From Non-profit To IPO: The Turnaround Of Grand Canyon University: Brent Richardson (Part 2)

SM: In 2001 you sold the company. Is that when you ran into Grand Canyon University?

BR: We sold, and like most entrepreneurs I had started another company with my brother. That was Masters Online, in which we were using all the things we had learned about the Internet and online education. We were partnering with universities such as Texas Christian, Loyola Marymount and about 12 others. We would do everything from back-office work to writing curricula. We would put curricula into digital format and get them approved by accrediting bodies. The final service we were offering, and one that we partnered with Grand Canyon on, was recruiting students. In the case of Grand Canyon, we had already worked on their curricula and put it online, so they just needed students to come into those programs. We recruited a bunch of masters in Education students in the fall of 2003 to go to into these programs at Grand Canyon. We found out that the university was in financial difficulty. At the end of 2004, we ended up buying Grand Canyon University.

SM: Did they file for bankruptcy?

BR: No, they were a not-for-profit.

SM: Did you buy it as a not-for-profit and convert it into a for-profit entity?

BR: Yes, we did. We technically bought the assets and converted into a for-profit entity. If you have a bankruptcy you lose your accreditation. It is tough to get through that again.

SM: How long is the accreditation process these days?

BR: If you were starting from scratch, I would think that it would take 5-7 years if everything went right.

SM: It was perfectly worth purchasing their assets just for the accreditation alone, correct?

GR: Absolutely.

SM: After you purchased the university, what were the first five things you did to start the turnaround process?

BR: The official close date was February 2004. When we got in here and figured it all out: we started praying! As you do in every turnaround, we came in and assessed personnel. There were a lot of problems here. It was a sleepy little Christian university, and that seems to be how people wanted it to be. We had to change around personnel and get the right people in the right places. That was a big thing. We business mapped all the processes and started writing or buying software for our educational delivery.

SM: Let me go down to a more granular level. What did you do with the team? Non-profit and for-profit teams are very different from each other.

BR: Behind the scenes we had something that really helped us. Masters Online was my company and we had about 30 people in it at the time. We ended up rolling that company into Grand Canyon. We had a lot of very young, entrepreneurial go-getters which contrasted with the old Grand Canyon environment. Over the next year I replaced a lot of people at the university, and I also found that some talent that was better utilized in a different way, in different positions. We had to clean it out, which did involve firing a lot of people. It took three years to change the culture and arrive at the point where I wanted to be.

This segment is part 2 in the series : From Non-profit To IPO: The Turnaround Of Grand Canyon University: Brent Richardson
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