universities are going to do very well with it, and some are doing a very good job at it. But this is something that just doesn't happen overnight."