KM: How do you balance your research, teaching and consulting responsibilities?
JM: My best research ideas are derived from my teaching and classroom work and from my applied work as a consultant, or, more recently, as a corporate board member. My job is not just to do research, but also to publish, to convey information to a broader audience, which is a component of teaching. I would put much of my consulting in the same domain. As I perceive it, there is no distinction between publishing, standing in front of a classroom and consulting. They are all a form of teaching. Our job is to publish, but it’s not “publish or perish.” Our research means nothing unless we use it to educate a broader audience.
KM: How would you describe your teaching philosophy?
JM: I tell my students that, as a teacher, I actually do no work. They do all the work. I believe that learning is a job, and if they don’t do that job, if they don’t work, they will never learn. I try to help them learn, but I can’t teach them to learn.
I prefer the case method rather than lecturing, and use those cases as a tool to help disseminate knowledge. The notion is that people can’t learn unless they know the question; if the question doesn’t intrigue them or if they haven’t thought about it, then telling them the answer has no contextual frame of reference. The case presents a question, and we come together in the classroom to try to find an answer.
My hope is that I can encourage them to come to the same answer, which is not to say every answer is equally good, though I believe very strongly there are correct answers. What I’m trying to do is help students use accumulated scientific knowledge, boil it down, and apply those principles to answer a question. But they have to know what the question is before the answer makes sense.
KM: What are the most significant changes you’ve observed in the financial world during your career?
JM: Finance is the study of the way in which individuals and institutions interact in capital markets. Those capital markets have evolved tremendously over the last 30 years to include Russia, China, Japan and many others.
In a study of more than 17,500 authors and 29,700 articles appearing in leading peer-reviewed journals over the last half-century, John McConnell ranked third for total publications and fourth for publications by year. (Photo by Andrew Hancock)
The basic principles are the same –– people still want a risk-adjusted, fair return on their investment. The institutions, instruments and opportunities for trying to earn that fair return have expanded in ways that were not thought of 30 years ago. Perhaps the most profound change is in the area of self-directed retirement plans, which account for most individuals’ net worth and require greater financial literacy than employer-directed plans. These plans are changing the way people make financial decisions. I don’t think any of us fully understand yet what that means with regards to how capital is going to be allocated.
We’ve always taught about mergers and acquisitions. We’ve always taught about financial planning and corporate investments. There are costs and benefits associated with every transaction. In that sense, the principles haven’t changed. What has changed is the breadth of topics covered, particularly with respect to derivative financial instruments like futures markets and options markets.
There wasn’t an options market when I began my career, and now options trading rivals stock trading. There were no mortgage-backed securities when I started, and now they are used in many countries to provide housing finance. The landscape of finance continues to evolve, but the principles guiding it remain the same. Our role as educators is to try to help people understand how those principles apply in a broader contextual framework.