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Roohparvar: Speaking Your Mind, Creating Open Relationships Key to Success

Roohparvar: Speaking Your Mind, Creating Open Relationships Key to Success


Written from an interview by Jenny Faubert with Shahrooz Roohparvar, CFO, Milan Institute and Milan Institute of Cosmetology

Leadership. Webster’s New World Dictionary defines it as the ability to lead, command, direct or guide. Peter Drucker, management consultant and author, once said: “Management is doing things right; leadership is doing the right things.”

So what are the right things and how do you lead effectively? That’s what “Career Education Review” hopes to uncover, and much more, in its new series on leaders within the career education sector. Featured throughout the year, the articles will include executives’ ideas about what is happening in the sector, discover why they are successful, provide ideas to help other school leaders, and much more.

What makes Milan Institute and Milan Institute of Cosmetology stand out from other career colleges?

Gary Yasuda didn’t want to see his legacy taken apart by selling his school and his life’s work to a private equity group or a publicly traded larger school group. So in 2012, he turned Milan Institute into an ESOP, an Employee Stock Ownership Plan. Employees become shareholders by working here. As they continue their tenure, they will own more and more shares. This ensures that the people who gain control over Milan in the next generation are those who will continue to adhere to and express Milan’s core values and mission statement.

In addition, creation of the ESOP has definitely reduced employee turnover. It gives employees a sense of belonging.

Would an ESOP be beneficial for other career schools?

It really depends on the school owner and his or her long-term plan. It’s not easy to do an ESOP because you have to stay on top of it and give annual contributions to the plan. Some owners would rather keep that money. I can see more owners trying to sell to private equity groups when the market changes.

What are your most successful programs, and why are they successful?

Our most successful programs are cosmetology, medical assisting and dental assisting. We are successful because Milan Institute has brand recognition within the communities it serves. The employers appreciate our knowledgeable students and our students continue to refer our program to their friends and families because they enjoyed our unique educational experience.

We strive to involve our campuses in local events and charities because we see ourselves as dedicated members of those communities. All of that helps to give us brand recognition, which makes people enjoy coming to our school. Students feel that our school cares about the community and their futures; it’s not a big name that just does everything the same across the board.

At a Glance: Milan Institute and Milan Institute of Cosmetology

  • Milan Institute was established in 1985 by its current President, Gary Yasuda, and his family.
  • Over the years, it evolved from a small stenography and business program school to a large school group in multiple states that offers cosmetology and allied health training.
  • Milan has more than 3,000 students on its 18 campuses, which are located in California, Idaho, Nevada and Texas.
  • Its most popular programs are cosmetology, medical assisting and dental assisting.

Can you provide some examples of how you connect with the local communities?

We hold fundraisers for local community organizations such as police departments, fire departments and libraries. We participate in Chamber of Commerce events. If it’s a location where the school has a massage or salon program, we will also provide free/discounted massages or haircuts to veterans or Wounded Warriors Projects.

Have you implemented any major changes since becoming CFO of Milan, and if so, how has this impacted Milan?

I’ve implemented several cost-saving measures, which included restructuring some departments, making technological improvements, and initiating and administering the self-funded insurance plan for our employees. In the past, we paid Blue Cross Blue Shield premiums for employees, and they would take care of the coverage and pay out the claims. But now we pay those claims directly and save the premium fees. It’s turned out to be quite a savings.

I’ve also stabilized our legal expenditures by working closely with our legal teams. I make sure we’re on track for our goals and anything that may come up. Lastly, I’ve also changed our cash protocols so that our 90/10 is at the best it has been in years.

What do you think makes you a successful leader?

I’m not afraid to speak my mind in the boardroom. Some executives feel that they should only be responsive in the boardroom and speak up if it’s related to their department. But I don’t see it that way. I feel I have an obligation to speak my mind, be blunt and be assertive because most of the time my opinions are based on financial data. It’s black and white, and there is no refuting the numbers. But the real key to being effective when you’re blunt and assertive in the boardroom is to smile while you’re doing it.

Secondly, I like to create an open relationship and discuss everything with my staff. I take the time to get to know them. I take the time to relate to and build a relationship with them. As a result, we have more comfortable communication. We can speak more effectively with one another, rather than the formalities of the ‘50s boss.

How would you describe your management style? Why do you think it works?

I typically give deadlines with tasks. I ask to be informed if a deadline is not going to be met as soon as possible so I can roll up my sleeves and get in the mix and assist. If I need to, I’ll also pull more resources to assist to make the deadline. I may be a leader of the department, but I’m still a member of the team and everyone’s contribution is needed for real success.

What was your biggest challenge when you became CFO, and how did you overcome it?

The biggest challenge was overcoming the mentality of “this is how we’ve always done it.” Sometimes leaders become complacent with their departments and then they’re unable to make changes. So when someone new comes into a department or inherits a department, they will find a system of how things should be done that has been developed over the years.

I find it extremely disturbing when people answer my questions about policies and procedures with “we always did it that way.”

Yet that was the common answer given to me across the board in multiple departments.

However, I know in any organization it’s not uncommon to hear that statement. People become comfortable and complacent with what they’ve always done and they forget and lose sight of why. I immediately sat down with my key managers and worked out a way of disseminating information to the staff and the managers. I began referencing federal and state regulations and accrediting standards in my discussions so I could keep them updated on why a policy and procedure is a particular way. I also keep my staff updated on regulatory changes and trainings, so much so that they actually send me articles before I get into the office in the morning.

My staff members now have a better understanding of why, and that has given them the ability to present solutions to problems, rather than just coming to me with problems. They will come to me and say, “X, Y and Z just occurred at the campus and I suggest that we do A, B and C.” They are developing their management skills, which will allow them to take on more responsibility in the future.

I really believe that learning why in any department, regardless if it is in a school or other business, leads to the success of the department and its functions. It makes employees more independent and less pigeonholed to a written policy and procedure such that they would have to ask for clarification if anything out of the norm ever came up. I’ve been known to tell my employees that we might be a school, but that doesn’t mean the students have to be the only ones learning. We need to stay up-to-date on everything that’s coming or changing.

The career education sector is facing many challenges such as gainful employment, negative media coverage, and so on. How does Milan stay successful in this environment?

While gainful employment is not yet fully implemented, Milan and other schools are all biting their nails in anticipation of how it will unfold. All career schools need to come together to fight this. We must stay actively involved in organizations that are fighting these overly burdensome regulatory nightmares for us. Those organizations include the American Association of Cosmetology Schools (AACS), Career Education Colleges and Universities (CECU), formerly the Association of Private Sector Colleges and Universities (APSCU), the California Association of Private Postsecondary Schools (CAPPS), and others.

We also encourage our staff to speak their minds about the regulations. We try and get them to write, call and email their congressmen and senators about gainful employment. We never tell them what to write and we never force them to write anything. We just say this is something that’s going to affect our sector. You are a shareholder and maybe you want to voice your opinion.

Ultimately, schools need to invest in compliance teams and get a stronger compliance staff now. You can’t have too many people in compliance who will do your internal audits, make sure you’re staying ahead of reports before they come out, and continue to run your internal drafts of numbers so you have a way of seeing which way the wind is going to blow when those regulations do go into effect.

Will cosmetology programs suffer more from gainful employment than other programs?

As you will recall, the gainful employment regulation measures debt to post-graduate earning ratios, and schools that do not meet the standard face losing Title IV funding. Cosmetology, manicuring and esthetics are all great careers for people to go into and become successful. But the downside is you’re banking on their honesty to declare their cash tips and fully declare all of their cash revenue to the IRS because it’s going to go based off Social Security Administration numbers.

We are foreseeing a significant impact on this sector. Any program outside of cosmetology that has graduates as primarily independent contractors is going to have this hurdle, and if it’s not changed it could create the demise of cosmetology programs.

The Bureau of Labor Statistics states these jobs are still on the uptick and growing over the next 5-10 years. But there’s a piece of this gainful employment regulation that’s not going to work; they need to account for independent contractors.

Would you like to see the BLS data used instead of the SSA data? Would that be more helpful for cosmetology?

That would be more helpful. But it would be better to work with those that own beauty salons and have them report how much they’re paying in wages. That would be a much more accurate statement of income rather than relying on peoples’ honesty on their tax returns.

What about negative media locally or nationally? How do you combat it?

We don’t have negative media. But we do have the misfortune of being lumped in with the private postsecondary schools that were doing fraudulent activity, got caught and were shut down. The media has made all of us into villains.

The media, as well as our representatives on Capitol Hill, have lost sight that private post-secondary schools are what gets Americans working.

Many Americans don’t have four years to go to a private or public university to get a degree and then go work. They need to get employed today.

The best way to get employed today is to get a certificate, and get into a vocation that has long-term career aspects for you. Become a medical assistant. Become a dental assistant. Be able to support yourself and your family.

However, the media has not seen private post-secondary schools as the ones that are getting Americans employed. Instead, they like to portray us as villains who take money from the federal government for nothing. They never report on the good that we do or that our placement rates are far better than many four-year colleges or public institutions. The media falls short and it fails to understand that just because you’re a non-profit doesn’t mean that you don’t want a profitable bottom line. The only difference is you don’t pay taxes and you get different breaks than I do on regulations.

What do you see as the future of higher education, and specifically career education, in the next five to 10 years?

I see higher education costs continuing to increase over the next five to 10 years. Public schools have already increased their tuition so much. It’s really unfair to the next generation of students who will be held to those expenses.

But blaming career education schools because fewer people are going to non-profit public institutions doesn’t make sense. We are here to help the remainder of Americans get an education in certifications and programs that can help them find a job quicker. I don’t see anything happening to the career education sector. Our sector is needed for employment.

Ultimately, however, I see another recession coming in the next year or two.

When that recession hits, the people on Capitol Hill will get an immediate reminder on how important career education schools are to get people trained and back in the workforce quicker than waiting for them to get a degree.

Why do you believe another recession is coming?

I look at market indicators – the un-stabilization in oil prices, the halting or reduced usage of fracking to extract more oil and gas, the Silicon Valley and United Kingdom layoffs, and the immediate reduction of growth in China. Some people associate Brexit with the looming U.S. recession, but we were headed that way before Brexit. All these external factors are pointing toward a recession.

I don’t think it’s going to be as great as the mortgage crisis recession that we hit in 2007-2009. I don’t think it’s going to be as bad as the stock market downturn in 2001. But it will be a market correction.

Currently, banks are in a situation where the federally set interest rates aren’t high enough for them to turn money on loans. Banks are withdrawing from making loans as frequently and that means you will get less money in the market. You have a lot of investors pulling out of the market and moving into Treasury notes or going into gold and silver, instead of trying to ride the speculation market with everybody else.

If you could give one tip to other career education leaders in the sector, what would it be?

There is no such thing as over communicating with your team or with anybody, ever.

You should speak regularly with your teams, with your liaisons at the Department of Education, with your liaisons at your accrediting body, and with your liaisons in your state.

If you are in regular communication with everybody, and you have nothing to hide, then you are less likely to receive anyone’s wrath. Be open and honest when you speak. Ask questions and ask for guidance. If you don’t speak up, you give them more reasons to come look at you.

Shahrooz Roohparvar

Shahrooz Roohparvar has a bachelor’s degree in business management economics (accounting) from the University of California, Santa Cruz, and a dual concentration master’s of business administration degree in finance and supply management from the University of La Verne in La Verne, California. He has 15 years accounting experience, including eight years in the private postsecondary/vocational industry.

Roohparvar started in the career education field in 2009 when he was hired as the Corporate Controller for Unitek College, an allied health training school in the San Francisco Bay area. Since 2013, he has worked as the Chief Financial Officer of Milan Institute and Milan Institute of Cosmetology.

Contact Information: Shahrooz Roohparvar, MBA // Chief Financial Officer // Milan Institute and Milan Institute of Cosmetology // 559-738-7777 // SRoohparvar@milaninstitute.edu



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