Professor Keith Lumsden, who pioneered the distance-learning concept for MBAs at Edinburgh Business School, was also the inspirational figure behind the restoration of Panmure House in Edinburgh. Professor Lumdsen died on Saturday 9th November 2019 but he lived to see his dream of Adam Smith’s final home being re-opened by former Prime Minister Gordon Brown on Thursday 8th November 2018. A full interview with Keith Lumsden can be found in Panmure House Perspectives, Issue 2, 2018.
In 1959 Keith Lumsden went to Stanford University in California on a scholarship after graduating from the University of Edinburgh, staying on in the USA to complete a PhD. One of his tutors was Kenneth Arrow, who later won the Nobel prize for Economic Sciences. In Lumsden’s first class in public finance Arrow quoted Rousseau, and the young Scot had the temerity to put up his hand and question his knowledge of the French philosopher’s work.
That brashness earned Lumsden an invitation to see Arrow after class and in turn to an appointment on a short-term contract teaching quantitative methods. Lumsden was later invited to teach economics at the Stanford Graduate School of Business.
During his PhD he had developed an interest in how economics was being taught, and became increasingly dissatisfied with the methods. “It was an untouched field,” he said later. “There was something wrong with the way we went about it.” He began to immerse himself in programmed learning as a method in which the student self-taught through selection from options and learning from feedback. He also began to conduct rigorous experiments to establish how effective such methods were in comparison with alternative pedagogies.
His first efforts led to programmed learning texts in economics for schools; later he collaborated with colleagues to produce programmed learning economics texts for university-level teaching. These helped to lay the foundations for what would later become Edinburgh Business School’s (EBS) distance-learning MBA programme. The process was aided by Lumsden’s own knowledge and practice of what made good and effective teaching. He was an inspirational teacher throughout his career.
Professor David Teece of Berkeley was Lumsden’s junior colleague at Stanford and has called him one of the best teachers that ever walked the planet. A letter in The Times by Alan Thomson MP about Lumsden’s work led to the next chapter in his life and work. It attracted the interest of Paul Stobart, son of Esmée Fairbairn, and eventually an offer of a £50,000 research grant from the Esmée Fairbairn Trust if Lumsden would return to the UK for a year to carry out the research at a university of his choice.
There were several universities interested in hosting this novel research programme but a meeting with Professor Tom Johnston, who had taught Lumsden at Edinburgh University, proved decisive. Johnston was about to set up a new economics department at the city’s Heriot-Watt University and persuaded Lumsden that it could provide a suitable environment for his research.
Keith Lumsden was returning home. He had been born in Bathgate, West Lothian, and went to Bathgate Academy. His father was an entrepreneur and worked with Keith’s mother in a variety of businesses. He could be said to have been a role model for his son’s entrepreneurial approach to education.
Success in any venture can require many factors, two of which can be place and time. The Eighties were the right time for a pioneering distance-learning MBA degree, and in many respects Heriot-Watt was the right place. The institution encouraged and supported ambitious entrepreneurial thinking on the part of its academics at a time when such aspirations were often seen as running against the grain of traditional academic values.
Lumsden used basic economics, and the role of incentives, at Heriot-Watt. Each course writer was promised a royalty based on a percentage of the course fee paid by each student enrolled on that course — effectively payment for results. This was a controversial break with university convention but MBA enrolment grew rapidly after the introduction of the degree in 1989, and led to the founding of EBS in 1997. Bald statistics portray an astonishing phenomenon.
By 2010 the MBA programme had a global student population of more than 9,000. Almost all of them were in active employment and over the previous decade an average of approximately 1,000 had graduated annually. The Financial Times noted that it was now the largest producer of MBAs in the world, yet the 2010 internal telephone directory listed only 68 staff, at home and overseas. The students were examined in more than 300 centres in 156 countries and six languages.
Lumsden’s approach to employment issues was often idiosyncratic, ad hoc, serendipitous — and, more often than not, highly effective. It was also completely unacceptable by modern HR practice and guidelines. He would invite academics, administrators and even students to contribute to the programme, often on a short-term, part-time contract and not always in areas in which they seemed qualified. If the experience worked out, it could lead to a permanent contract and a career with EBS that many had neither sought nor planned. The university also expected EBS to carry out annual staff performance evaluations but Lumsden essentially ignored them.
All this was partly driven by his distaste for bureaucracy, partly by the success of EBS which encouraged rapid decision-making and shortcuts, but also by Lumsden’s instinct for judging people before thinking about what role they might play. Very little of this would have been possible in most British business schools, where bureaucracy could crimp innovation and MBA programmes were often seen only as cash cows. Lumsden, with Professor Gavin Kennedy, had arranged a quasi-autonomous relationship for EBS in relation to the university. For academic purposes it was part of the university, which awarded the EBS degrees, but it operated with a considerable degree of commercial and managerial independence.
The work of the 18th-century economist Adam Smith ran through Lumsden’s scholarship and teaching. Smith’s family home for the final eight years of his life had been Panmure House, an 17th-century townhouse in Edinburgh’s Canongate, but the house had fallen into disuse and disrepair and Lumsden bought it in 2008 on behalf of EBS. He envisioned a contemporary centre of learning, debate and enlightenment in the fields of economics, social sciences and moral philosophies, and a resource for students, scholars, businesses and the local community. The restoration was time consuming and expensive, but he lived long enough to see his vision materialise.
Pioneers can often be caught up by time and imitators, and towards the end of Lumsden’s tenure EBS faced growing competition from other online MBA programmes. He was proud of what had been achieved, but had little time for cultivating honours or recognition for their own sake. Economists often regard their discipline as something they do rather than something that defines them, but Lumsden loved the beauty, rationality and practicality of his chosen discipline.
Lumsden’s first wife, Jean, died in 2015 and he is survived by his second wife, Ruth, a friend of Jean’s, a son, Alistair, stepchildren and grandchildren.
When a new bistro was created in EBS it quickly attracted customers from all over the campus. It was suggested to Lumsden that the queues meant the quality must be really high. He immediately responded: “No — it means the price is too low.” Then he walked off, chuckling.