Sheppard. What happened? FC probes the sudden departure of the Dean

Please read our essay on Dean Sheppard, and then scroll down for another important story: White female freshman. Black man from Durham. Duke faces litigation over racially charged rape.

Posted at 10 PM Wednesday

✔✔✔✔ Did he really quit? Or did something happen in seven weeks time that cost Blair Sheppard his job as dean of the Fuqua Business School? Seven weeks: from the start of June when he looked confident and secure to a press release in late July announcing his imminent departure.

And if he got canned, who instigated it? Peter the Provost? President Brodhead? Or did orders came from the Trustees?

Did Rick Wagoner, Trustee chair since July 1, come to a quick decision? Was the elusive David Rubenstein, chair of the China Committee, involved? The Wagoner or Rubenstein scenario would be very ominous for Peter or Brodhead, supplanting their judgment on Duke's greatest expansion since James B. Duke got Trinity College to change its name to his.

And was there any special factor that dictated Sheppard had to leave forthwith. Only seven days notice.

✔ Early in June, there was no signal at all that he would be gone. One Loyal Reader has written to us about a meeting where Sheppard and other administrators talked confidentially, confidently, specifically about the Kunshan timetable, still "on track" for classes for degree programs to begin in August, 2012, despite the Fuqua faculty's June 1 meeting rejecting all proposals.

Shortly before that, Sheppard sat with President Brodhead at an alumni meeting in San Francisco -- one of the structured "Duke Idea" presentations designed to channel the evening away from any alum's asking pesky questions. The President and the Dean cooed over each other, though part of Brodhead's introduction was just plain inaccurate.

Brodhead lavishly praised Shep for forming Duke Corporate Education (DCE) in July, 2000, a wholly owned subsidiary of Fuqua which produces tailor-made non-degree learning experiences for corporations at hefty prices. Prices enhanced by its standing as the #1 packager of these events in the world.

Why Sheppard, Brodhead noted, even had given up tenure as a Fuqua professor to start this enterprise! (We have no information as to whether he regained tenure when he left full-time work at DCE to become Fuqua's dean in July, 2007; Sheppard remained chair of DCE's board of directors while dean.)

Brodhead cited Shep's success with DCE -- a profit-making venture -- never mind this news was quite out of date.

For two years, DCE has been in the red, the bleeding going from $2 million to $5.8 million in the last available annual reports --- statistics that Brodhead damn well knew about. And in case you want to dismiss this as a product of the economic misery, the down-trend was evident earlier than the depression.

Brodhead also skipped over the turmoil for the staff at DCE. For the lucky ones who remained, there were steep salary cuts. Of course salaries had been out of whack, with Greg Marchi, the chief salesman, earning $672,500 in one year but only $509,405 the next. (His background is in advertising, most notably hawking for Philip Morris, Kellogg's and Sprint.) The executive director after musical chairs, Robert Reinheimer, had a similar battle to change his style of living from $529,084 a year to $425,895. Duke's Arts and Sciences professors should have such problems!

Then there was Brodhead's three continent summer-time spree. Despite repeated requests, Brodhead personally and his PR staff have refused to tell us who accompanied him to Europe, Asia and Africa. Yes, only at Duke in the Brodhead years, could a good will trip be done in secret.

But a Deputy Fact Checker confirms Sheppard was in Kunshan, standing near Brodhead and Cynthia in the obligatory picture, yellow construction hats and big smiles. And even though the trip failed to bring home any accomplishment (the last news release was three days before Brodhead left) there was no hint of danger that the ax would fall.

During the past few weeks Sheppard, as usual, was playing the role of robust leader, big promises, never missing a step despite the June 1 rebuke shared with Brodhead and Peter the Provost.

He learned nothing from the rebuke, for there was no new consultation, no collegiality with the faculty; in fact our sources said Sheppard spoke to very few as he faced the task of trying to recast the degree proposals to win approval. Some suggest Sheppard was scheming to score an end-run around the faculty, having Duke Corporate Education run some programs so they would not need approval, thus saving face if Kunshan needed yet another deadline. Significantly, when Sheppard and the interim dean Bill Boulding ventured out after announcement that the King was dead, they went to the offices of DCE.

✔ As Loyal Readers realize, this discussion does not answer the initial questions: quit or canned? It leaves a mystery, whatever occurred in seven weeks time to cause this proud man to say -- at least according to the press release, which may or may not have been his words -- that he was "not the person" to carry Fuqua forward. Epiphany? Not likely.

And what happened that caused Sheppard to say -- at least in the press release -- that now there must be "consolidation" of the expansion that he himself wrought, a word that everyone interprets to mean trimming of the sails, calming down after letting international winds blow Duke around the globe. Sheppard was after all the turbine behind grandiose expansion plans in no less than ten cities simultaneously -- led by Kunshan, the first full research university in a chain that Duke would plant, like McDonalds, around the world.

✔ As FC recently outlined, the press release announcing Sheppard's decision not to accept a second term as Dean is even more unbelievable when you consider:

A) Shep's first term still had a year to run.

B) He participated in the process for evaluation for a second term.

C) Last April 19th, Peter the Provost announced Shep had been reappointed to five more years starting July 1, 2012. Who knew, as the departure press release now claimed, that this was merely extending an offer to Sheppard, that he was going to think it over.

The only certainty here is that Sheppard leaves behind a mound of mess.

Dean Boulding must formulate new proposals for degrees in Kunshan, even though a faculty report seems to make this an impossibility. The finances simply do not add up:

-- where Sheppard once said there was great demand for the biggest degree program planned for Kunshan -- master of management studies -- three outside consultants said no.

-- where the dean once said employers would help pay the freight, the consultants found differently. In fact, not one company would pay a cent.

-- where the idea of Duke in China teaching Chinese students in English was the big lure, the consultants found Chinese would rather go abroad.

-- and someone pointed out that the highest tuition the Chinese regime had ever approved (this is under state control, no supply and demand calculations) was only a fraction of what Sheppard was counting on.

-- and someone pointed out that Sheppard's plans called for only 25 percent of the instruction to be by Fuqua faculty from Durham, a cheap reliance on adjuncts (freelancers) that endangered quality.

-- and after Brodhead -- his back to the wall -- identified the big benefit to Duke-Durham would be the numbers of faculty gaining exposure to China and returning to enliven the campus, the faculty pointed out that the numbers involved were not great -- and virtually no one wanted to go to China anyway.

✔ And so Dean Boulding inherits all this and more. In this essay FC has not gotten into problems with the premier offering at Fuqua -- the Cross Continent MBA. This $140,000 plus degree requires only 70 days of instruction total, plus "distance learning" which my late dear father called homework. The gimmick is shipping degree candidates to move between five global cities (plus Durham) and somehow absorb the business culture in a week at each location. Shep had to concede that students -- and their employers paying the big bucks -- were totally dissatisfied, and that on more than one occasion Boulding -- the point man -- had gotten lambasted. Some corrective steps have been taken.

So FC is sure Boulding realizes he needs to have extensive time-consuming consultation with his faculty before any strategic moves, yet so far as Kunshan is concerned, he is still bound by an August, 2012 start of classes.

Will Brodhead bail him out on the date? Don't count on it; our President has his own sinking boat. The last thing Dick needs to acknowledge is another failure in Kunshan, moving the date again.

Apart from Kunshan and apart from DCE, Fuqua's financial situation will deteriorate this year. While numbers are not available and given the paranoia that abounds in the Brodhead years probably won't be, faculty reports reveal a closely held secret: that in all of Fuqua's offerings, enrollment will be down this fall.

So Sheppard -- again according to the news release -- begins fund-raising and development duties for Kunshan. There was never any indication such a position was available. And most notably, the news release gave the job no title.

At least Brodhead could have added him to the roster of his "special advisers," giving Sheppard a crutch as the door slammed shut.

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