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When academic institutions announce bold alliances, as often as not the grand vision fails to materialise. This could hardly be said about the joint venture between the London School of Economics and Political Science and Duke Corporate Education, part of Duke University in Durham, North Carolina.
Set up in 2003 to bring tailored management education to UK companies, the alliance between Enterprise LSE and Duke Corporate Education has been so successful that it has now been expanded to cover companies based throughout Europe, including Russia, and Africa. Although expansion plans were always on the cards, the deal has been agreed ahead of all expectations, says Sir Howard Davies, director of the LSE.
“It’s earlier than we expected, but it [the joint venture business] has grown faster than we expected. Each year it has been way above the business plan.”
Blair Sheppard, chief executive of Duke CE, predicts the joint venture will turn over $25m of business in 2006-2007, compared with $17m in the past financial year. “Next year it [Duke CE Enterprise LSE] will be more than a third of Duke CE’s business. It’s just 25 per cent at the moment.”
Professor Sheppard says the relationship is “really synergistic”. Sir Howard agrees that both sides have benefited: Duke has capitalised on LSE’s strong brand recognition and academic credentials in the UK and has access to the full gamut of LSE faculty to teach on its programmes; LSE has gained from the strong marketing and professional expertise of Duke CE.
Although LSE has a powerful academic reputation, professors had little expertise in applying the knowledge from their programmes to company needs, says Sir Howard. “We didn’t really have the techniques or the skills in going to the client . . . Duke CE’s very professional approach to understanding what the client wants, and then matching it, is the better way round to
The LSE has also benefited by being able to attract international faculty that would otherwise have been wary of British academic wages – the joint venture pays participating faculty individually, topping up basic salaries. Sir Howard believes the deal has enabled LSE to attract four international faculty members over the past year.
Saul Estrin, an economist who will head up LSE’s department of management when it is officially opened on August 1, is moving across the city from London Business School. A privatisation specialist, Prof Estrin worked at the LSE between 1984 and 1991.
This summer will also see economist Luis Garicano move to the LSE from the University of Chicago’s Graduate School of Business, where he is a professor of economics and strategy. Leslie Willcocks, the information technology management specialist, has joined LSE from Warwick Business School and Paul Willman is joining from Oxford’s Saïd business school, where he is director of the doctoral programme. Previously a professor at London Business School, Prof Willman is a specialist in industrial relations, collective bargaining, employee relations, unions and risk management.
All four of these recruits, says Sir Howard, will be “ideally suited” to the corporate education venture, in addition to the 15-20 LSE faculty who already do substantial corporate work. With 45 per cent of LSE faculty originating from outside the UK, many from different countries in Europe, Sir Howard believes the geographical expansion of the deal will allow more of the 70 professors in the department of management to contribute to executive education through the venture.
As well as the fees paid to individual faculty members, the LSE receives an undisclosed royalty payment from the joint venture, which in future could be converted into an equity stake. Sir Howard says the LSE will look favourably on this, although the “notion of an equity stake in a spin-off is something we haven’t done before”. With $25m worth of business developing over the coming year it is something the London school will have difficulty turning down.