An interview with Blair Sheppard, Dean of the Fuqua Business School and Chairman of Duke CE, Duke University.

There are few more international events than the World Cup. The great exception to this global passion is the United States where football (or soccer) remains something of a minority sport. So when IEDP spoke recently to Blair Sheppard, Dean of Fuqua Business School and Chairman of Duke CE it was entirely indicative of Duke’s global outlook that he was about to watch the US team’s World Cup group match against Algeria.

Duke University is currently investing in an unparalleled international expansion program and Fuqua with Duke Corporate Education (CE) are integral elements to this process - although both bring different but vital qualities to the development project according to Sheppard.

Blair Sheppard has been at the forefront of executive education since the sector started its mainstream growth two decades ago. In the early 1990’s he joined Duke University’s Fuqua Business School as Associate Dean and Director of Executive Education and steered the school’s expansion for the rest of the decade. In 2000 he oversaw the bold strategic decision to carve-off the custom side of the business to the wholly-owned but entirely separate business, Duke CE.

That was a radical move at the time but one that has been clearly vindicated today. Duke CE has taken pole position for custom education in the prestigious FT rankings every year since 2003. For Fuqua’s exec-ed department losing the fast-growth custom program element of its business to Duke CE limited its opportunities to grow, as open programs were shrinking in relative terms each year and being seen as the less exciting business to be in. If the FT rankings are a measure of success, which is questionable, Fuqua’s position has suffered since then slipping off the open program chart entirely this year, although this was due to low turnover rather than any suggestion of loss of quality.

However, Blair Sheppard is clear that Duke University is playing a longer game than just managing media rankings. Duke University saw Sheppard return to Fuqua as dean in 2007, at the same time as the Medical School, Nicholas Environment School and Pratt Engineering School were all acquiring new deans too.  While each school retains its core academic purpose and integrity there is much greater interaction between the different schools today and Duke University is looking to extend its brand globally through the creation of three new campuses in China, India and Russia as well as a centre in the Gulf.

As has been well documented, executive education has had a difficult two years, but Sheppard is resolutely up-beat at the current and future demand from the emerging economies. He sees that there are two strong trends for demand for executive development expertise currently, both focusing on how to do business in markets where they have not done business before. Firstly there are the companies headquartered in BRIC economies and looking to build their business elsewhere and then those N American and European organisations looking to grow their activities in the new economies.  Either way a BRIC presence is being seen by Duke as the critical foundation for future growth.

Sheppard sees within these areas there are two particular drivers. Firstly the scale of growth in these markets can be so fast that it is a real challenge to find people who have the ability to manage the growth – so enabling businesses to keep pace with the growth is a real opportunity. The second driver is that there are significant professional development needs, where executives are looking for functional skill improvement in their chosen sectors.  As with all professional development programs the opportunity to award certifications and degrees as part of the exec-ed process is seen as “entirely desirable” by the emerging economies participants.  “Take financial services in Shanghai, they have to have the same professional service capability as Hong Kong and that is a huge business opportunity for the schools.  There is a huge need for just generic professional development, just because of the scale of growth in that market. It doesn’t make sense for a firm to say “all we’re trying to do is to get professional accreditation so we’ll take that on alone”.” 

Additionally the great opportunity with these economies is that they frequently develop their expertise, whether by nature or nurture, in clusters such as financial services in Shanghai or IT enabled services in Bangalore.  The clusters create a resurgence of demand for open programs and not just custom demand and Fuqua is looking to supply that demand across the developing regions. Sheppard sees the situation as a lot like how N America and Europe were fifty years ago where clusters were just evolving and there was a large scale need for professional manager capability.

One half of the business challenge for the business school is identifying where these clusters are appearing and locating accessibly to them, the other half is to stay ahead of the managerial growth demands in Asia.  Sheppard’s view is that “Just because of the sheer success of the economy there is a management dearth. And this is not by cluster but the whole region, and it is the same in Latin America and I suspect it will be the same in Africa pretty soon. And so a piece of it is to offer very high-quality, regional, customised, open programs plus the custom needs of the successful firms.”

For Fuqua having Duke CE as a sister entity is a real competitive advantage with it building relationships globally. While Duke CE was establishing itself this was not beneficial but with it now being both successful and completely mature there is no threat in it supporting Fuqua. Fuqua is now making the global investment in physical plant which Duke CE needs overseas plus faculty capacity – although Duke CE draws faculty from all over it is helpful to have faculty that they know well. Duke CE supports Fuqua with the program design and execution capability that it is renowned for. He has described Duke CE’s relationship to Fuqua as “what a hospital is to a medical school – a domain of clinical practice.” However Duke CE does not have the “steady state program offerings that can support capital spend that Fuqua does. So there is a symbiosis between the two.”

Fuqua invented the global MBA and continues to invest heavily in their global capacity – and this is a Duke University wide investment not just a Fuqua one. The Medical School is already established in Singapore for instance. “Because we are co-investing as an entire university we can put on programs that are incredibly topical by drawing on relevant expertise from all of the specific schools within Duke University.” Fuqua has identified the ability to draw on expertise from across the university’s breadth as a major advantage particularly over the commercial executive development consultants and standalone business schools, which he noted were amongst the leading European competitor institutions!

This new global expansion has been organised by the new set of deans. Sheppard admits they have been quite quiet about it up until now as “before you say you are global you had better have your physical plan in place; before you say you are putting joint programs on you better have delivered some. So we have been very, very quiet, but we have been quite intentional about it. It is unusual for a university to say we are going to simultaneously locate in five locations, and to do it across the university and not just one school is highly unusual. But our sense is that is what the world needs.”

Innovation and creativity are high on corporate wish lists currently – Sheppard says creativity and innovation are systemic and not structural issues. It is imperative in his view that senior teams have to be closely involved with managing their systemic issues, those that encourage or mitigate against innovation, and any attempt to run programs without them would be pointless. He argues this requires two kinds of programmatic thrust, one working at a very senior level and one working at the level where you want innovation; and those are clearly best done as custom programs. He says this kind of intervention represents a fifth of Duke CE’s business today.

Custom programs are especially good in any circumstances where there is a clear differentiation being created on the culture change requirement and open is good in circumstances where there is a fairly predictable management development need, and where you have a strong need for professional development. The other advantage of open is the networking advantage.

The reason that custom programs grew so much in the last decade is that firms were trying to use them as a way of building either distinctive capability or changing culture, he believes “that those still remain as needs, so custom will continue to succeed and grow. But I think you are finding pockets of need for what I have described as requisites for open programs.”

Blair Sheppard has clearly immersed himself in the make-up and needs of developing regions and observes that a defining characteristic of developing economies is their tremendous variability – “that is what makes an economy developing.” Within them there are many firms that are trying to complete globally who have a very sophisticated view of the managerial and professional needs. “You are going to see a lot of Crotonvilles being built” he says to accommodate this demand from within.

Building on this Fuqua sees a role in advising companies on how to do professional management development in developing economies as that is the first part of their needs, “we have to learn what they are doing and then customise it. We have to have that capability. I think consultancy roles offer an opportunity in building a relationship and building a model in a way that allows you to deliver really well when you get your shot at doing so. You have to be honest and admit when you do not have the best solution, but that is part of the relationship.”

Looking at the coming years as a whole Sheppard thinks Fuqua’s great challenge is to “re-build scale.”  By splitting Duke CE out from Fuqua he thinks they have created the greatest clinical asset in the world and the most productive research asset, as the rankings indicate. “We have to build the scale of the open business behind that. We have to really take advantage of our global footprint.” That footprint he sees as their great opportunity combined with linking the business school offering with the rest of the university.