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Testing the mature student

By Peter Hahn

It has taken me three years of reading, researching, analysing and writing, but I finally submitted my PhD dissertation in December and am now waiting for my formal presentation or viva.

Not exceptional today perhaps, but I rarely meet other 50-year-old doctoral candidates in finance, who have also had substantial careers in the area. Of course, many PhDs pursue careers outside academia, but studying deals after doing deals is very different from the other end of the telescope.

I had a very diverse banking career on Wall Street and in the City of London, working in corporate finance, capital markets, credit, derivatives and structured finance. But, at the age of 47, with the last two years on Citigroup’s London operating committee, where as senior corporate finance officer for the UK I spent my time discussing staff reductions, Citigroup decided it no longer needed a senior corporate finance officer.

I considered other business opportunties inside and outside Citigroup, but after a few months I chose something that has always passionately interested me and decided to begin my PhD in the heart of London, at Cass Businerss School. I had expected that many bankers had made this transition and there would be a well-worn path to follow. I was wrong.

I recall a relatively recent MBA in my former business, who sent me off with the words: “Awesome, awesome! You’ll be great! I wish there were academics like you when I was studying.”

Looking back, “Awkward, awkward” might have been a more appropriate caution.

Selecting a business school for a PhD, two decades after taking an MBA at the Stern school at New York University, was an eye-opener. I found top business schools often have two classes of faculty: the ruling class is still determined by publication in academic journals, and the second class is made up of clinicians, practitioners and – seemingly the lowest of the low – teachers.


Before I had worked out this class structure, one academic in London told me that my experience would make me a good clinician and teacher, and nearly all academics I met discouraged me from becoming an academic.

When I began explaining that I was interested in studying for a PhD at their school, the responses – of those who did reply – often became downright hostile.

Reactions ranged from “We don’t like PhD students over 30” to “We don’t like PhD students with business experience” and “Most of our PhD students come without prior business studies”. One of my favourites remains “Business people can’t write”. And the majority of academics I wrote to did not even reply.

However, early on I was lucky enough to meet one of London’s top finance academics, Mez Lasfer at Cass Business School. He thought that my experience might provide some very different interpretations of business data than that provided by traditional academics.

I have returned to the world of business schools and found a realm that is more dynamic than ever. The enthusiasm of the students and future business leaders quickly made up for any of my early frustrations, including trying to catch up with some 30 years of financial theory and blend it with my experience.

Based on my research and experience I was awarded an academic fellowship by the Foundation for Management Education last April. Now, as the FME fellow in the faculty of finance at Cass, and a former “industry person”, I would like to see more academics with business experience, as well as business schools further integrated into the business community. Both notions have the strong support of the FME.

My faculty colleagues have helped me to think in a more scientific, logical and reasoned manner.

Although I will probably never reach their level, I realise that I fill a gap in understanding the way in which business leaders apply human strengths and failures in their financial decisions, perhaps in ways that can only be experienced and cannot be accurately observed. Together, we make a great team and can hopefully offer the students more than they expected at Cass.

For those considering a similar career path, a PhD is a lonely, time-consuming, expensive and often boring undertaking. However, if you are interested in your subject, the downsides disappear quickly. I also cannot overstate the energy that I derive from being around positive-thinking fellow students, 20 years younger.

Many business people lose their ambition by the age of 50 and focus on hanging on. My ambitions grow each day and having reached this far, no hurdle seems too high.

Now, with my PhD almost finished, an article under consideration at an academic journal and more than 80 appearances on worldwide TV and radio discussing corporate finance and banking, as well as beginning a fellowship, I find my path has been demanding, exciting and fun, albeit never easy.

My journey has been filled with uncertainty throughout, and that remains. There just are not that many new 50-year-old PhD or “substantial experience” paths to follow in academia. There should be more, but we do not seem to be welcomed by the academic establishment for more than window dressing.

For someone with substantial business experience (and substantial income to sacrifice), the doctorate path is neither an easy personal or economic decision to make, but it is not one that I regret.

Building on a strong foundation

The Foundation for Management Education was founded in 1960 to help the development of management education institutions, skills and knowledge in the UK.

Among the initiatives the FME funds are research projects and fellowships for managers who wish to develop careers in academia. It hopes that these in turn will lead to improvements in the quality and relevance of management education.

Under the umbrella of an academic fellowship, an experienced manager joins a business school and follows an agreed programme of development and training. The manager is to all intents and purposes a faculty trainee and will become a full member and contribute to all aspects of faculty work.

The FME has strong links with business schools, academics and management institutions such as the Advanced Institute of Management Research and the Association of Business Schools.

Peter Hahn will continue to write about his transition from banker to business school faculty member in the coming months


Lessons from school of life

By Peter Hahn (pictured below)

Published: May 4 2008 18:08 | Last updated: May 4 2008 18:08

Graduate business schools are a remarkable success story and their expansion globally is unmatched.

But I must add the caveat that before returning to academia, when I sat on the employer’s side of the fence, I increasingly came to regard the top schools as executive search firms for new managers, rather than “real schools” serving their communities. Indeed, a banker analysing investments in business schools might be justified in reasoning that the success of business schools is more the result of increased global demand for the product (new managers) than of the quality of the product.

No, I am not a rogue faculty member or pundit taking a cheap shot at business schools, but as I finish my PhD in finance and teach in the faculty of finance at Cass Business School, London, I think now may be the time to step back and think about what I am trying to accomplish as a new academic.

Having worked both on Wall Street and in the City, I know that my first suggestion to anyone thinking about an MBA or executive education would be to ask prospective schools: “What percentage of your full-time faculty have experience in what they teach?”

Peter Hahn

Surely there could not be a better measure. And shouldn’t employers seeking new managers who can quickly make a contribution also be asking this question?

You would probably be scared to death if your surgeon told you she had learnt all her surgery from a book, or only read about your required surgery in a journal.

Engineering professors will have run stress tests, but business schools? The point is not that you can be an excellent business school academic only by sweating the details on a deal that has hit a last-minute glitch, but that learning about such experiences should be as important in the business school process as understanding disciplined and thorough analysis: the mix of faculty experience should be critical to both students entering and employers hiring.

Yet in all the academic journals and academic career websites I have looked at, and the thousands of tenured or full academic job postings I have seen since returning to business school, I’ve never seen a posting that asks for substantial related experience – or any experience, for that matter. Yes, of course senior academic posts should seek candidates with teaching experience, but why is there no effort to seek business PhDs with related business experience?

Intellectual curiosity

The simple answer is that prospective MBA students and employers do not ask many questions about the skills on offer. I interviewed top business school graduates for almost 20 years and when I asked candidates how they chose their MBA school, the answers were typically league table, senior colleagues had come from the school, salary scales, location and name recognition. Few, if any, knew about the academics beforehand. There was not even a passing thought about the quality of research or teaching, although those are my ambitions as I start my faculty career. A few business PhD students have intellectual curiosity, but they are now mostly trained to produce research (the money can be good) over thought and ideas.

But intellectual curiosity of MBAs themselves? Apparently not: they are investing in or perhaps registering at some of the most exclusive executive search firms. While I have the benefit of career perspective and know what would be of most value later on the job, most prospective students just do not want to make a mistake in their school selection.

Am I disappointed? Slightly, but mostly I am challenged. Business provided me with painful lessons that the world is far from perfect and you must get the deal done as best you can by the deadline.

But there are almost always opportunities for making a difference. Working on financing a large investment for a big multinational some years ago, I noticed that changing the deal structure slightly would allow the assets to be tax-deductible in two countries rather than one, saving our client 10 per cent of the investment (an amount substantially more than the endowments of all the UK’s business schools combined). I recall that, after a moment of disbelief, eyes lit up around the room at the money at stake. In the lecture hall, when I recount my experience, mixed with the theory I researched while doing my PhD, I see students’ eyes light up in the same fashion. It is rewarding to see the sparks of understanding ignited andmy guess is that they will remember these discussions for much longer than pure lecture or case material.


It is a virtuous circle, as the more topical the discussion of my experience, the more the theory becomes real and students connect to it. For example, students see me commenting in the media on the UK’s troubled and now nationalised bank, Northern Rock, then ask questions, allowing me to relate the answers to what they have just learnt in capital markets and corporate governance.

But at many an academic conference I have been told rather bluntly by other academics that experience does not matter in academia. I have been told that if I want to succeed as an academic I need to focus on how many articles I publish, and in which journals. They also stress I should not bother with relevance – yet they also suggest success in publishing can lead to lucrative consulting.

Research may appear as discovery, but for an academic without the experience it is more about establishing subject credibility. I want to do more of it to enhance and better understand my experience and to be a better teacher.

In business, no matter how voluminous the research it can never replace experience. But the academic excellence of my colleagues has convinced me that decades of experience cannot provide a theoretical underpinning. The mix is everything and we cannot all do everything. Business schools should open their eyes and take notice. Change is also easier and less painful to implement when the going is good.

I think students, employers and communities need to demand more experienced faculty from their top business schools. Witnessing the current trauma in the City and on Wall Street, I feel as if I can almost touch where theory overtook economics (dare I say “experience”?). From mortgage lending and hedge fund strategies that were based on imperfect modelling, to tick-box corporate governance that provided little value to shareholders, experience has been undervalued.

My principal research interest is on corporate governance at banks, many of which seem to be desperately seeking more experienced boards of directors as they suffer downturns – perhaps a lesson to be learnt by business school faculties before it is too late.

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