Duke Ventures Far From Campus to Serve Clients

    Five years ago, the university spun off its non-degree, custom executive education program to a wholly owned for-profit company, Duke Corporate Education Inc., creating a unique approach to executive education. Headquartered in a converted tobacco barn behind a baseball field in Durham, North Carolina, a dozen blocks from campus, Duke CE, as it is known, has been mounting custom executive education programs for corporations since its inception in July 2000. Duke CE draws on its own staff of about 80, along with professors from Duke and other universities and private consultants. It assembled a client list ranging from Bank of America to British Airways.

    Duke University owns 85 percent of the company’s stock; the rest is owned by Duke CE staff members. When the new entity spun off, the university was doing about $8 million worth of business each year in custom executive education. Its latest annual sales figure: $42 million. The long-term goal is to increase annual sales to $250 million.

    Few of its programs actually take place in Durham, and Duke professors account for only about 40 percent of those who teach its courses. Its far-flung contracting network includes more than 1,200 professors and professionals around the globe who can mount training seminars or strategic gatherings at corporate meeting rooms or rented conference centers from Asia to North America. Since its launch, Duke CE has delivered programs in 37 countries.

    "Being part of a university is a great thing," says David Miller, Duke CE vice president of business development. "But there are also some liabilities. One of the liabilities is that university faculty members don’t have the incentive to do high-quality custom executive education. If you go to a faculty member and say, ‘Come work with us for a couple of days to really understand this issue and this company,’ more often than not the answer is, ‘No, I do not want to do that. My job is to do research and teaching. If I don’t, I don’t get tenure. Why would I invest five or six days for something that doesn’t enhance my career?’ "

    Miller says Duke CE tries to track down professors who are interested in and capable of handling custom education and contract with them for specific programs.

    In developing programs, Duke CE strives for results that directly address specific company needs. For example, a training program was designed for top auditors at a major accounting firm that was trying to shake up its systems in response to the accounting scandals at Enron and WorldCom.

    Duke CE’s solution was a series of simulations designed to broaden the way the company’s auditors think about issues and probe for answers. In one simulation, Duke CE hired actors and set up a mock hospital room complete with patients. CPAs donned white coats and tried to diagnose patients, with a real doctor serving as a consultant to help.

    The idea wasn’t to teach accountants how to be doctors but to shake up their approach by encouraging them to ask more questions, even stupid questions, in their quest for answers.

    "If you take someone out of their area of expertise and into an area where they know nothing, they are freed up to ask naïve questions," Miller says. "For someone to ask a silly question in an auditing case would demonstrate that they don’t know what they are talking about.

    "But for an auditor to ask a silly question as a doctor is OK because they are not doctors. Who cares if they look silly? We got huge results in terms of how they approach their practices."

    If Duke CE continues to grow, it might consider changing its ownership structure, including a public stock offering, Miller says. For the moment, its goal is simply to sell more programs.

    "Are we the wave of the future? I don’t know," Miller says. "I do know that we have been successful."