Duke - Nov - Dec 2009 https://alumni.duke.edu/magazine/issue/nov-dec-2009 en Hothouse Inc. https://alumni.duke.edu/magazine/articles/hothouse-inc <div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>A few days into his new position testing a cholesterol drug for a San Francisco biotech company, Alex Andon '06 realized that the job stank. It required him to liquefy cholesterol-laced human feces and parcel out the mix from beneath a hood that never seemed to keep out the smell. One day, a pipette he was using recoiled and hurtled a brown glob onto his jacket, inches from his mouth. "Almost the entire time, I wanted to get out of there," he says. Two years later, Andon was almost grateful when he was laid off in the midst of the recession—at least until he spent a month looking for new work: "The jobs I was finding were even worse."</p><p>Andon's parents had saved enough money to put him through business school, but he pitched them a squishier plan. A double major in biology and environmental sciences, he had been enthralled by a jellyfish exhibit he'd seen at the New York Aquarium and surprised that the ethereal creatures weren't available at pet stores. "The first thing that came to my mind was that these were like living lava lamps," Andon says. Believing they could become a wildly popular decorative trend (and pet) if someone could figure out an easy way to keep them in captivity, Andon gave up his job search in May 2008 and used his grad-school funds to form Jellyfish Art, one of the world's first jellyfish aquarium companies. Making the decision "was a huge relief," he says. "This is by far the best opportunity that I had."</p><p>A typical roommate might have objected to the leaky aquariums, inflatable boat, and heaps of pipes and filters that began clogging Andon's San Francisco apartment, but to roomie Andrew Kitchell '06, they were inspiring. Kitchell had backpacked through Asia before chafing against a rote paralegal job at a San Francisco law firm; Andon inspired him to quit and use his foreign travel experience to found 30 Words, a business that produces pocket-sized language guides containing only a few carefully chosen words and laid out in a way that makes basic conversation easy. "When you see somebody starting their own company," Kitchell says, "it gives you the idea that you can do it yourself, too."</p><p>Kitchell raised the seed money for 30 Words by selling his car to his sister, Erin Kitchell '03. She'd just taken a buyout from her investment-banking job at Wachovia Securities where she'd packaged risky mortgages into collaterized debt obligations—one of the sparks that had set off the financial crisis. "I think I probably would have been fired if I hadn't said, 'Let me go,' " she observes. In August 2008, she moved to San Francisco and soon decided that her best job opportunity was helping her brother launch 30 Words.</p><p>Unable to find work, increasing numbers of the unemployed are creating it for themselves. A July report from the Small Business Administration found that the ranks of the self-employed jumped more than 8 percent last year—four times the typical growth rate. Administrators notice the same trend at Duke. "Setting up an entrepreneurial firm can be an option that a student or young alum chooses because they are very interested in becoming an entrepreneur or as a learning or survival method," says Bill Wright-Swadel, executive director of the Duke Career Center. "And we are seeing them thinking about entrepreneurship in all of those ways. Frankly, more than we have seen before."</p><p>Indeed, many seasoned entrepreneurs say that a slow economy can be a great time to start a business. It may be no accident that Google and Microsoft began in the midst of market downturns: Scarce funding means fewer firms chasing the same idea and more companies looking for products that can save them money. "Every business in the country is looking for ways to do more with less," says Reid Lewis '84, CEO of the software company Group Logic. "And usually that is what entrepreneurs do."</p><p>As the recession forges more young business entrepreneurs, Duke is launching a raft of new initiatives aimed at supporting and encouraging them. Howie Rhee, managing director of the four-year-old Center for Entrepreneurship and Innovation (CEI) at the Fuqua School of Business, hopes the efforts will seed the campus with the kind of contagious entrepreneurial spirit that Andon and his housemates have created in San Francisco. "That's what happens at MIT and Stanford that is missing at Duke," he says. "It's that ingredient that I'm trying to get to."</p><p>The entrepreneurial spirit at Andon's and Kitchell's apartment is contagious. In May, eight months after Breck Yunits '07 and his friend Ben Zulauf, a graduate of Georgetown University, moved in, Yunits quit his online advertising job, and Zulauf gave up a position with Google's DoubleClick division to cofound Jobpic.com, a website that allows contract workers such as lawyers and Web developers to sell their services online. The pair began with $15,000 in seed money from Y-Combinator, a Silicon Valley business incubator that has introduced them to people like Twitter cofounder Jack Dorsey and executives at the leading venture-capital fund Sequoia Capital.</p><p>With four of five roommates in the apartment now self-employed (the fifth, Tom Price '06, is auctioning off his services as French tutor on Jobpic as he applies for tech jobs), friends dub the flat the "Entrepreneur House." But the catchy name belies the harsh realities of starting a business just out of college. The housemates live in cramped rooms with stained carpets and salvaged couches and subsist on burritos and bruised discount produce from the nearby corner mart. "We've had people hold down traditional jobs here," Kitchell notes, "but I don't know if a banker would want to live here."</p><p>Nor would most bankers put up with so much work under such stressful conditions. In late 2008, Andon was logging 120-hour weeks after he received his first order for a jellyfish tank, a $25,000 behemoth commissioned by a new Vietnamese restaurant being built in Seattle. Under intense pressure to finish the tank before the restaurant opened, he drove twenty-three hours through a blizzard to the construction site and spent five days installing it, sleeping only a few hours each night atop the tank's foam packing. "I've never worked that hard in my life," he says.</p><p>Like many recent Duke graduates, Andon and friends take it almost on faith that the recession will weed out poorly run businesses and ultimately reward them for their hard work. "It's Warren Buffett who says, 'When the tide goes out, you can see who's swimming naked,' " Andon observes, "and I think about that a lot. I like the extra challenge of trying to start a business in a recession."</p><div class="media-header top"><div class="caption caption-center"><div class="caption-width-container" style="width: 580px;"><div class="caption-inner"><a href="images/ou081202chodikoadam34-grande.jpg"><img src="/issues/111209/images/111209-lg-img0861rev.jpg" alt="Eat, plan, lounge: Kitchell and Andon occupy sofa space while talking with Yunits and Zulauf." width="580" height="240" border="0" /></a><div class="media-h-caption">Eat, plan, lounge: Kitchell and Andon occupy sofa space while talking with Yunits and Zulauf. Peter DaSilva<p class="caption-text"><a href="images/ou081202chodikoadam34-grande.jpg"></a><div class="media-h-caption">Eat, plan, lounge: Kitchell and Andon occupy sofa space while talking with Yunits and Zulauf. Peter DaSilva</p></div></div></div></div></div><p>In 2007, Tom Perkins, cofounder of the famed Silicon Valley venture-capital firm Kleiner Perkins Caufield & Byers, spoke at Duke at the invitation of the computer-science department. Afterward, someone in the crowd asked Perkins what he saw as the main difference between Research Triangle Park and Silicon Valley. The most important difference, Perkins replied, wasn't money or resources but psychology: People in Silicon Valley were more often willing to quit well-paying jobs in the risky pursuit of a dream.</p><p>Given enough time, Rhee of Fuqua's CEI believed he could change that. Two months later, his center joined with Duke's similarly named Center for Entrepreneurship and Research Commercialization (CERC) to host Entrepreneurship Week, a series of talks by prominent alumni from the business world. In 2008, the two centers expanded on the idea to create the Entrepreneurship Education Series, a three-month-long string of lectures, competitions and how-to courses like the One Day Startup, a Saturday cram session in entrepreneurship that was attended by seventy students. "We recognize that things haven't been great" for entrepreneurship on campus, Rhee concedes. But he adds, "I think we have made a lot of progress in a short amount of time."</p><p>Much of the new entrepreneurial focus comes from students. The Duke Entrepreneur, a club created in 2006 for undergraduates interested in start-ups, included Yunits, before he moved into the San Francisco Entrepreneur House. Several club members now run their own businesses. Former member Nick Alexander '09 lived with Yuntis and Andon at the Entrepreneur House for two weeks before moving south to Silicon Valley to run bluetunes.net, a website that allows users to upload and access their music library through the Internet. The club, and later the house, provided him with valuable support, he says. "It's positive reinforcement to see somebody actually doing really well."</p><div class="media-header top"><div class="caption caption-center"><div class="caption-width-container" style="width: 580px;"><div class="caption-inner"><a href="images/ou081202chodikoadam34-grande.jpg"><img src="/issues/111209/images/111209-lg-img0878rev.jpg" alt="Old-fashioned advertising: Zulauf, left, and Yunits post Jobpic flyers at San Francisco shops to publicize" width="580" height="240" border="0" /></a><div class="media-h-caption">Old-fashioned advertising: Zulauf, left, and Yunits post Jobpic flyers at San Francisco shops to publicize their online company. Peter DaSilva<p class="caption-text"><a href="images/ou081202chodikoadam34-grande.jpg"></a><div class="media-h-caption">Old-fashioned advertising: Zulauf, left, and Yunits post Jobpic flyers at San Francisco shops to publicize their online company. Peter DaSilva</p></div></div></div></div></div><p>The new campus efforts are spurring more undergraduate interest in the eleven-year-old Duke Start-Up Challenge, an annual competition among student business plans for prize money. "It's a great setting to learn more about what it takes to start a business," says Larry Boyd, managing director of CERC. Yunits entered the challenge as a senior with his quickduke.com, a popular campus-based home page that automatically displays a student's most-visited websites; it went online two years before Google Chrome offered a similar option.</p><p>Duke increasingly recognizes that starting a business on campus can be an intrinsically valuable educational experience. In the fall of 2008, Fuqua began offering a three-semester course that allows graduates and undergraduates to earn credit for creating and running a start-up while receiving theoretical and nuts-and-bolts advice. One business that came out of the class and later won the Start-Up Challenge, Entogenetics, uses genetically engineered silkworms to produce spider silk that it believes will be strong and light enough to replace Kevlar in bulletproof vests; as of this fall, Entogenetics had raised $300,000, mostly from private investors.</p><p>Of course, commercial success isn't always the point. "Most entrepreneurs' first ventures fail," says CERC director Barry Myers, "and so what we try to do is let that first venture happen while you are on campus. In which case, if it's in a class and you learn a lot, you may still get an A+ doing it."</p><p>You also may get free office space. Last winter, Duke converted a portion of the Teer Engineering Building into DUHatch, a "hatchery" that houses five student ventures. They currently include Cerene Biomedics, which is developing a medical implant to prevent epileptic seizures, and the Green Cooling Group, which has invented a refrigeration technology that it says is 120 times more efficient than conventional methods. Businesses in the hatchery can qualify for stipends, mentoring, and help landing venture capital.  "It finally gives us a place to pull everything together," says Boyd, who manages the facility. "You're probably seeing the same sort of vibe coming out of the group in San Francisco."</p><p>By last spring, the Entrepreneur House was improbably becoming an inspiration for a whole new generation of Dukies. In March, its companies were prominently featured in a <span class="pubtitle">New York Times</span> article on how "recession has become the mother of invention." Two months later, Duke President Richard H. Brodhead made Andon the centerpiece of his 2009 baccalaureate address, "Advancing in a Recession," arguing that the economy will only recover in the long run if it's reanimated by the innovative spirit of start-ups such as Jellyfish Art. "It's not the nature of opportunities to just sit there waiting to be seized," Brodhead told the Class of 2009. "Opportunities exist only to the extent that they are created: They come into being when someone visualizes an opening in the status quo and sparks an idea of how to fill it.</p><p style="color: #000000; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 10px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: auto; word-spacing: 0px; -webkit-text-stroke-width: 0px; background-color: #ffffff;">On a warm Sunday afternoon in June, along one of the grungier blocks in San Francisco's gentrifying Mission District, the roommates of the Entrepreneur House sat in their living room listening to the outside sounds of Norteño music and the occasional burst of firecrackers—the familiar workings of an impromptu sidewalk fiesta. Despite the noise and the exposed stuffing in the den's couches, a young traveler was paying them $40 for the privilege of sleeping there that night. They'd found him through Air B&B, a start-up founded by friends that connects would-be couch surfers with would-be crash pads. It was a handy way to help pay the bills. "We are as close to being a hostel as you can possibly be," Zulauf says. Erin Kitchell adds: "On most weekends, every one of these couches is taken."</p><div class="media-header top"><div class="caption caption-center"><div class="caption-width-container" style="width: 580px;"><div class="caption-inner"><a href="images/ou081202chodikoadam34-grande.jpg"><img src="/issues/111209/images/111209-lg-entrepreneurshipduhatch.jpg" alt="DUHatch: campus incubator for innovation." width="580" height="240" border="0" /></a><div class="media-h-caption">DUHatch: campus incubator for innovation. Les Todd<p class="caption-text"><a href="images/ou081202chodikoadam34-grande.jpg"></a><div class="media-h-caption">DUHatch: campus incubator for innovation. Les Todd</p></div></div></div></div></div><p>Housing complete strangers isn't the only way the members of the Entrepreneur House like to gamble. Before Yunits launched Jobpic and Alexander launched Bluetunes, the pair and another Duke graduate spent three months running Seemewin.com, a website that documented them scratching off $30,000 worth of lottery tickets. They hoped advertising on the site would more than make up for what they didn't win. "It was a really fun failed start-up," Yunits says. In another case, a classmate and friend of Yunits, Dylan Smith '08, used his dorm-room poker winnings to finance Box.net, a file-sharing website that now employs forty-seven people in Palo Alto and has raised $13 million from respected investors such as Mark Cuban and the venture-capital firm Draper Fisher Jurvetson.</p><p>On the evening a reporter visits the house, Kitchell serves a dinner of "drunken chicken" and slightly charred potatoes as the housemates, who often cook and eat together to save money, casually bat around new start-up ideas. They range from tofu smoothies ("Nice and creamy") to an airline that would allow you to sell your right to use the armrest ("If eight hours of misery can save me $400, to me that's fine"). They are only kidding—perhaps. An incoming freshman at the University of California at Berkeley named James Russell, was there to help with a similarly wacky start-up idea that Andon was actually pursuing: an algae farm atop the house's roof that would supply feed to pet stores. Before moving to Berkeley, Russell had run a similar business in Michigan, where his clients also included health-food nuts who drank the stuff. "I say, 'Not for human consumption' " on the packaging, he says. "They drink it anyway."</p><div class="media-header top"><div class="caption caption-center"><div class="caption-width-container" style="width: 580px;"><div class="caption-inner"><a href="images/ou081202chodikoadam34-grande.jpg"><img src="/issues/111209/images/111209-lg-img0802rev.jpg" alt="Endless iterations: " width="580" height="240" border="0" /></a><div class="media-h-caption">Endless iterations: Andrew and Erin Kitchell work on newest version of pocket guides, checking translations and tweaking layouts. Peter DaSilva<p class="caption-text"><a href="images/ou081202chodikoadam34-grande.jpg"></a><div class="media-h-caption">Endless iterations: Andrew and Erin Kitchell work on newest version of pocket guides, checking translations and tweaking layouts. Peter DaSilva</p></div></div></div></div></div><p>Of course, starting a new business is often tougher than just identifying a quirky niche. That June, jellyfish were repeatedly getting stuck in the filter of the $25,000 tank that Andon had installed in Seattle. Jobpic.com's latest iteration, an auction site for contract work, was failing to catch on. And 30 Words had recently printed 8,600 Spanish language guides but the Kitchells hadn't completely figured out how it would sell them; a loan from their dad would fund just one more print run.</p><p>Though many great companies will be started during the capital-scarce recession, an unusually large number will also fail, says Rhee of CEI. "If you're working on something with a couple of buddies of yours for months, but you're just scraping by, eating ramen noodles all the time," he says, "at some point you are going to run out of momentum—unless you get the capital you need to start feeling like it's paying off."</p><p>Help sustaining that momentum is a major benefit of living together, the housemates say. In addition to acting as sounding boards for each others' ideas and sharing what they've learned about boosting marketing and Web traffic, the young entrepreneurs reassure each other that they aren't crazy. "When I first started, I was the only one running a business here. And I'd be home alone, and it was horribly depressing," Andon says. "But now there's like five of us here every day. We go out to lunch together. It's a lot better."</p><p>Duke professors and alumni want to replicate some of the Entrepreneur House's synergies. In 2008, Reid of Group Logic and start-up consultant Michael Cann Jr. '95 created the Duke Global Entrepreneurship Network (DukeGEN), a networking and support group that has grown to 1,200 alumni. Last summer, the group held happy hours in eight cities. And Rhee and Larry Moneta, Duke's vice president for Student Affairs, have talked about creating a similar "Start-Up House" on the Duke campus. "In my own experience, starting a company can be very, very isolating," Rhee says. "It just makes sense to me that the Entrepreneur House would help."</p><p>By early July, the Seattle restaurant's jellyfish tank was still sucking the creatures into its filter. Andon decided to drive there. Unable to tinker with it during dining hours, he worked from 9 p.m. on a Thursday straight through to 11 a.m. Friday, and another six hours late Sunday. He finally solved the problem by installing a new mesh deflection screen. "Alex is really good at responding and making sure his product is well taken care of," says restaurant owner Tam Nguyen, who believes the tank was easily worth the price. "Kids to adults, they all love the jellyfish."</p><p>As the summer wore on, prospects for the young entrepreneurs seemed increasingly positive. Fourteen book stores and a major online retailer, Travelsmith, had begun carrying 30 Words' waterproof, tear-proof language guides. In early August, Global Citizen Year, a study abroad program, purchased guides for use in Latin America and Wolof-speaking Senegal. "While we provide intensive language training," Global Citizen consultant Deborah Agrin told me, "we see these guides as quick and accessible ways for them to cover the basics."</p><p>In September, Yunits and Zulauf got rid of Jobpic's auction function, which hadn't attracted many reasonable bids, and retooled the site. Now, contractors can post ads for their services, and buyers can hire and pay them online. Jobpic ensures that the money isn't released until the work is completed. "We want to make ordering services as simple as ordering goods on Amazon.com," Yunits says, adding that about ten venture capitalists and angel investors are considering funding the concept.</p><p>Late in the summer, Andon is working through a shipment of 100 live jellyfish from Japan. He opens a box and pulls out a clear bag holding three Blue Jellies, pulsing orbs of light blue and deep purple with mottled, brain-like tentacles. They are small enough to live in a popular new desktop aquarium that Andon had begun selling for $250.</p><p>His business, he says, has finally turned a profit; he's received more than a dozen orders for the tanks and jellyfish and is working long hours to keep the rest of his stock alive. "It's pretty stressful working this much," he says "but there's so much opportunity, and things are going so well that I just can't help myself."</p><p><em><span class="byline">Harkinson '99 is a staff writer for </span>Mother Jones<span class="byline">.</span></em></p> </div></div></div> <h3 class="field-label"> Published </h3> <span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2009-11-30T00:00:00-05:00">Monday, November 30, 2009</span><section class="field field-name-field-main-image field-type-image field-label-above view-mode-rss"><h2 class="field-label">Main image:&nbsp;</h2><div class="field-items"><figure class="clearfix field-item even"><img typeof="foaf:Image" class="image-style-none" src="https://alumni.duke.edu/sites/default/files/dm-main-images/111209-lg-img0485rev.jpg" width="640" height="265" alt="Creative ventures: Alex Andon, Ben Zulauf, Breck Yunits, Andrew Kitchell, and Erin Kitchell, from left, in their apartment-cum-business center. Credit: Peter DaSilva" /></figure></div></section><section class="field field-name-field-author field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Writer:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/author/josh-harkinson" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Josh Harkinson</a></li></ul></section><section class="field field-name-field-issue field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Issue:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/issue/nov-dec-2009" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Nov - Dec 2009</a></li></ul></section> <h3 class="field-label"> Featured article </h3> No <h3 class="field-label"> Background color </h3> blue<section class="field field-name-field-sub-header field-type-text-long field-label-above view-mode-rss"><h2 class="field-label">Sub-header:&nbsp;</h2><div class="field-items"><div class="field-item even">The economy is down, people are being laid off, new jobs are scarce. A group of young Duke alumni share living space and entrepreneurial insights in order to survive—and thrive.</div></div></section> Mon, 30 Nov 2009 10:00:00 +0000 Joseph Sorensen, JOSEPH E. 18501206 at https://alumni.duke.edu Pragmatic Problem Solver https://alumni.duke.edu/magazine/articles/pragmatic-problem-solver <div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"> <div class="media-header flr" style="width: 350px;"> </div><p class="articletitle">Tim Profeta M.E.M. '97, J.D. '97, director of Duke's Nicholas Institute for Environmental Policy Solutions, arrives one April morning at the Capitol Hill office of a Republican senator from the Midwest. He's here to discuss one of the most difficult issues facing Congress this year: how to slow the devastating pace of global warming. President Obama wants lawmakers to pass cap-and-trade legislation, which would set limits on carbon emissions and allow industries to buy and sell pollution allowances. But Obama faces a fight from Republicans, along with Democrats from coal and industrial states, who say restricting emissions will increase energy costs and stifle economic growth.</p><p>Profeta, a thirty-nine-year-old former Senate staffer, is not in Washington to peddle cap-and-trade. His job, instead, is halfway between policy nerd and family counselor. On key environmental issues, including climate change, Profeta and his colleagues listen to all sides, identify the sticking points, and help design legislative fixes to address those concerns. They focus on the staff level, where the rhetoric is less likely to veer into polemics. They do much of their talking, and listening, behind closed doors.</p><p>"He won't quote you," Profeta tells the senator's energy-policy staffer, nodding toward a <span class="pubtitle">Duke Magazine</span> reporter.</p><div class="caption caption-center"><div class="caption-width-container" style="width: 350px;"><div class="caption-inner"><img style="margin-bottom: 10px; display: block; font-size: 12px;" src="/issues/111209/images/111209-lg-09-14profetascout063.jpg" alt="Just the facts: Neither lobbyist nor advocate, Profeta relies on leading- edge academic research to make the case for curbing greenhouse gases and implementing other environmental safeguards." width="350" height="476" /><p class="caption-text"><p><span style="font-size: 12px;">Just the facts: Neither lobbyist nor advocate, Profeta relies on leading- edge academic research to make the case for curbing greenhouse gases and implementing other environmental safeguards. </span><span class="media-h-credit" style="font-size: 12px;">Danuta Otfinowski</span></p></p></div></div></div><p><span class="media-h-credit" style="font-size: 12px;"></span>The aide is new, and his stiff body language gives him a nervous air. His boss views climate change as a moral issue: As a devout Christian, the lawmaker considers himself a steward of God's creation. But he is also concerned that cap-and-trade will drive up prices for his constituents: farmers purchasing fertilizer, manufacturers fueling their assembly lines, families operating their refrigerators and personal computers. During this recession, the senator worries, these financial burdens could outweigh the environmental benefits.</p><div id="container-addins"><div id="addins" class="sidebar">Profeta speaks softly but quickly, using the policy-dense patois common to the Hill. "I'm not an advocate. I don't lobby," he explains. "I live in the world of if-then statements. If you help me define the 'if' statements of where [the senator] is now, we can be useful." Profeta listens to the aide without interruption. Then, in neutral tones, he explains the modeling done by Brian C. Murray M.S. '87, Ph.D. '92, the Nicholas Institute's director for economic analysis. Murray's calculations show how specific policy decisions—particularly the creation of "offsets," which allow polluters to buy credits from others who reduce carbon by planting trees, capturing methane at landfills, or changing farming practices—could substantially drive down the cost of cap-and-trade. "This is important for your boss's interest," Profeta says, sketching out cost curves on a scrap of paper.</div></div><p>By the end of the meeting, the aide is visibly more relaxed. In the hallway, they run into the senator's chief of staff, who refers to Profeta as "my global warming hero."</p><p>"There are three types of people when it comes to climate change," the chief of staff says. "There are those who deny it exists. There are those who use it to pursue another agenda. And there are those, like Tim, who understand it and want to do something about it." He pauses before adding, "That's off the record."</p><hr align="center" noshade="noshade" size="1" width="80%" /><p>In the fall of 2004, Profeta was already in the thick of the climate debate when he received a call from Duke's Nicholas School of the Environment, asking whether he was interested in heading up an institute, still in formation, that would take a pioneering approach to environmental policy. The new institute, Profeta learned, would bring the rigor of university research to Capitol Hill, but with greater speed and relevancy than academic scientists usually muster.</p><p>Profeta, a New Jersey native, had developed a love of the outdoors early, traveling from the Grand Canyon to Glacier National Park with his parents and learning to canoe and climb rocks during an Outward Bound stint in New York's Adirondack Mountains. As a Yale University undergraduate, he took environmental-policy classes and discovered his calling. But he wasn't sure what an environmental career might look like.</p><p>Interning for the Natural Resources Defense Council, Profeta noticed that the lawyers he met mirrored his own professional temperament. "I was more of the pragmatic sort," he says. "That's my personality. It seemed to me that the lawyers were the ones who put the suit on and took it to court, or took it to Congress and tried to get something changed in the law." Even though he couldn't articulate it, Profeta says, he also understood that "the environment was an inherently interdisciplinary topic." Duke had a joint program offering a law degree and master's of environmental management; it seemed like a good match.</p><p>Profeta found the two degree programs "cross-fertilizing," he says. "When my law-school classmates' eyes were glazing over on the seventeenth acronym of environmental law, I was interested because I understood the economics and the science that underlay those laws." After he graduated in 1997, he practiced law and clerked for a judge before accepting a position as the environmental counsel to Senator Joe Lieberman of Connecticut.</p><p>Profeta came to the Hill in 2000, just as Lieberman was accepting the Democratic nomination for vice president. The national campaign transformed Connecticut's junior senator into a major legislative player. The new staffer got pulled into the battles over oil drilling in the Arctic National Wildlife Refuge and reducing the regulatory burden of the Clean Air Act. But Profeta's "obsession," he says, became climate change. In 2003, Lieberman teamed up with Republican Senator John McCain of Arizona to sponsor the first significant legislation calling for an economy-wide cap-and-trade system to curb greenhouse gases from U.S. polluters. Profeta became the principal architect of the Lieberman-McCain Climate Stewardship Act and helped build a political coalition and media campaign around it. The Senate defeated the bill 55-43, but the relatively close margin was viewed by supporters as a hopeful first step.</p><p>The Lieberman-McCain effort revealed Profeta's considerable political savvy. "Tim was able to identify for Lieberman the way to really, really grab the ring: to take advantage of his friendship with McCain and to make McCain a leader on this," says David McIntosh, associate administrator at the U.S. Environmental Protection Agency. McIntosh, who worked in Lieberman's office after Profeta's departure, says Profeta also developed a skill that would serve him well at the Nicholas Institute: the ability to advance an idea without taking credit. "When you are a staffer to a powerful person, you want them to think it's their idea," McIntosh says. "You want them to own the idea in the end. And because you can't really ever say 'no' to them, you have to steer them gently."</p><p>When Duke first called Profeta, he was "happy as can be" in his Senate job, he says. "I had my hands on the tiller of what I thought was the most important legislation in the Congress." At the same time, he felt a "constant frustration" over what he calls "the absolute polarization of this debate."</p><p>"Fifty percent of the political world had confidence in one set of sources and 50 percent had confidence in another set, and those sources were giving them different facts," Profeta says. "And lawmaking is hard. It requires tradeoffs and compromises. But if you can't start with a common version of the facts, compromise is impossible. Progress is impossible."</p><p>Of course, good environmental research happens every day at universities. But that work rarely makes it into the legislative discourse. "Usually, it's neither well-timed nor well-packaged for consumption on the Hill, and it's frequently politically tone-deaf," McIntosh says. "Some professor will look at a debate in Congress and identify what is interesting to her about it, which might be completely irrelevant and unconstructive with respect to where the decision points really are."</p><p>This <span class="pubtitle">realpolitik</span> was not lost on some higher-ups at Duke.</p><div class="media-header top"><div class="caption caption-center"><div class="caption-width-container" style="width: 580px;"><div class="caption-inner"><a href="images/ou081202chodikoadam34-grande.jpg"><img src="/issues/111209/images/111209-lg-09-14profetascout155.jpg" alt="Hill climber: Part policy nerd and part family counselor, Profeta is" width="580" height="241" border="0" /></a> Hill climber: Part policy nerd and part family counselor, Profeta is adept at finding common ground among unlikely allies. <span style="font-size: 10px;">Danuta Otfinowski</span><p class="caption-text"><a href="images/ou081202chodikoadam34-grande.jpg"></a> Hill climber: Part policy nerd and part family counselor, Profeta is adept at finding common ground among unlikely allies. <span style="font-size: 10px;">Danuta Otfinowski</span></p></div></div></div></div><p>In 1995, Pete Nicholas '64, a Duke trustee and chair of Boston Scientific Corporation, and his wife, Ginny Lilly Nicholas '64, donated $20 million toward the creation of the environmental school that bears their family's name. In the decade that followed, Duke's Nicholas School developed significant academic and research chops. But Pete Nicholas says he felt a growing "frustration" that the school remained aloof from environmental policy debates.</p><p>He knew this was hardly unique to Duke. Traditionally, academe and government marshal information differently when it comes to matters of science. Academic research has the credibility that comes from peer review and statistical analysis, but it also tends to unfold in glacial time (and often suffers from that tone-deafness noted by the EPA's McIntosh). Political information comes from more nimble, but less objective, sources: lobbying firms, advocacy groups, and think tanks with ideological leanings.</p><p>"It's not clear to me," Nicholas says, "that any legislative group can look at these organizations without calculating very carefully, 'Where do they come from? What is their ax to grind? What are their biases? How does that influence what they say?' "</p><p>Nicholas consulted with Duke administrators, including then-president Nannerl O. Keohane, about how to create an environmental brain trust that was politically engaged enough to make its presence felt in Washington. "The idea was, there really is no organization in this country located in a major academic institution that has the capability of providing high-integrity, objective, science-based information and modeling designed to help understand problems and help develop policy solutions," he says. The Nicholas Institute was born in 2005—one of seven Duke institutes designed to foster collaborations "in the service of society." (The others include the Kenan Institute for Ethics and the Institute for Genome Sciences and Policy.) It was funded, in part, from a $70 million gift made two years earlier by the Nicholases, who were co-chairs of the Campaign for Duke. To lend the institute heft, Duke tapped William Reilly, EPA's top administrator under President George H.W. Bush, to chair the institute's board of advisers. At EPA, Reilly says he, too, had noticed how little academic researchers participated in what he calls "the mud bath of politics."</p><p>"Many times, when I made controversial regulatory calls, I was quietly advised by scientists, who promised to be behind me. Then I discovered they were several miles behind when the going got rough," he says.</p><p>Profeta, comfortable among scholars and respected within Capitol culture, was a logical pick to head up the institute, say its founders. "The only question was his age, his youthfulness," Nicholas says. "Did he have enough experience, enough gravitas, to bring commanding respect to the institute? As it turned out, these potential weaknesses were great strengths. He brought an unbridled enthusiasm for the task—and had very little clue about what couldn't be done."</p><hr align="center" noshade="noshade" size="1" width="80%" /><p>Profeta identified three areas for the institute to focus on: oceans, fresh water, and climate change. Among its activities, the institute has fostered conversations on how to zone oceans for different uses based on their ecosystems, helped create a sustainability-education program for the nation's commercial-fisheries managers, and used North Carolina's 2007-08 drought to examine how to allocate and price the state's finite water supply. It's also starting to work with Asian and African leaders on issues of water scarcity and sanitation.</p><p>Profeta knows this is an ambitious sweep. "I try to live by the maxim that you can only do three things well at one time," he says. "So we picked three things. But we are stretching the barriers of what that maxim was meant to suggest."</p><p>The institute's most visible area has been climate change. With cap-and-trade legislation meandering through Congress—one bill passed the House in June and another is under consideration in the Senate—Profeta finds himself back in familiar territory. Under a cap-and-trade system, large polluters like manufacturers and utilities must obtain permits for every ton of carbon they release. (The initial permits would be sold by the government or given away for free or, most likely, some combination thereof, depending on the final legislation.) The most efficient companies will voluntarily reduce their emissions below their permitted allowances; they can then sell their unused permits to others. Each year, the total number of allowable tons decreases until the U.S. meets its emissions goals. The revenues from selling these permits can be invested in renewable energy, green technologies, and energy efficiency and can also help ease the financial burden for individuals and businesses making the transition to cleaner energy.</p><p>Long before the House bill was introduced by Democratic Representatives Henry Waxman of California and Edward Markey of Massachusetts, Profeta was looking for ways to address the strongest objections of moderate, undecided lawmakers who were considered key swing votes. In 2006, the institute identified fifteen senators who were wavering on climate legislation, then surveyed those legislators' staff. "In that process," Profeta recalls, "two of the offices came to us and said, 'Don't just ask us about the problem. You're the institute for policy solutions. Help us solve it.' "</p><p>The following year, the institute created a "policy lab" involving aides to four senators: South Carolina Republican Lindsey Graham, Louisiana Democrat Mary Landrieu, Arkansas Democrat Blanche Lincoln, and Virginia Republican John Warner (who has since retired). Every Friday morning at 10—"almost religiously," Profeta says—those staff members met with Profeta and other institute experts to talk about problematic aspects of cap-and-trade.</p><p>What emerged was that the senators didn't like any of the existing proposals for making sure industry's compliance costs didn't rise too steeply. At that point, the debate was polarized: Either you wanted the free market to determine the cost of pollution allowances or you supported a "safety valve" that provided companies with relief—potentially at a cost to the environment—when the price of allowances reached a threshold. "This was an issue that threatened to derail any hope of climate legislation," says Nicole St. Clair Knobloch, research project manager for the institute's Low Carbon Competitiveness Project. "There had to be something else on the table."</p><p>Profeta and his colleagues reviewed the literature, did their own analysis, and helped the Senate aides come up with a wholly new proposal for containing costs. The plan, which has evolved over time, would skim a small number of pollution allowances from each year's total and put them in a reserve. An oversight board, nicknamed the "Carbon Fed," would monitor the price of allowances. When they climbed too high—for example, during a hot summer when everyone jacks up their air-conditioning and the demand for coal skyrockets—the Carbon Fed could release some of those allowances, driving down the cost of emitting pollutants. Over time, theoretically, this would not add to the total emissions: An additional ton of carbon permitted in 2015 would mean one less ton in, say, 2040.</p><p>The Institute went through what's called a "murder board" process: It shared the proposal with trusted think tanks, nonprofits, and corporations, along with colleagues in the European Union. "We had a meeting with them to say, 'Are we nuts? Is this laughable? Is this the right idea? What did we miss?' " says St. Clair Knobloch. After the institute revised the plan, the four swing senators threw their support behind the concept. A variation of the idea—minus the Carbon Fed—has since been incorporated into the current climate bill.</p><div class="media-header top"><div class="caption caption-center"><div class="caption-width-container" style="width: 580px;"><div class="caption-inner"><a href="images/ou081202chodikoadam34-grande.jpg"><img src="/issues/111209/images/111209-lg-09-14profetascout097sm.jpg" alt="Peripatetic policy shaper: Profeta’s Washington trips are packed with " width="580" height="240" border="0" /></a><div class="media-h-caption">Peripatetic policy shaper: Profeta’s Washington trips are packed with back-to-back meetings, carefully calibrated conversations with key politicians, and between-appointments reviews of e-mail and text messages. <span class="photocredit">Danuta Otfinowski</span><p class="caption-text"><a href="images/ou081202chodikoadam34-grande.jpg"></a><div class="media-h-caption">Peripatetic policy shaper: Profeta’s Washington trips are packed with back-to-back meetings, carefully calibrated conversations with key politicians, and between-appointments reviews of e-mail and text messages. <span class="photocredit">Danuta Otfinowski</span></p></div></div></div></div></div><p>"As Hill staff, you're not really an expert on anything," says Ann Loomis, who attended the meetings as Warner's chief of staff and now lobbies for the energy producer Dominion. "At the end of the day, what you hope is that what you write into legislation is going to work." Loomis says the Institute's expertise, "nonpartisan" approach, and "outside-the-box" thinking reassured her that it was possible to reduce greenhouse emissions without financially crushing manufacturers and utilities.</p><p>That doesn't mean the Senate will definitely approve its own cap-and-trade bill, which was introduced in September by Democrats John Kerry of Massachusetts and Barbara Boxer of California. It doesn't even mean the remaining swing senators will vote for the legislation. Last March, Landrieu, the Louisiana senator, came out strongly against "forcing petrochemical companies and Louisiana manufacturers to bear the brunt" of the costs of reducing carbon emissions. "My record on cap-and-trade legislation is clear," the Democrat wrote to <span class="pubtitle">The Ouachita Citizen</span> in West Monroe, Louisiana. "I will not simply rubber stamp climate change proposals because my party and the Obama administration support them."</p><p>But the EPA's McIntosh notes that public posturing has little to do with a bill's eventual outcome. "The swing votes have the highest risk of political pain for supporting this piece of legislation," he says. "Tim recognizes that the last thing that those members want to do, even when they're moving toward an adjustment in their position, is tip off all the people who won't like that change and have them descend on that member. The best way to get ninety-nine yards down the field, and then fail to score the touchdown, is to squeak too early."</p><div class="media-header top"><div class="caption caption-center"><div class="caption-width-container" style="width: 580px;"><div class="caption-inner"><a href="images/ou081202chodikoadam34-grande.jpg"><img src="/issues/111209/images/111209-lg-09-14profetascout077.jpg" alt="Peripatetic policy shaper: Profeta’s Washington trips are packed with back-to-back meetings, carefully calibrated conversations with key politicians, and between-appointments reviews of e-mail and text messages." width="580" height="240" border="0" /></a><div class="media-h-caption">Peripatetic policy shaper: Profeta’s Washington trips are packed with back-to-back meetings, carefully calibrated conversations with key politicians, and between-appointments reviews of e-mail and text messages. <span class="photocredit">Danuta Otfinowski</span><p class="caption-text"><a href="images/ou081202chodikoadam34-grande.jpg"></a><div class="media-h-caption">Peripatetic policy shaper: Profeta’s Washington trips are packed with back-to-back meetings, carefully calibrated conversations with key politicians, and between-appointments reviews of e-mail and text messages. <span class="photocredit">Danuta Otfinowski</span></p></div></div></div></div></div><p>Shadowing Profeta as he navigates the Hill requires comfortable shoes, a vow of partial silence, and a lot of after-the-fact explanation. It's like going to a scientific conference with a group of geniuses who have worked together for years on the same arcane study. And who all mumble. And refuse to disclose their names.</p><p>Profeta's morning starts with a series of serendipitous encounters. At Washington's Reagan National Airport, after an 8:10 a.m. flight from Raleigh-Durham, he runs into Bill Bonvillian, former legislative director for Lieberman, who expresses his fear that the climate bill will shortchange research and development as lawmakers divert money to more political purposes. "Wait till they pay for health-care funding," warns Bonvillian, who now heads the Massachusetts Institute of Technology's Washington office. "Then it's really over." Thirty minutes later, grabbing coffee at Union Station, Profeta compares notes on cap-and-trade with Mark Gaede, a lobbyist for the National Association of Wheat Growers. He says these casual conversations provide some of his best D.C. intelligence.</p><p>After his meeting with the aide to the Midwestern senator, Profeta rushes off to another GOP lawmaker's office—no reporters allowed. Then he meets a Democratic Senate staffer who is working to convene a forum to explore the difficult issues of climate policy. After discussing who might join the forum, she and Profeta trade wisdom about the climate bill, which in late April is still inside the House Energy and Commerce Committee.</p><p>"They're short votes," Profeta reports. "Either it's brinksmanship, or we're really screwed." (The bill would be reported favorably by the committee three weeks later by a 33-25 vote.)</p><p>Next there's lunch with a potential funder—who reluctantly allows a reporter to attend, as long as nothing is written about the conversation. Then another meeting on the Hill, followed by a forum on climate change convened by one of the nation's top Democratic Party leaders. The forum is so secret that Profeta is not even supposed to acknowledge that it happened.</p><p>Before he leaves for a private dinner with U.S. Energy Secretary Steven Chu Hon. '06, Profeta sits down with Maggie Fox, the new president of the Alliance for Climate Protection, a nonprofit founded by former Vice President Al Gore. They chat in the lobby of Washington's St. Regis Hotel, under Italian Renaissance chandeliers, about some of the impediments to climate legislation. One is the resistance of lawmakers from poorer districts. This week, Representative G.K. Butterfield, Democrat of North Carolina, has fretted aloud that cap-and-trade would raise the price of everything from gasoline to toys. "For a low-income family, it's absolutely impossible for them to absorb the costs," he told reporters.</p><p>Fox suggests that what's needed are "state laboratories," small-scale experiments focused on reducing carbon emissions without burdening the poor. "What you need to say to Butterfield is, 'Let's sign up your district today,' " she tells Profeta. "Let's pick twenty-five districts, because there's a big difference between a low-income district in North Carolina and one in Montana."</p><p>Profeta, not surprisingly, has studied the low-income question, both in the Senate and at Duke. So has Todd Wooten, whom the institute tapped to head its Southeast Climate Resources Center. "We just did a policy brief on this," he tells Fox. "How do I make this available to you?"</p><p>As he moves through Washington, talking with everyone from Congressional aides to Secretary Chu, Profeta remains nearly invisible to outsiders. He received just two mentions in major U.S. newspapers during the first nine months of 2009. Yet those who work with him say his imprint is ubiquitous. "I call Tim the marionette master," says one Senate staffer. "He controls all the puppets."</p><hr align="center" noshade="noshade" size="1" width="80%" /><p>At this point, the world is waiting to see what type of climate legislation emerges from Congress. Until now, the U.S. has not been a strong leader in reducing greenhouse gases, but that could change under the Obama administration. The passage of cap-and-trade legislation would send a strong signal to other countries that international cooperation is both possible and essential.</p><p>The Waxman-Markey bill, which the House passed in June, contains a weaker cap-and-trade provision than President Obama originally called for: Rather than auctioning off all the pollution allowances, it gives 85 percent away for free. This has bolstered the arguments of critics who say cap-and-trade will not sufficiently reduce emissions.</p><p>Profeta disagrees. He quotes nineteenth-century German chancellor Otto von Bismarck: "Laws are like sausages. It's better not to see them being made." The House climate bill, he says, "is more andouille sausage than a hot dog. It's got a lot of good stuff in it." The institute did an analysis of future greenhouse-gas levels under the House bill. "In any scenario where we get legitimate action out of India and China in the next ten to fifteen years, it should be sufficient to get us to the overall concentration goals," Profeta says. If those countries "don't do anything," he adds, "we're screwed."</p><p>Profeta continues to address some of the bill's trouble spots. In July, he participated in a workshop hosted by the German Marshall Fund to examine the impact of cap-and-trade on international competitiveness. The meeting, which drew fifty senior staff members from Congress and the Obama administration, explored policies that might blunt the rise in production costs for energy-intensive industries.</p><p>Profeta acknowledges that the current bill is "rife with imperfections because of politics." Ever the pragmatist, he doesn't let these shortcomings slow him down. "I don't really reflect," he says. "I just keep riding the boat down the river."</p><p><span class="byline">Yeoman is a freelance journalist whose work appears in</span> Audubon<span class="byline">,</span> AARP The Magazine<span class="byline">, and </span>O, The Oprah Magazine<span class="byline">.</span></p> </div></div></div> <h3 class="field-label"> Published </h3> <span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2009-11-30T00:00:00-05:00">Monday, November 30, 2009</span><section class="field field-name-field-main-image field-type-image field-label-above view-mode-rss"><h2 class="field-label">Main image:&nbsp;</h2><div class="field-items"><figure class="clearfix field-item even"><img typeof="foaf:Image" class="image-style-none" src="https://alumni.duke.edu/sites/default/files/dm-main-images/111209-lg-09-14profetascout155.jpg" width="638" height="265" alt="" /></figure></div></section><section class="field field-name-field-author field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Writer:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/author/barry-yeoman" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Barry Yeoman</a></li></ul></section><section class="field field-name-field-issue field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Issue:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/issue/nov-dec-2009" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Nov - Dec 2009</a></li></ul></section> <h3 class="field-label"> Featured article </h3> No <h3 class="field-label"> Background color </h3> blue<section class="field field-name-field-sub-header field-type-text-long field-label-above view-mode-rss"><h2 class="field-label">Sub-header:&nbsp;</h2><div class="field-items"><div class="field-item even">Tim Profeta M.E.M. &#039;97, J.D. &#039;97, comfortable among scholars and respected within Capitol culture, brings a sure hand to the delicate task of inserting good environmental research into the national legislative discourse.</div></div></section> Mon, 30 Nov 2009 10:00:00 +0000 Joseph Sorensen, JOSEPH E. 18501205 at https://alumni.duke.edu Stimulating Duke https://alumni.duke.edu/magazine/articles/stimulating-duke <div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"> <table width="98%" border="0" cellspacing="0" cellpadding="2"><tbody><tr><td valign="top"><p class="articletitle">All is not grim for Duke and other research universities in the current financial climate. In February 2009, Congress passed the American Recovery and Reinvestment Act (ARRA), commonly called the stimulus package, resulting in the investment of $15 billion in activities that promote job growth and retention and scientific advancement.</p><p>The National Institutes of Health, which funds biomedical research, and the National Science Foundation, which supports basic research in science and engineering, are the biggest beneficiaries—meaning that university-based research will benefit in turn.</p><p>As of early October, Duke had been awarded about $147 million in stimulus money, $117 toward the medical center and $30 million for other parts of the university, including biology, chemistry, electrical engineering, psychology and neuroscience, mathematics, computer science, economics, environmental studies, sociology, and public policy. University officials estimated that research support worth another $18.7 million was on track for approval. Much of the new funding reaches back to proposals submitted previously that favorably impressed review panels but that—because of limited budgets—couldn't be approved. The new funding is allowing the university to keep or add more than 100 positions, ranging from work-study undergraduates to post-doctorates.</p><p>James Siedow, vice provost for research, points out that the good news is tempered by a few sobering facts. For one thing, federal research funding has held flat, or when adjusted for inflation, dropped off in recent years—even as the cost of research in the medical sciences and the number of researchers pursuing grants have increased steadily. So even with the new largesse, organizations like the NIH and NSF are playing catch-up.</p><p>And while the temporary windfall is welcomed, there's no guarantee that federal research budgets will grow, or even be sustained, into the future, particularly with a soaring national deficit.</p></td></tr></tbody></table> </div></div></div> <h3 class="field-label"> Published </h3> <span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2009-11-30T00:00:00-05:00">Monday, November 30, 2009</span><section class="field field-name-field-main-image field-type-image field-label-above view-mode-rss"><h2 class="field-label">Main image:&nbsp;</h2><div class="field-items"><figure class="clearfix field-item even"><img typeof="foaf:Image" class="image-style-none" src="https://alumni.duke.edu/sites/default/files/default_images/dukmag-horizontal-placeholder.jpg" width="238" height="140" alt="" /></figure></div></section><section class="field field-name-field-issue field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Issue:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/issue/nov-dec-2009" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Nov - Dec 2009</a></li></ul></section> <h3 class="field-label"> Featured article </h3> No <h3 class="field-label"> Background color </h3> blue Mon, 30 Nov 2009 10:00:00 +0000 Joseph Sorensen, JOSEPH E. 18501204 at https://alumni.duke.edu The View From Out West https://alumni.duke.edu/magazine/articles/view-out-west <div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"> <table width="98%" border="0" cellspacing="0" cellpadding="2"><tbody><tr><td valign="top"><div class="media-header "><div class="caption caption-center"><div class="caption-width-container" style="width: 580px;"><div class="caption-inner"><img src="/issues/111209/images/111209-lg-10045709medium.jpg" alt="Stanfor University" width="580" height="241" /><p class="caption-text"><div class="media-h-caption">iStockPhoto</p></div></div></div></div></div><p class="articletitle">At Stanford University in Palo Alto, California, Provost John Etchemendy's office isn't far from signs pointing to "Earthquake Engineering" and "Turbulence Research"—ironic indicators of a campus reeling from a financial shock.</p><p>In the past year, Etchemendy, a philosopher, has had to deal with what he dryly calls "a unique situation"—even compared with the dot-com implosion of a decade ago, which disproportionately affected Silicon Valley.</p><p>Underlying this downturn at Stanford is a damaging triple hit: a drop in income from endowment and other investments estimated at 30 percent, a falling off in sponsored-research revenue, and (because of a relatively small tuition hike of 3.5 percent) only modest increases in student revenue. In the current fiscal year, Stanford is aiming to trim $100 million from its $800 million budget. Originally, the plan had been to stretch the $100 million cutback over two years. That was before the national economic situation deteriorated and the value of the endowment continued to plummet.</p><p>Among other steps, Stanford imposed a university-wide salary freeze, suspended $1.3 billion in construction projects, instituted hiring freezes, and slowed down (or in some cases halted) faculty searches. Virtually all top administrators took a 5 percent salary reduction. The university also decided to spend less money from its endowment, a step that, it is hoped, will help to restore the endowment to its previous levels—but will at the same time restrict spending all the more severely.</p><p>Last January, the Stanford Graduate School of Business laid off forty-nine employees—about 12 percent of its staff. By the start of the current academic year, Stanford schools and units had laid off 412 staff members and eliminated their positions. Cuts in Student Affairs affected fifty-five employees; some were compelled to work half time during the summer, and some took voluntary pay cuts. The division also cut expenses related to travel, conferences, food, classroom furniture, student salaries, and printing.</p><p>Through it all, Stanford has stuck by its commitment to an expanded financial-aid program. "For families earning up to $100,000 a year," says Etchemendy, "the cost of sending your child to Stanford is less than sending him or her to any part of the state university system in California."</p><p>Cutbacks are alien to a university culture, Etchemendy says. "One thing a university is good at is expanding. It's not so good at stopping things that it does. A departmental program usually starts when there is a group of faculty who are very enthusiastic about a new area. It becomes a very vibrant program. Ten or fifteen years later, it might not be a very vibrant program, but by that point it's very difficult for the university to shut it down.</p><p>"Realities like that can get overlooked in times of abundance. But now people understand that we can't be doing everything that we have been doing. So maybe this kind of correction has a good side to it."</p><p>Research universities will have to adjust to what he calls "a new baseline," but Etchemendy says—to borrow the title of Stanford's most recent annual report—they can still be "leading in times of challenge." He points out that Stanford's endowment level now is close to where it was three or four years ago. "That doesn't mean this isn't a difficult time. But we are and will be an extremely strong institution."</p></td></tr></tbody></table> </div></div></div> <h3 class="field-label"> Published </h3> <span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2009-11-30T00:00:00-05:00">Monday, November 30, 2009</span><section class="field field-name-field-main-image field-type-image field-label-above view-mode-rss"><h2 class="field-label">Main image:&nbsp;</h2><div class="field-items"><figure class="clearfix field-item even"><img typeof="foaf:Image" class="image-style-none" src="https://alumni.duke.edu/sites/default/files/default_images/dukmag-horizontal-placeholder.jpg" width="238" height="140" alt="" /></figure></div></section><section class="field field-name-field-issue field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Issue:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/issue/nov-dec-2009" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Nov - Dec 2009</a></li></ul></section> <h3 class="field-label"> Featured article </h3> No <h3 class="field-label"> Background color </h3> blue Mon, 30 Nov 2009 10:00:00 +0000 Joseph Sorensen, JOSEPH E. 18501203 at https://alumni.duke.edu Sizing Up a Smaller Duke https://alumni.duke.edu/magazine/articles/sizing-smaller-duke <div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"> <div class="media-header flr" style="width: 250px;"><img src="/issues/111209/images/111209-lg-duke2.jpg" alt="---------------" width="250" height="467" /><div class="media-h-credit"> </div></div><p class="articletitle">On a late afternoon in September, with summer very much in the air, the Duke Symphony Orchestra has just finished its traditional opening concert on the East Campus lawn. A half-dozen freshmen head to the scene just in time for the finale—the inevitable "Stars and Stripes Forever." One of them asks, "Is there free food here?" His friends weren't sure. But, they should have surmised, this is not the year for free food.</p><p>For a decade or so, higher education had been on a seemingly unstoppable roll, in happy harmony with the rest of the U.S. economy. Over the ten years ending June 30, 2008, Duke's $6.1 billion endowment had been growing at an average annual rate of 15.6 percent. That largesse was put to work. Aiming to keep higher education affordable, Duke, like many top-tier institutions, enhanced financial-aid packages. New programs grew from new thinking about research and learning, notably DukeEngage, which funds students in civic-engagement projects around the world. At a September faculty meeting, George McLendon mentioned a key measure of intellectual growth over his five years as dean of the faculty of Arts & Sciences: an increase of almost fifty tenured or tenure-track faculty members.</p><p>And the bricks-and-mortar expansion (with architecturally pleasing stone included for good measure) is even more striking: a new library building, a new engineering complex, a new science building, new and revamped athletics facilities, an art museum, and physical growth in schools ranging from divinity to business.</p><p>Today, though, campuses are no longer awash in a wave of prosperity. They're reeling from the shock wave of the Great Recession.</p><p>This fall, Harvard University reported that its endowment had plunged 27.3 percent in the past fiscal year. Harvard, in addition to halting a huge campus expansion plan, had already frozen nonunion salaries, offered voluntary retirement incentives for staff, and, in June, announced 275 layoffs. Yale University suffered about a 30 percent loss in its endowment. Yale president Richard C. Levin alerted the Yale community to expect "another round of reductions."</p><p>Earlier, Yale had anticipated that some 300 employees would be laid off; as it turned out, most of its reductions have been achieved by leaving vacant positions unfilled. At the ten University of California campuses, thousands of students, faculty members, and employees turned out to protest budget cuts, unpaid faculty furloughs, and tuition increases.</p><p>Duke was not immune. After all those years of growth, the university's endowment suffered a 24.5 percent loss in fiscal year 2008-09. (Duke's endowment still grew at a 10.1 percent average annual rate over the last ten years, a rate that places Duke second only to Yale.) Duke's giving total for fiscal year 2008-09 dropped 22 percent from the previous year, from $386 million to $302 million; the number of donors was about the same. Contributions to the university from The Duke Endowment, historically the largest donor, fell from $77.7 million the previous year to $40.3 million. Some of the giving from The Duke Endowment, and from other sources, was for particular projects, the university's Financial Aid Initiative among them, and wasn't bound to be repeated. But for The Duke Endowment, a private foundation based in Charlotte, as for every charitable organization, philanthropy was taking a tumble with the financial markets.</p><p>Those aren't surprising results in a stressed economic climate. In 2008, the average individual 401(k) account lost 28 percent of its value. According to the Federal Reserve, in the third quarter of last year, the net worth of American households fell by 9 percent—the largest amount in more than a half-century. For the full year, household wealth dropped $11.1 trillion, or about 18 percent. Most of the wealth was lost in the holdings of financial assets like stocks.</p><p>Duke is in a three-year effort to recover $125 million—$125 million, that is, less than what the university would be spending not just for what it's now doing but for what it would like to be doing. So part of Duke's response hinges on cutting back current expenses; part of it hinges on scaling back its plans and looking for other revenue sources.</p><p>At the same time, the university's spending policy calls for paying out a fixed rate, currently 5.5 percent, of the average value of the endowment over a three-year period. (In flush times, the board of trustees has occasionally limited the amount of endowment payout from one year to the next. More recently, Duke has been using accumulated reserves—the equivalent of a household's "rainy-day fund"—to avoid more severe cuts.) Given the dropping off in endowment returns, the next two budget years will be increasingly tough at Duke.</p><p>"Calibrating the size of the problem is quite difficult," says Tallman Trask III, executive vice president, "in part because the markets are moving all the time." The markets are up since the initial $125 million calculation, "but other things are down, including big gifts," adds Trask, the chief administrative and financial officer for the university. "I didn't ascribe a great precision to $125 million in the first place, and I'm not ready to ascribe a great precision to any alternative number yet."</p><p>Trask co-chairs the Duke Administrative Reform Team (which goes by the assertive acronym DART), a group of administrators, faculty members, and staff members that reviews ways to re- duce costs and improve efficiency. There's new scrutiny around energy, for example: In the winter buildings will be colder and in the summer, warmer—about two degrees in either direction. There are now strict guidelines for charging business meals to the university. One faculty member, in a recent conversation, couldn't help observing that Durham's finer restaurants are looking a lot less crowded, in part because the Duke corporate credit card is no longer so easy to reach for. Duke also will no longer fund home Internet services for faculty or staff members or pay for subscriptions or memberships in professional organizations.</p><p>At the same time, Duke is innovating in the interest of budget relief. It's converting to Voice over Internet Protocol (VoIP), a phone system that takes analog audio signals of your voice and turns them into digital data. In essence, VoIP uses a standard Internet connection and eliminates the need for dedicated phone lines and switching equipment—an estimated $2.7 million annual savings.</p><p>Before heading out for a run one hot September afternoon, Kevin White, who became Duke's vice president and director of athletics in the summer of 2008, contemplates his department's own economic innovations. Talking in his Schwartz-Butters Athletic Center office, which offers a sweeping view of Duke's athletics infrastructure, he employs the vocabulary of a business thinker, motivator, and citizen of the campus: "reshuffling the deck," "reprioritizing,""working smart," "being proactive," and "being true to our mission." White says, "We're preparing for the worst and hoping for the best. But the idea is to get through this period in an even stronger position."</p><p>Last spring, White worked with colleagues to craft a "Financial Exigency Plan." The plan envisions six levels of financial crisis—from the seemingly manageable pressures produced by the current downturn to shortfalls significantly greater than $5 million—along with accompanying actions. The plan would protect student-athletes and "the student-athlete experience," avoid layoffs until other money-saving methods are explored, and consider reducing the number of sports only as "a last resort."</p><p>Right now Duke Athletics is in the first of the six levels. The department has imposed economies in, among other areas, information technology (only computers that break down will be replaced and only then if other computers aren't available), print production and postage (primarily cutbacks in media guides and other publications), entertainment (including game-related hospitality and banquets), ticket distribution (tighter restrictions on complimentary tickets), training tables (reducing the total number of training-table meals served and the cost per meal), and team travel (negotiating group rates more aggressively).</p><p>Athletics is trying to increase revenue, "but in an environment like this, it's pretty difficult," says White. Shortly after he arrived, Duke and Nike Inc. reached a ten-year sponsorship agreement that will supply all twenty-six teams with uniforms, footwear, apparel, and equipment. Nike will also provide cash compensation annually to the department.</p><p>More recently, Duke completed a long-term marketing and media-rights deal with ISP, a Winston-Salem-based company with a college-sports focus. ISP will oversee the Duke Athletics radio network, the weekly football and basketball coaches' TV shows, scoreboard and stadium advertising, and GoDuke The Magazine. Capitalizing on one of its prime assets, men's basketball, the department is offering more premium seating in Cameron Indoor Stadium, without cutting back on seating (or standing) students.</p><p>On the other end of West Campus, geographically and perhaps metaphorically, the Nasher Museum of Art is also adjusting to challenging times—exacerbated by a drop in corporate support. But is this the right moment for buying art? According to Nasher director Kim Rorschach, "The most dramatic drop in prices has been in the over $5 million arena. And we don't play in that game because we don't have acquisition funds at that level. We tend to buy leading edge contemporary art, works in the below $100,000 range. Prices have dropped there as well, but not quite as much as we would like."</p><p>The museum is now conceiving all-purpose gallery configurations; in the past it would knock down and rebuild temporary gallery walls for each new exhibition. And it's cost-conscious around loans for those exhibitions. The current "Beyond Beauty" features photographic material from Duke's own Rare Book, Manuscript, and Special Collections Library. "Picasso and the Allure of Language" was organized with the Yale University Art Gallery; most of the works come from Yale collections. For a future exhibition, the Nasher and its counterparts at the University of North Carolina at Chapel Hill and UNC-Greensboro are collaborating for "The World Through Andy Warhol's Lens." Polaroids donated to each museum by The Andy Warhol Photographic Legacy Program will travel, in a grand combination, among the three museums, with the sharing of framing and other expenses.</p><p>Rorschach is an alumna of the financially stressed Brandeis University, which made news last winter by announcing that it would shut its Rose Art Museum and sell its entire 6,000-piece collection. The collection includes works by Warhol, Marsden Hartley, Robert Rauschenberg, Roy Lichtenstein, Jasper Johns, Helen Frankenthaler, Willem de Kooning, and other leading art figures of the last century. Brandeis officials have since backtracked on the idea of closing the building, but the future of the collection remains uncertain.</p><p>"I spent many formative hours in the Rose," Rorschach says. "The thought that Brandeis would dissolve it was personally devastating. Happily, many universities very quickly made very reassuring statements about the central importance of art, about the importance of managing collections to the highest professional standards and retaining the confidence of donors and supporters."<img src="/issues/111209/images/111209-Financial%20Chart.jpg" alt="University Endowment at the End of Each Fiscal Year (in billions)" width="566" height="298" border="0" /></p><p> </p><p> </p><p> </p><p> </p><p> </p><p>So far, budget-cutting at Duke has focused mostly on the art of controlling personnel expenditures. For higher education generally, 60 to 70 percent of the budget is tied up with direct compensation and benefits, says Kyle Cavanaugh, Duke's vice president for human resources. "When you go through a significant budget realignment, it has to impact your work force." Cavanaugh joined Duke last February from the University of Florida at Gainesville. Like other public universities, Florida had been feeling increasing pressure from shrinking state budgets, even before the collapse of the financial markets last fall—a leading indicator of the trouble to come for higher education overall.</p><p>Last spring Duke stipulated that there would be no salary increases for employees making more than $50,000 a year; employees below that threshold received a one-time $1,000 payment. The university also put in place what's called, somewhat cumbersomely, a vacancy management initiative. Cavanaugh says, "We can't behave like a private company, where you might do a full hiring freeze," for lots of reasons—including the fact that grant money supports some positions and that others are critical to the workings of the institution. Still, as positions become vacant, "they have to go through a very significant level of scrutiny, all the way up to the senior leadership, as to whether they will be approved or not."</p><p>Cavanaugh notes that, in the past, Duke's employee turnover rate was about 15 percent—a percentage that would yield considerable savings even with a quasi-hiring freeze. But a bad hiring environment overall has slowed that turnover rate to 8 or 9 percent. Duke's most dramatic gesture so far has been a voluntary retirement initiative. In the first wave, last spring, 825 staff members (considered hourly rather than salaried employees) qualified, and 294 accepted it, an unexpectedly high figure. Eligible employees were at least fifty-years old and had worked at Duke for at least ten years. If they took the offer, they received five years added to their Duke service and five years added to their age—add-ons aimed at bolstering their pension payout and their eligibility to receive retiree health insurance. The retirements will save the university about $15 million annually.</p><p>In late September, the university announced a second round of retirement incentives, this time directed to 198 salaried employees. According to a university statement, deans and vice presidents will gauge whether a position "could potentially be eliminated or restructured for significant cost savings if the retirement incentive is accepted."</p><p>Even as its workforce is shrinking, Duke is, more than ever, a magnet for job seekers. With North Carolina's unemployment rate at nearly 11 percent, the number of people looking for work at the university has hit an all-time high. This past January, 10,367 people applied—a 52 percent increase over the same month last year. The university along with the health system is on track to draw 125,000 job applications this year, even with a shrinking number of job openings.</p><p>Trask, the executive vice president, says Duke's retirement incentives and other strategies are carefully considered. "You're trying to manage a very complicated, multifaceted enterprise here. Each of the schools is different, each of their financial realities is different, and they all got where they are in different ways. If you just hit them with a meat cleaver, that wouldn't be thoughtful or productive. So we've gone through all the schools' budgets with some care. We say to deans, 'It looks to us that you spend a lot of money in this category. Did you know that? Did you consciously decide to do that? Do you think you're actually getting what you expected in return for that?' It turns out that sometimes the answer is yes and sometimes it's no.</p><p>"We're not telling them whether they should do something or not. But I can't imagine a dean would consciously choose hiring fewer faculty members over perpetuating an inefficient bureaucracy." Duke's central administration, says Trask, is relatively lean. He's watched the work of an outside consulting group that recently arrived at a different conclusion for the neighboring University of North Carolina at Chapel Hill. There, administrative expenses per student have grown faster than academic expenses, and multiple layers of management have led to administrative inefficiencies. "One of the things I decided to do almost a decade ago was to not grow the administrative part of the university," says Trask, who came to Duke in 1995. "If you look at Duke's budget over the last decade, the percentage that goes to administrative costs is flat. You don't want to direct your money in that direction if you can help it."</p><p>And Duke didn't want to direct its cost-cutting efforts to "a massive involuntary layoff program that was likely to have longstanding negative consequences for the institution," Trask says. "We would do that as a last move, not the first. The institution is its people. We didn't want to just start hacking at the core of the institution."</p><p>That strategy seems right to Connel Fullenkamp, associate professor of the practice and director of undergraduate studies for the economics department. What Duke is doing, he says, is akin to a corporate restructuring, a subject that he teaches. "You figure out what your priorities are and what your ultimate core competencies are. If you find yourself sacrificing the quality of your product, then you know you're in trouble."</p><p>Fullenkamp says a radical downsizing would have saved more money, but at an intolerable price. The problem with cutting personnel aggressively, he says, is "not just the number of people you lose, it's the possibility that you're sending your best talent out to the parking lot, never to return." Still, he says, the university could be sending out a stronger message that "we're not just sitting here and licking our wounds, but rather we're using this as an opportunity to become a better institution."</p><p>Whether or not Duke is poised to become a better institution, Duke students don't seem all that mindful of pressures on the budget. An informal survey in an undergraduate seminar brought observations about reduced services in the residential-life area (particularly housekeeping staff no longer cleaning up residence halls over weekends). Most of the comments were in the vein of "I haven't felt or seen a dramatic change in the activities I participate in." Students were more preoccupied with the economy and their own lives. Some noted that social activities felt more constrained because of the reluctance of their peers to spend large sums. Another, looking ahead, said, "I feel pressured to perform more competitively in order to find a job when I graduate." One student drew a parallel between the White House's unwillingness to summon the American people to sacrifice in the wake of 9/11 and the university's unwillingness to see budget challenges impinge on students.</p><p>In the view of another of those surveyed students, Duke is "doing well, especially considering the difficulties my friends who attend other universities have told me about." Other universities are, in fact, experiencing endowment losses larger than Duke's. Analysts point out that markets were so warped in the last year—arguably the greatest such warping since the Great Depression—that "investment indigestion," as <span class="pubtitle">The New York Times</span> called it, plagued institutions lured into private equity, real estate, and other illiquid investments. Endowments that did well in the recent past (like Duke's) fared relatively poorly; endowments with only modest returns in the recent past were spared the dramatic losses. Still, the investment approach that Duke has taken over the years has resulted in billions of dollars of added value.</p><p>Largely because it's relatively young, with an endowment that doesn't reach back through the ages, Duke is less endowment-dependent than other universities. Endowment revenue funds about 15 percent of Duke's operating budget—tuition and fees, about 17 percent. Harvard's endowment provides 34.5 percent of its budget; Yale's, 44 percent; Princeton's, 48 percent.</p><p>Duke's relatively favorable circumstances also come from good timing, Trask says. "When this hit, we had just finished a very big cycle of construction. We had gone through an analysis a decade ago that said we hadn't done any significant building for the sciences for twenty years, for example. So we went ahead and did that building, we paid for it, and it didn't put a huge burden on the budget." By the time the Great Recession struck, "We had no holes in the ground. We had no buildings under construction that we didn't know how to pay for.</p><p>"Now, we'd love to get some capital projects going. And our ability to do that is going to be sorely tested over the next couple of years. Part of the reason is that people who might want to give you the money to do this don't have it either: It's not that universities have been selectively hammered in his economy. It's also clear to me that even if we get through this—and I think we will—what we have to understand is that the years of double-digit growth, double-digit earnings, aren't coming back anytime soon."</p><p>At a meeting of the faculty's Academic Council in late September, Trask said the university's decision to adjust its budget incrementally and over time might inadvertently signal something other than a sense of urgency. "People may begin to think the problem has solved itself. It has not."</p><p>That sober reality has meant that some things—but not all things—are changing in the way senior administrators see their roles. "The challenge in this job is always to try to make Duke a better place by innovating," says Provost Peter Lange, the university's chief academic officer for more than a decade and a political science professor. "That challenge changes when you have fewer resources overall. You have to start thinking about how you maintain that momentum. I happen to be a person who operates with a mindset that everything is a tradeoff. But now those tradeoffs become sharper."</p><p>The job always has required him to be learning constantly, "and in these times the amount of learning expands," he adds. "Each of us in the senior leadership has to have a fuller understanding of the whole university, not just of the part that we are directly responsible for. In this climate, interactions and interrelationships across the institution become more relevant."</p><p>For Lange, one of the most relevant concerns now is faculty renewal. "One thing I have been focusing on with the deans is trying to sustain a good turnover rate for faculty. How can you sustain a rate of renewal of your faculty when fewer of them are going to be offered jobs from other universities because the money isn't there, fewer of them are going to be attracted to retirement, and you're going to have fewer dollars to hire new faculty? If you take those things together, you can see a potential for stagnation of your faculty."</p><p> Duke's faculty hiring will be down this year compared with the last couple of years. Since recent years were unusually active, the current pace may not be all that different from historical norms. "The big opportunities are more likely to be at the junior level," Lange says. "There's much less hiring of junior faculty out there, so you can get access to those you may not have had access to before. And, of course, to the extent that you're still doing new things, that you're still innovating, that this still looks like an exciting place where morale is high and everybody is not hunkered down—well, you're just going to be more attractive to those faculty members."</p><div class="media-header "><img src="/issues/111209/images/crowd.png" alt="Illustration of figures" width="580" height="179" border="0" /><div class="media-h-caption"> </div><div class="media-h-credit"> </div></div><p>One of the deans working with Lange is Arts & Sciences' George McLendon, who is looking to remove about $12 million from a $300 million budget. At least half of that budget is fixed, or not "fungible"; the remaining budget is overwhelmingly dedicated to personnel. As a result, he says, Arts & Sciences will have to re-examine "our historical approaches to staffing," for example, by having smaller units combine their business operations.</p><p>Arts & Sciences is hardly in retreat. At least four faculty members moved from Harvard to Duke this academic year, in political science, African and African-American studies, cultural anthropology, and biology. Says McLendon, "I don't think they were worried about their livelihood. Harvard is not putting up signs saying, 'Lost our lease, everything must go.' Harvard is far from broke. I think it's just that Duke looks like a much more interesting place."</p><p>McLendon adds that Duke's "habits of efficiency" serve it well at a tough time. "Duke is used to solving problems creatively, in ways that don't always demand lots of extra money. And so we're better positioned than some places, where the easiest way to solve a problem is just to throw money at it until it goes away. That has never been a viable Duke solution."</p><p>Efficiency and ambition are twin themes for Tom Katsouleas, in his second year as dean of the Pratt School of Engineering. "We're one of the places that is still going up while a lot of our peer institutions, both public and private, are contracting," he says. "So this is an opportunity for us to more quickly realize our goal of being equal to those very best engineering schools."</p><p>Katsouleas says the school has come together in the spirit of "a consultative and open approach to addressing the budget shortfall, identifying priorities, and then getting back to the business of running a top-tier engineering school." Pratt wants to resist "being preoccupied with what we don't have."</p><p>In some ways, according to Katsouleas, the economic climate may put Pratt's efforts to take on "the grand challenges for the twenty-first century" in high relief. Meeting those grand challenges, he says, means engaging students with hands-on projects, entrepreneurial experience, international perspectives, and work in areas such as public policy, business, ethics, and human behavior, along with technology.</p><p> "This generation of students is motivated more than ever at all levels, from high school to Ph.D., to have an impact and to change the world. We're basically taking it as our mission to help them do just that."</p><p>Down Science Drive from the Pratt School, Blair Sheppard, dean of the Fuqua School of Business, is feeling the financial pressure from a mission that's notably global. (Fuqua calls itself "the world's first legitimately global business school." Its M.B.A. Cross-Continent Program, announced last year, has students studying in London, Dubai, New Delhi, St. Petersburg, and Shanghai as well as Durham.) Sheppard left his former Fuqua position as senior associate dean to create Duke Corporate Education in 2000. When he returned as dean two years ago, Fuqua's faculty ranks had increased by about thirty. "We grew like crazy in that period. And now it's a great market, but I don't have any money to throw in it."</p><p>In a move to help the school financially, each of Fuqua's two-dozen chaired professors— many of them with responsibilities outside the classroom as chairs of committees, editors of journals, and leading researchers—decided to "donate" one extra course this academic year. That allowed the school to cover the teaching needs of its new master's in management science program without having to hire extra faculty members.</p><p>Sheppard knows something about crisis management. The year after he created Duke Corporate Education, which provides customized management education to global organizations, terrorists struck New York and Washington. Because Duke CE is based on people traveling to conference centers—not an easy thing in the immediate wake of 9/11—the impact was appreciable.</p><p>In Sheppard's view, Fuqua can't afford to be anything less than global-minded. "Where is the next generation of faculty going to come from? Where is the really brilliant kid going to come from? If you had to make a bet, you'd bet it wasn't just going to be the U.S., right? And if you want to sustain quality, focusing on what will be an increasingly shrinking pie is really a bad idea.</p><p>"In tough times, quality matters more than ever. Quality is partly distinguished by the degree to which you're actually preparing people for the world they live in. And Duke is in the privileged position of trying to educate the people who are going to run the world. Can you say, China doesn't matter, India doesn't matter, Russia doesn't matter, the Middle East doesn't matter? I mean, it's hubris to assert that we could understand the world by staying in Durham."</p><p>Especially in a stressful period, a business school should want to be seen as an innovator—which, says Sheppard, is in keeping with Fuqua's history as something of an upstart. "The top five business schools have got bigger campuses than ours, more endowment, more famous faculty members, more alumni who give more money, and marginally better students who may find marginally better employment. One way you can join that set is to wait forever; you can wait to be a 400-year-old university. Or you can actually rewrite the rules.</p><p>"The time to rewrite the rules is when there's discontinuity in the world. We're clearly in a time of discontinuity. And the stakes are higher. You get global warming wrong, and you're really in trouble. You get pandemics wrong, and you're really in trouble. If you say our job as a university is to create knowledge as a value to society, how could we possibly not be doing what we're doing, even with a $125 million budget gap?"</p><p>In his Allen Building office, President Richard H. Brodhead can contemplate that $125 million matter while looking over a large swatch of the campus it affects. On this late September morning, classes are changing, and he can see a steady stream of students crossing the quad and buses pulling up to the West Campus stop. He doesn't see a particularly diminished Duke, he says. He mentions two milestones this academic year—the elevation of the Sanford Institute to a full-fledged school and the dedication of a major medical building at the Duke-National University of Singapore Graduate Medical School—as signs of an enduring institutional restlessness and resourcefulness. "We're not done with forward motion. There is still going to be plenty of it."</p><p>In public comments, Brodhead has also talked about a "smaller Duke." Higher education has enjoyed a long stretch of accelerated, and almost uninterrupted, growth, he says. The boom years might have seemed boundless. But that's not what historical perspective teaches.</p><p>"The first year I was hired to a faculty position, the year I got out of graduate school, was during a hiring freeze. There was a hiring freeze for something like six of the following ten years. People speak of the current circumstances as the greatest downturn since the Great Depression. But people forget that there have been many good years and bad years for universities.</p><p>"Two things have governed our philosophy in this situation. One is, let's deal with it as a real-world problem to be solved rather than as some hideous crisis. And two, let's protect our highest priorities. We don't have a faculty hiring freeze here. Why not? Because renewing the intellectual life of the place is among the highest priorities. And so is attracting the very brightest and the most eager and enthusiastic students. The Financial Aid Initiative was started in flush times. But part of my argument then was that you want to have permanent revenue to support a permanent commitment."</p><p>Brodhead says Duke won't be shrinking in physical size or number of students or visibility or ambition. The university is well-positioned as an intellectual leader on issues that have moved up the public agenda, including environmental policy and health care, he says. "Our core assets are more valuable than ever at this time."</p><p>Still, the momentum will slow in some conspicuous areas—among them, the New Campus, a massive building project conceived as encompassing academic programs, the arts, and student residences and meant to bridge the distance between West and East campuses. "I think the case for the New Campus is as compelling as ever, and I'm sure we will attract the means for it," he says. "Will we build it all in one fell swoop? Probably not. But that almost never happens in history anyway. Let's be realistic. It would be quite immature to believe one should be able to have everything one wants every day or every year."</p><p>It's easy to get used to prosperity, Brodhead says, to the point that it becomes an expectation, and add-ons or amenities become priorities. Now, he adds, "We don't have the means to invest in every wish. We have to test our ambitions a little more strenuously. But</p><p>the best things in universities aren't necessarily proportional to the amount of money you spend on them. Great universities don't only advance in times of prosperity. Some universities fail to advance even in times of prosperity. The fact that we have access to wealth guarantees nothing about the use the university will make of it."</p><p>Brodhead revels in a picturesque moment associated with the freshman class. Back in August, more than 1,700 of Duke's newest students had gathered on the East Campus quad for an annual tradition—the taking of a class photograph. Brodhead was on a platform 50 feet high above the T-shirted multitude, along with Duke Photography director Chris Hildreth. For the first time in memory, the event was threatened by storm clouds. But the result was an unusually dramatic image, and later, Brodhead noticed that a rainbow had formed—a good omen, even with no pot of gold in sight. And maybe a good omen not just for the class, but for the whole enterprise.</p><p>"The university has passed through a period where it had 9 percent growth in its budget year after year. That kind of growth is marvelous for certain things. Now we're passing through a period where we have to re-imagine ourselves with a smaller budget base. But you know, self-discipline is good for other things. It's good for making you have to think harder. It's good for making you match your resources with your highest priorities. That's what I think will be the story of these years at Duke."</p> </div></div></div> <h3 class="field-label"> Published </h3> <span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2009-11-30T00:00:00-05:00">Monday, November 30, 2009</span><section class="field field-name-field-main-image field-type-image field-label-above view-mode-rss"><h2 class="field-label">Main image:&nbsp;</h2><div class="field-items"><figure class="clearfix field-item even"><img typeof="foaf:Image" class="image-style-none" src="https://alumni.duke.edu/sites/default/files/dm-main-images/crowd.png" width="625" height="400" alt="" /></figure></div></section><section class="field field-name-field-issue field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Issue:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/issue/nov-dec-2009" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Nov - Dec 2009</a></li></ul></section> <h3 class="field-label"> Featured article </h3> No <h3 class="field-label"> Background color </h3> blue<section class="field field-name-field-sub-header field-type-text-long field-label-above view-mode-rss"><h2 class="field-label">Sub-header:&nbsp;</h2><div class="field-items"><div class="field-item even">For years, Duke has been on a high-growth trajectory. With declines in endowment returns and philanthropic giving, the university—like most of higher education—is adjusting to a challenging financial reality. </div></div></section> Mon, 30 Nov 2009 10:00:00 +0000 Joseph Sorensen, JOSEPH E. 18501202 at https://alumni.duke.edu Vital Signs in the Health System https://alumni.duke.edu/magazine/articles/vital-signs-health-system <div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"> <table width="98%" border="0" cellspacing="0" cellpadding="2"><tbody><tr><td valign="top"><p class="articletitle">Even as the university is looking to ever-tighter budgets, Duke University Health System seems to be a model of good financial health.</p><p>Fitch Ratings, a financial ratings service, recently reported that the health system enjoys a "very strong balance sheet and operating profitability, leading market-share position in Durham County, excellent clinical reputation, and association with its parent, Duke University."</p><p>For the most recent fiscal year, the health system earned about $155 million from operations. (But like the university, it did see a decline in assets—a loss of about $500 million.) According to the ratings service, outpatient visits grew by 8.6 percent, emergency visits by 6.3 percent, and surgeries by 5.8 percent.</p><p>Victor Dzau, chancellor for health affairs and president and CEO of Duke University Health System, notes that there's a "financial firewall" between the health system and the university. Still, there are administrative overlaps, and on many levels the health system is integrated with the university—particularly with the academic enterprises of the medical school and nursing school.</p><p>Whatever the eventual shape of health-care reform, there are likely to be changes in the government's reimbursement policies for Medicare, Medicaid, and indigent care. (Dzau says he wishes the national health-care conversation had focused more on enhancing the delivery of care and encouraging disease prevention.) Those changes will have a major financial impact on DUHS, Dzau says. But, he adds, DUHS is nimble enough to adjust. It has found efficiencies and synergies across its operation, in areas ranging from materials procurement to information technology. At the same time, DUHS has strategically grown into a large, integrated delivery system with three hospitals and affiliated clinics throughout North Carolina and other parts of the Southeast.</p><p>DUHS is now looking to physical growth, notably with a planned cancer center and surgery and critical-care center, together estimated to cost more than $700 million. "We have run out of capacity in a thirty-five-year-old facility," Dzau says. "If you look at the trajectory of population growth, health-care demand will always be there."</p></td></tr></tbody></table> </div></div></div> <h3 class="field-label"> Published </h3> <span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2009-11-30T00:00:00-05:00">Monday, November 30, 2009</span><section class="field field-name-field-main-image field-type-image field-label-above view-mode-rss"><h2 class="field-label">Main image:&nbsp;</h2><div class="field-items"><figure class="clearfix field-item even"><img typeof="foaf:Image" class="image-style-none" src="https://alumni.duke.edu/sites/default/files/default_images/dukmag-horizontal-placeholder.jpg" width="238" height="140" alt="" /></figure></div></section><section class="field field-name-field-issue field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Issue:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/issue/nov-dec-2009" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Nov - Dec 2009</a></li></ul></section> <h3 class="field-label"> Featured article </h3> No <h3 class="field-label"> Background color </h3> blue Mon, 30 Nov 2009 10:00:00 +0000 Joseph Sorensen, JOSEPH E. 18501201 at https://alumni.duke.edu Instituting Environmental Wisdom https://alumni.duke.edu/magazine/articles/instituting-environmental-wisdom <div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"> <table width="98%" border="0" cellspacing="0" cellpadding="2"><tbody><tr><td valign="top"><div class="media-header flr" style="width: 250px;"><img src="/issues/111209/images/111209-lg-fotosearchx18008071.jpg" alt="A Bald Eagle" width="250" height="420" /></div><div class="media-header flr" style="width: 250px;"><br /><div class="caption caption-center"><div class="caption-width-container" style="width: 250px;"><div class="caption-inner"><img style="border-top: 2px solid #fff;" src="/issues/111209/images/111209-lg-31105.jpg" alt="Debris in water" width="250" height="203" /><p class="caption-text"><br /><div class="media-h-caption">Photodisc by Getty Images</p></div></div></div></div></div><p class="articletitle"> </p><p class="articletitle"> </p><p class="articletitle"> </p><p class="articletitle"> </p><p class="articletitle"> </p><p class="articletitle">Created at Duke in 2005, the Nicholas Institute for Environ-mental Policy Solutions aims to be a resource for finding solutions to critical environmental problems. Its inaugural director is Tim Profeta, former counsel to Senator Joseph Lieberman of Connecticut; its founding advisory-board chair is William K. Reilly, administrator of the Environmental Protection Agency under President George H.W. Bush.</p><p>Conceived as a university-wide initiative, the Nicholas Institute operates in conjunction with the Nicholas School of the Environment, whose faculty members have a range of expertise in global change, ecosystem science, coastal ecosystem processes, environmental health, and environmental economics. The institute draws ideas from Duke Medical Center, the Fuqua School of Business, the Pratt School of Engineering, and the Sanford School of Public Policy. In assembling expertise, it also reaches out to partners in industry and government, environmental organizations, and other academic institutions.</p><p>The institute's key activity is providing policymakers with unbiased, scientific evaluations of policy risks and rewards. "In the short term," according to its mission statement, "the Nicholas Institute aims to fill a major void in the environmental-policy debate, by serving as an independent source of credible information that will be equally trusted by all parties and fully capable of bridging the divisions that too often today prevent progress on consequential issues."</p><p>Ultimately, the institute aims to be "the first call made by businesses seeking to craft workable strategies to address environmental problems; by policymakers seeking to understand environmental science and to draft balanced, cost-effective legislative and regulatory solutions; and by news media seeking the best thinking and most reliable data to inform an environmental article."</p></td></tr></tbody></table> </div></div></div> <h3 class="field-label"> Published </h3> <span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2009-11-30T00:00:00-05:00">Monday, November 30, 2009</span><section class="field field-name-field-main-image field-type-image field-label-above view-mode-rss"><h2 class="field-label">Main image:&nbsp;</h2><div class="field-items"><figure class="clearfix field-item even"><img typeof="foaf:Image" class="image-style-none" src="https://alumni.duke.edu/sites/default/files/default_images/dukmag-horizontal-placeholder.jpg" width="238" height="140" alt="" /></figure></div></section><section class="field field-name-field-author field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Writer:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/author/barry-yeoman" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Barry Yeoman</a></li></ul></section><section class="field field-name-field-issue field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Issue:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/issue/nov-dec-2009" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Nov - Dec 2009</a></li></ul></section> <h3 class="field-label"> Featured article </h3> No <h3 class="field-label"> Background color </h3> blue Mon, 30 Nov 2009 10:00:00 +0000 Joseph Sorensen, JOSEPH E. 18501200 at https://alumni.duke.edu Jellyfish Husbandry https://alumni.duke.edu/magazine/articles/jellyfish-husbandry <div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"> <div class="media-header "><div class="caption caption-center"><div class="caption-width-container" style="width: 580px;"><div class="caption-inner"><img src="/issues/111209/images/111209-lg-img0372rev.jpg" alt="Invertebrate investment: Andon eyes Blue Jellyfish specimens as he prepares to transfer them to a holding tank" width="580" height="240" /><p class="caption-text"><div class="media-h-caption">Invertebrate investment: Andon eyes Blue Jellyfish specimens as he prepares to transfer them to a holding tank. Peter DaSilva.</p></div></div></div></div></div><p class="articletitle">Jellyfish are like ocean-dwelling kudzu—fast-growing, pesky, and hyper-abundant. But take them out of the wild and they're even harder—and potentially, more painful—to keep as pets than some of the most expensive reef fish. That's where Alex Andon '06 comes in.</p><p>Last year, the founder of Jellyfish Art set out to overcome the four major obstacles to keeping jellyfish in home aquariums. After about a year of working with pipes, sea monkeys, and fishing nets, he has reduced the tricky business of jellyfish husbandry to an easily applied science.</p><p class="articletitle"><strong>A Desktop-Sized Ocean</strong></p><p class="articletitle"><em>Obstacle:</em> The ocean knows no bounds, and neither do jellyfish; these weak swimmers tend to travel wherever currents carry them. That creates problems in regular fish tanks, where they get stuck in corners or sucked into filtration systems. And special jellyfish tanks in public aquariums are prohibitively large and expensive.</p><p class="articletitle"><em>Solution:</em> Andon developed a cylindrical tank with a water-flow pattern that resembles a mushroom cloud. Opposing jets suck water into a filter while keeping the jellyfish and their tentacles animated in the center. In March, he expanded his offerings from three-foot-wide, $2,400 tanks to include a $250 desktop version.</p><p class="articletitle"><strong>Food for Thought</strong></p><p class="articletitle"><em>Obstacle:</em> Though jellyfish will sting almost anything, they're picky eaters. Every day, public aquariums hatch freeze-dried brine shrimp (a.k.a. sea monkey) eggs, soak them in an enrichment solution, and wash them before finally feeding them to their jellies.</p><p class="articletitle"><em>Solution:</em> Knowing most hobbyists don't have that kind of time, Andon developed a frozen food that's equally nutritious—and can be dispensed straight to the tank from a custom-made automatic feeder.</p><p class="articletitle"><strong>A Jelly Fido</strong></p><p class="articletitle"><em>Obstacle: </em>There are more than 300 species of jellyfish, but not all of them make good pets. Andon needed a species that was attractive, hardy in captivity, receptive to his frozen food, and, for his desktop tank, small enough to fit inside.</p><p class="articletitle"><em>Solution: </em>Andon pored over scientific journals and consulted with experienced marine biologists at public aquariums. He tested fifteen species in a tank in his apartment. Ultimately, he narrowed the list to a handful of species such as the Moon Jellyfish, a ghost-like blue or pink dome, and Pacific Sea Nettle, a mop of variegated orange tendrils that looks like a sculpture by Dale Chihuly.</p><p class="articletitle"><strong>Catch It If You Can</strong></p><p class="articletitle"><em>Obstacle:</em> Live jellyfish aren't sold at pet stores, or pretty much anywhere else.</p><p class="articletitle"><em>Solution</em>: Andon tried hatching and raising his own but found the process extremely labor intensive. In July, he wired $1,500 to a mysterious supplier in Sri Lanka but never received the promised batch of blue jellies. He now buys them from a reliable supplier in Japan and catches Pacific Sea Nettles himself using an inflatable skiff and fishing net in Northern California's Tomales Bay.</p><p>"With jellyfish, if you go to the right spot, there are just millions of 'em," he says. "You can just scoop up thirty at a time. They are overpopulated. It's almost the perfect animal to be going after."</p> </div></div></div> <h3 class="field-label"> Published </h3> <span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2009-11-30T00:00:00-05:00">Monday, November 30, 2009</span><section class="field field-name-field-main-image field-type-image field-label-above view-mode-rss"><h2 class="field-label">Main image:&nbsp;</h2><div class="field-items"><figure class="clearfix field-item even"><img typeof="foaf:Image" class="image-style-none" src="https://alumni.duke.edu/sites/default/files/default_images/dukmag-horizontal-placeholder.jpg" width="238" height="140" alt="" /></figure></div></section><section class="field field-name-field-issue field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Issue:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/issue/nov-dec-2009" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Nov - Dec 2009</a></li></ul></section> <h3 class="field-label"> Featured article </h3> No <h3 class="field-label"> Background color </h3> blue Mon, 30 Nov 2009 10:00:00 +0000 Joseph Sorensen, JOSEPH E. 18501196 at https://alumni.duke.edu Creating an Intellectual Climate https://alumni.duke.edu/magazine/articles/creating-intellectual-climate <div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"> <table width="98%" border="0" cellspacing="0" cellpadding="2"><tbody><tr><td valign="top"><div class="media-header"><img src="/issues/111209/images/111209-lg-illustrationdukemag.jpg" alt="---------------------------" width="580" height="113" /><div class="media-h-caption"> </div><div class="media-h-credit"> </div></div><p class="articletitle">This January, Duke will hold its inaugural Winter Forum, an annual three-day program aimed at increasing awareness of global issues among undergraduates. The forum, which grew out of the university's self assessment during the last accreditation process, was organized by the Nicholas Institute for Environmental Policy Solutions with support from the provost's office. Dean of Undergraduate Education Steve Nowicki says "the idea was to create a focused event on campus around a topic of global significance." This year: making the green economy work.</p><p>The forum's codirector, Brian Murray M.S. '87, Ph.D. '92, director for economic analysis at the institute and a research professor at the Nicholas School of the Environment, says the main topic will be global energy production. Several faculty members will be attending the United Nations climate-change conference in Copenhagen less than a month before the program, the results of which will be used as starting points for discussion.</p><p>Along with codirector Tim Profeta, Murray has assembled a number of professors from Duke's schools and institutes to work with students on exercises that will mimic situations found in the public policy and business sectors. In one exercise, students will create practical, entrepreneurial proposals for alternative-energy solutions and then have those proposals evaluated by a panel of faculty and industry experts.</p><p>Seventy-five students have signed up for the forum and will be returning to campus early from winter break to attend. Next year's event will be led by the Duke Global Health Institute.</p></td></tr></tbody></table> </div></div></div> <h3 class="field-label"> Published </h3> <span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2009-11-30T00:00:00-05:00">Monday, November 30, 2009</span><section class="field field-name-field-main-image field-type-image field-label-above view-mode-rss"><h2 class="field-label">Main image:&nbsp;</h2><div class="field-items"><figure class="clearfix field-item even"><img typeof="foaf:Image" class="image-style-none" src="https://alumni.duke.edu/sites/default/files/default_images/dukmag-horizontal-placeholder.jpg" width="238" height="140" alt="" /></figure></div></section><section class="field field-name-field-author field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Writer:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/author/aaron-kirschenfeld" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Aaron Kirschenfeld</a></li></ul></section><section class="field field-name-field-issue field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Issue:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/issue/nov-dec-2009" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Nov - Dec 2009</a></li></ul></section> <h3 class="field-label"> Featured article </h3> No <h3 class="field-label"> Background color </h3> blue Mon, 30 Nov 2009 10:00:00 +0000 Joseph Sorensen, JOSEPH E. 18501195 at https://alumni.duke.edu Making the Cut https://alumni.duke.edu/magazine/articles/making-cut-0 <div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"> <p><span style="font-style: italic;">It's not yet 8 on a sweltering July morning, and David Cutcliffe is in his oak-paneled office on the third floor of Duke's Yoh Football Center, looking for a story. Not just any story—a Paul "Bear" Bryant story. The legendary coach in the houndstooth hat was Cutcliffe's first boss, at the University of Alabama back in the early 1970s. Cutcliffe, then a student assistant in the Crimson Tide's football office, was already compiling the sayings and clippings and tenets of coaching that now spill out of the thick pile of manila folders he keeps stashed in a cabinet behind his desk</span></p><p><span style="font-style: italic;"></span>"Excuse the mess," says Cutcliffe, a meticulous fifty-five-year-old who mandated a clean-up of the Duke football program in the spring of 2008, shortly after he accepted what much of the college football world viewed as an impossible job. The clean-up was literal, as well as metaphorical: The new head coach excavated closets, threw out junk, renovated offices and hung pictures of some of the famous quarterbacks he has mentored. You may have heard of two of them: Super Bowl MVPs Peyton Manning and his little brother, Eli.</p><p>"I should have this," Cutcliffe says, talking and humming a little as he flips through his files. "I've got lots of stuff that I wrote down that Coach Bryant said. Lots of other things, too. Great quotes, notes I've taken at clinics, stuff I want to go back and re-read. I've learned to listen very well through the years, and I rarely forget something that I feel is important enough to remember."</p><p>Cutcliffe pulls out a piece of paper with the distinctive orange letterhead of the University of Tennessee. That reminds him of a different story. It was the first game of the 1982 season—his first game as a part-time assistant coach for Johnny Majors—and an upset-minded bunch of Duke Blue Devils, led by quarterback Ben Bennett '84 and offensive coordinator Steve Spurrier, came into jam-packed Neyland Stadium and knocked off the Volunteers, 25-24. The next day it seemed as if all of Tennessee was in mourning.</p><p>"That was a really devastating loss," Cutcliffe says. "Coach Majors was extremely upset. But I think there's a lesson in it. It's like in the backyard. You get some guys that are playmakers, and you put 'em in a position to have a chance to win. Don't overcomplicate it—that was Steve's approach. That's part of what we're trying to do."</p><p>The thing is, while Spurrier led Duke to some modest success as a high-powered offensive coordinator and later as head coach in the 1980s—including an Atlantic Coast Conference co-championship, in 1989—it never felt permanent. Duke last won more football games than it lost in 1994, and what followed was a rapid descent into the muck. Four winless seasons. A record of 4 wins and 42 losses from 2004 to 2007 under the youthful and enthusiastic Ted Roof. An ACC losing streak that had reached twenty-five games by the time Cutcliffe got to Durham. "We weren't down. We were basically out," Cutcliffe says. "We were without a pulse."</p><p>He ruffles more papers. "Here's something from Coach Bryant, right here," Cutcliffe says, handing over a list of ten bits of wisdom he'd typed up years ago. Among them: "Never be guilty of setting your goals too low"; "have a plan for everything"; "sell them on the values of pride and confidence."</p><p>It's not what he was looking for, but it helps account for some of the fundamental moves he's made. "A complete culture change," says receivers coach Scottie Montgomery '00. The former Duke player was the only holdover from Roof's staff to participate in last year's 4-8 season, which was hailed as the beginning of a renaissance. "It wasn't luck, it was a plan—a well-executed plan. We're not striving to be perfect. We're striving to be excellent. We're not just trying to win a game. In the past we did that, and yeah, we won a game. We won one game. We're trying to do more than that."</p><p>Cutcliffe began the makeover with his personal space. "You have no idea what this office looked like previously," he says. "I came in here, and this was ancient shelving, and over there was an old TV that was deeper than it was wide." Now, on a sleek shelf to his right, there's a wide-screen hooked up to a state-of-the-art video system.</p><p>"I don't want to have a prospect come in here and see anything other than the ultimate in facilities and character and class," he says. "I don't think anybody would expect anything different from us. We're going to have the cleanest, nicest locker room in the Atlantic Coast Conference. We're going to ultimately have the finest playing surface, the best practice facility. We're not thinking in terms of mediocrity as we grow Duke football. That's the difference between now and in how Steve did it. He came in, threw the ball around, and went on to a job at his alma mater. We're not trying to come in and be a flash in the pan and go on to something else. We're trying to commit to this thing, and to make it a way of life. That's how you build a program."</p><p>In an alcove across from his desk, next to a big picture window overlooking Wallace Wade Stadium, Cutcliffe has installed a shrine to Duke football history. There is a pair of plush leather chairs, which he uses when he talks to recruits. There's a bust of Wade, an idol of the Bear's (and not just for his hats), who arrived from Alabama in 1931 and coached Duke to six Southern Conference championships. A plaque commemorating the 1938 Iron Dukes—"UNDEFEATED/UNTIED/UNSCORED UPON"—rescued from a closet, hangs at eye level. "How proud is that?" Cutcliffe asks. "I am a little crazy about football. I think that's a sacred place out there. I think Coach Wade deserves respect."</p><p>It's nice to talk about 1938, but even 1988 (7-3-1 under Spurrier) is a distant memory for Duke fans. The years of losing prompted some reflection on campus as to why, exactly, a world-class university must strive to compete in big-time football. Putting aside the ACC's requirement that every member participate in all the major sports, Cutcliffe considers the question. "I haven't declared sports important," he says. "Our society has declared sports important. You can run from it, you can disagree with it, you can hide from it if you like. But if I'm doing the numbers from a business end, I'm going to attract better and brighter students—and more positive value comes to this university in curb appeal—if a very high-profile sport, college football, presents itself as excellent. Almost every aspect of this university was presented as excellent, except football."</p><div class="media-header"><div class="caption caption-center"><div class="caption-width-container" style="width: 580px;"><div class="caption-inner"><img src="/issues/111209/images/111209-lg-127309cutcliffe016.jpg" alt="Bring it on: Cutcliffe at a football practice." width="580" height="240" /><p class="caption-text"><div class="media-h-caption">Bring it on: Cutcliffe at a football practice. Jon Gardiner</p></div></div></div></div></div><p>His voice rises as he fires himself up. "We're an Atlantic Coast Conference university," he says. "You either get in, or you get out, right? You talk about winning, but, last year, I said the first thing we've got to do to win in the ACC is join the league. We're IN the league now! We're IN the ACC now, and everybody knows it."</p><p>Simply to be competitive—as Duke was, to some extent, last season (1-7 in the ACC, with two near-misses)—takes money. Cutcliffe, with his pedigree as a longtime assistant at Tennessee and six mostly successful seasons as a head coach at the University of Mississippi, reportedly has a $1.5 million-a-year contract.</p><p> It's the thirty-fourth-highest annual compensation among major college football coaches, tied with Penn State icon Joe Paterno's and far beyond what Roof or any of Cutcliffe's predecessors were paid. His assistant coaches are also being compensated at Southeastern Conference rates, which helped Cutcliffe bring most of his former Ole Miss staff along with him. Such financial largess pleases Bob Pascal '55, a Duke football All-American who went on to make a fortune in the energy business and real estate in Maryland. "A good football program is an expensive investment with an extremely profitable return," Pascal says. "I'm all in on this one. The coach needs it. It'll help."</p><p>Pascal and a friend, Steve Brooks '66, capped Cutcliffe's first full year on the job by donating a combined $10 million for an indoor practice facility within sight of the Hart House. The current resident, Richard H. Brodhead, has been known to stop by the adjacent fields to watch practice. "I've been disappointed in Duke football, like everyone else," Pascal says. "But his administration has made the commitment. I asked Brodhead this: Are you apprehensive about winning? Because when you start winning, there's going to be criticism."</p><p>Duke, really, should have such problems.</p><p>The man Cutcliffe has charged with bringing in the type of players who can win without blowback is a pleasant thirty-two-year-old named Kent McLeod, whose title, director of football relations, belies the fact that he organizes and executes recruiting, the lifeblood of any program. "At Ole Miss, a big part of my job was putting together an academic plan to get a kid eligible," McLeod says. "I don't have to do that here, because we wouldn't be signing 'em if they didn't have the grades."</p><p>Cutcliffe and McLeod decided that Duke should focus much of its recruiting regionally, rather than nationally, building relationships with area high-school coaches to help identify under-the-radar prospects. The Blue Devils' assistants were instructed to scout players they believe can develop into stars, rather than targeting only high-school All-Americans. While they've scored some key national signings—in late summer, they got a verbal commitment from Laken Williamson, a six-foot-five, 300-pound offensive tackle and aspiring premed from Chicago, who chose Duke over Ohio State—McLeod points with pride to the seventeen players on the current roster who hail from North Carolina.</p><p>"I don't think it's that hard to recruit to Duke," says McLeod. "The two negatives we get are, 'Don't go there, they won't win, or, if you do go there and they win, that whole staff is gonna leave.' Well, our answer to that would be, number one, we're gonna win, because nobody on our staff has ever been a loser. And the second thing is, why would you want to leave Duke, where the fans just want to win six or seven games right now—obviously, when you win seven or eight, they're gonna want nine, but we'll cross that bridge when we get there—to go somewhere you could be fired in a year for not winning?"</p><p>That's basically what happened to Cutcliffe at Ole Miss. He was the SEC Coach of the Year in 2003, and after a 4-7 season in 2004, he was gone—in part for refusing to fire some of his assistant coaches to appease the athletics department. He and his wife, Karen, didn't have much time to regroup. After accepting an assignment to coach quarterbacks for Charlie Weis at Notre Dame, Cutcliffe was diagnosed with a 99 percent blockage in a coronary artery. He underwent an emergency triple bypass and missed the 2005 season.</p><p>"Everybody said it'll make you appreciate every day, but I don't think it took me there," says Cutcliffe, who lost forty pounds through diet and exercise and takes Lipitor and blood-pressure medicine daily. "What it did was, it made me appreciate every quality day, and that every day can be a quality day."</p><p>When Tennessee coach Philip Fulmer offered him his old job back, as offensive coordinator and quarterback guru, Cutcliffe returned to Knoxville. It was an unusual move, but it allowed him to rebuild his health and enhance his reputation with two more bowl bids, increasing his career total as an assistant and head coach to twenty-three postseason appearances. His teams have won sixteen of those games, including a national title with Tennessee in 1998. (He wears his diamond-encrusted championship ring and displays an autographed photo of the quarterback on that team, Tee Martin, on a wall in his dressing room. It reads, "To Coach Cut: Thank you for making me a man.")</p><p>In December 2007, after firing Roof, then-athletic director Joe Alleva invited Cutcliffe to Durham for a visit. Determined to investigate the opportunity thoroughly, he drove overnight from Knoxville to Durham, arriving shortly after first light. "I enjoyed more than you can imagine an early-morning walk on this campus," Cutcliffe says. "I never had seen it. Seeing the chapel, walking through the quad when no one was there. I came to Wallace Wade Stadium, and I liked the way it looked, sitting there. I have never been more right about a decision in my life. Duke was ready for us. It was time."</p><p>Cutcliffe has been a coaching junkie as long as he can remember. His father, Raymond, who ran a grocery store in Roebuck, a racially mixed neighborhood in Birmingham, Alabama, died when David was fourteen, and the young man gravitated toward his football coaches at Banks High School. Cutcliffe was good enough to start at linebacker for the all-white school, and, in 1969, when he was a sophomore, his team faced all-black Parker High School in the first integrated football game in Alabama history. Banks won, 55-6.</p><p>Cutcliffe was an eyewitness to tremendous social changes in Birmingham and the rest of the South. His father's grocery store had separate bathrooms and water fountains for blacks and whites, as was required by state law. Earlier this year, Cutcliffe told senior Ben Cohen of <span class="pubtitle">The Chronicle</span> that when he was a boy, his mother made him hide in the basement when the Ku Klux Klan marched past their house. The Cutcliffes are Catholic, and his mother, Frances Cutcliffe, knew that Catholics were potential targets for the men in white sheets.</p><p>"My mother, who is eighty-eight, is a phenom," he says. "She probably went to school till she was twelve years old, and she is the most educated person I know. She understood the value of people and of diversity before diversity was a word."</p><p>As a young boy, David played pickup games in the streets against black kids he barely knew. "We weren't buddies," he says. "We just played ball. You gotta remember now, it was a different era. But I knew more about black kids than any of the guys I went to high school with. When we went in to play games against these guys, many of my teammates had never touched a person of another race."</p><p>Banks High was integrated by Cutcliffe's senior year, but not without incident. A football pep rally erupted into what he remembers as a full-blown race riot. "A couple of the older guys in the stands pulled out a Confederate flag," he says, " 'Dixie' was the fight song—you gotta remember the era. Some African-American young men took offense to it, and a fight broke out. It basically just erupted into a war. We had a running back who was a friend of mine get stabbed in the arm, and I remember running around there trying to get girls out the door. And there was pushing and shoving, and people were panicking. And when there's hate involved….</p><p>"Like I told you," he continues, "I wasn't raised that way. I had a girlfriend then, and I helped get her to safety, and then I was back in there trying to stop it. But no one could. It spread through the halls of the school. It was absolutely ugly."</p><p>With all that as his personal backdrop, Cutcliffe has spent years thinking about the evolution of race relations in America. "What I've learned from watching and being on both sides of the street," he says, "is that when you're unfamiliar with people, it's easy to let yourself dislike or hate. The problem that exists is being unfamiliar with each other."</p><p>Cutcliffe and his wife have an adopted son, Marcus Hilliard, who is black. He's one of four children who beam at visitors from a family photo that hangs on the wall of his office—daughters Katie and Emily, and their other son Chris.</p><p>Cutcliffe's sense of perspective probably would have eluded Bear Bryant, who didn't integrate Alabama's football program until 1971 and died in 1983. But Cutcliffe still looks to the Bear for insight into football's place on a college campus. That's the story he's been searching for, unsuccessfully, in the files on his desk. "What it's basically about is this," Cutcliffe says, paraphrasing. " 'Why is football important in this date and time?' Now you gotta remember, it's the 1970s when he's saying this.</p><p>"And he goes on to say, 'Well, I'll tell you why: When you get out between those white lines, everything is fair. Everything is equal. It doesn't matter what your last name is. It doesn't matter how much money your daddy makes. It doesn't matter what kind of house you came from. All that matters is what's inside you, and maybe this is the only place left where that really can happen anymore."</p><p>Cutcliffe looks up and smiles. "It's pretty dynamic," he says.</p><p>Saturday, August 14, is a quality day on Duke's new 100-yard outdoor practice field, which has been resurfaced with the latest in cushy fake grass, FieldTurf. (Before Cutcliffe arrived, the field was only seventy-five yards long. "No wonder we had trouble in the red zone," he cracks.) Never mind the H1N1 flu that's swept through much of the roster, forcing everyone to slather sanitizer on his skin and making Cutcliffe think twice about shaking the hands of a nine-year-old fan on the sidelines. It's the Blue Devils' first scrimmage, a 10 a.m. special, and Cutcliffe wanders the field shouting encouragement as the players stretch. If they're going to be able to lure students from the festive pregame tailgate, attract fans to enjoy the new bathrooms and high-tech video scoreboard, make good on senior defensive tackle Vince Oghobaase's preseason pronouncement that "being a Duke football player is now cool," it's all going to start right here.</p><p>"Gotta learn to focus!" Cutcliffe yells. "Every one of 'em counts. The circumstances are what they are. Get on that damn horse and ride!"</p><p>Three weeks later, his team will fail spectacularly in its 2009 opener against Richmond, missing field goals and botching punts and helping John Feinstein '77 make his point in a <span class="pubtitle">Washington Post </span>column headlined, "ACC Football Leads the Nation in Irrelevance." It won't be pretty, but Cutcliffe will accept the blame, and it will be clear that Duke is in for a long haul to where he's hoping to take it. (Mike Krzyzewski had that sort of experience in January of his third year on the job, when the basketball Blue Devils lost to Wagner College of Staten Island, N.Y.)</p><p>But on this Saturday, with the Blue Devils playing only each other, everybody wins. The veterans, such as Oghobaase and senior quarterback Thaddeus Lewis, look ready for prime time. The thirty-eight freshmen seem mostly capable. A junior named Jeremy Ringfield, moved to defensive end from receiver, intercepts a pass and earns praise from his coach. Kent McLeod is over on the sidelines, chatting up the parents of some Durham-area prospects. The punt coverage team chases one down and stops it from bouncing at the five-yard line, preventing it from going into the end zone for a touchback.</p><p>As Coach Bryant always said, "Winners take care of the little things," and in a post-scrimmage talk to his team on the field, Cutcliffe is clearly elated. "The games are hard," he says. "Practice is hard. It's not much fun out there right now. But we're going to have a lot more fun than most folks do on Saturdays."</p><p>That remains to be seen. Cutcliffe, though, has made plenty of believers. "Look at him," says Bob Pascal, watching from the sidelines. "He's ready to take the hill, baby."</p><p>It's an apt metaphor, because it will take a relentless struggle for Cutcliffe to do the impossible, to get this program bowl-eligible. "We're going to bring respect back to Duke football," he says more than once, "and anything that gets in our way, we're going to roll over it."</p><p>Presumably, at least a little bit like the Tide.</p><p><em><span class="byline">Scher '84, a former managing editor of </span>Baseball America<span class="byline"> and scoreboard operator at Durham Athletic Park, is a senior editor for </span>ESPN The Magazine <span class="byline">and ESPN.com.</span></em></p><p><span class="byline"><br /></span></p> </div></div></div> <h3 class="field-label"> Published </h3> <span class="date-display-single" property="dc:date" datatype="xsd:dateTime" content="2009-11-30T00:00:00-05:00">Monday, November 30, 2009</span><section class="field field-name-field-main-image field-type-image field-label-above view-mode-rss"><h2 class="field-label">Main image:&nbsp;</h2><div class="field-items"><figure class="clearfix field-item even"><img typeof="foaf:Image" class="image-style-none" src="https://alumni.duke.edu/sites/default/files/dm-main-images/111209-lg-142708virginia604.jpg" width="640" height="265" alt="Bring it on: Cutcliffe savors a decisive Blue Devil win over Virginia in 2008, breaking Duke’s twenty-five-game losing streak in the ACC. Jon Gardiner" /></figure></div></section><section class="field field-name-field-author field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Writer:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/author/jon-scher" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Jon Scher</a></li></ul></section><section class="field field-name-field-issue field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Issue:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/magazine/issue/nov-dec-2009" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Nov - Dec 2009</a></li></ul></section> <h3 class="field-label"> Featured article </h3> No <h3 class="field-label"> Background color </h3> blue<section class="field field-name-field-sub-header field-type-text-long field-label-above view-mode-rss"><h2 class="field-label">Sub-header:&nbsp;</h2><div class="field-items"><div class="field-item even">Now in his second year at Duke, football coach David Cutcliffe is aiming to turn his Blue Devils into an ACC powerhouse, drawing on wisdom, experience, and inspiration from icons like Bear Bryant, Wallace Wade, and the 1938 Iron Dukes.</div></div></section> Mon, 30 Nov 2009 10:00:00 +0000 Joseph Sorensen, JOSEPH E. 18501194 at https://alumni.duke.edu