(Poets&Quants) — The day’s assigned case, “The Weekend That Changed Wall Street,” is meant to provoke a thoughtful discussion. It is a deep dive into the 2008 bankruptcy of Lehman Brothers, an event that shocked the financial world and helped trigger a severe global recession.
So the first question that finance professor Yiorgos Allayannis scribbles on the blackboard in classroom 190 at the University of Virginia’s Darden School of Business evokes Shakespeare: “To bail out or not to bail out.”
It certainly won’t be the only question asked on this Monday morning in late February, but it is the first one that MBA students in this highly popular elective course on financial institutions and markets must consider. Most of the students who raise their hands favor the government’s decision to let the investment banking firm go bust. Only eight students believe it was a mistake.
Cold calling one MBA after another, Allayannis draws out the arguments for and against a bail out of Lehman before delving into the intricacies of the commercial paper market and credit default swaps, which are central to the case. When he asks a student why the commercial paper market exists, Allayannis is given a fairly crisp definition: these are short-term loans used to cover inventory expenses, accounts receivables, and the working capital needs of investment-grade companies.
“That’s accounting language I don’t understand,” he shouts back. “I want feelings and emotions, poetry. If the market dries up, it will affect the GEs and the Intels of the world. There will be no salaries, no jobs, no company. Where is this stopping? In a park downtown,” Allayannis says dramatically.
A teacher’s teacher at a teacher’s business school
The 46-year-old, Greek-born professor looks a little like a young Clint Eastwood. He’s trim and tall, just over six feet, with a friendly, angular face and light blue eyes. In the classroom, he moves around like a human tornado, whirling this way and that, up and down the tiered steps in the center of the class, waving his arms in the air. At times, he is nearly breathless and perspiring.
“He starts by drawing you to the edge of your seat with a remarkably passionate and engaging teaching style, and then he keeps you there by driving you to make and defend specific, time-critical decisions rather than accepting easy generalizations,” says Nathan DeLuke, who graduated from Darden last year.
There is no doubt that he is a master teacher who can make finance — not the easiest of business school subjects — compelling and entertaining. Great teachers are common in many business school classrooms from Harvard to Northwestern. But they are especially common at the Darden School, the only B-school in the U.S. to score in the top 20th percentile of BusinessWeek’s student satisfaction surveys over 24 years for exceptional teaching.
Allayannis is one of many superstar teachers at Darden, and his evolution here shows how this school has made teaching an integral and defining part of its culture. That wouldn’t be such a key distinction except that the faculty at most business schools are so thoroughly focused on research that the quality of their teaching often is inconsistent and altogether mediocre, even at schools that regularly top rankings.
That’s largely because most schools hire and promote faculty on the basis of their publication in scholarly journals that are largely unreadable. Teaching skill tends to be a nice-to-have attribute in a professor.
But at Darden, where instruction is based largely on case studies of challenging business issues, teaching is a must-have part of the life of an academic — equally important as research. “Teaching is at the core of the institution,” says Allayannis. “It forces you to be the best that you can be because your colleagues are such tremendous teachers.”
It’s telling that on his CV, Allayannis lists his teaching credits and honors — mostly for exceptional teaching — before his journal articles. It is a long list. He is a four-time winner of Darden’s Outstanding Faculty Award given by students. Five graduating classes have elected him Faculty Marshall, a prestigious honor given to only two professors a year. Allayannis won the distinction of leading the graduating students in 2002, 2004, 2005, 2009, and 2010. And last year, Darden’s Alumni Association recognized him as a master teacher who “excels in the classroom, shows unusual concern for students, and makes significant contributions to the life of the university.”
“Yiorgos is considered a ‘rock star’ in teaching among students at Darden,” says Robert Bruner, dean of the business school. “His classes are always oversubscribed, and each one is memorable.”
As good as he is in the classroom — and his student evaluations average 4.8 on a 5.0 scale — Allayannis takes nothing for granted. Although this is the sixth time he has taught the Lehman case in the past three years and it’s one of 11 of 15 cases for the course he has written himself, Allayannis awoke early on the Sunday before class to review it. He spent at least two hours working on all the key points over his morning coffee in his favorite chair in the corner of his home’s sunroom, with his feet plopped atop an ottoman.
His wife, Sarah, was still asleep. Good thing. Even she wonders why he works so hard — typically four hours of preparation per case — when he already is intimately familiar with the details. During the early years, Allayannis could invest three or four days to prepare for a case. Now it can vary between two hours or an entire day. “Haven’t you taught this case before?” his wife will often ask.
Allayannis’ response: “If you have someone who is a very good athlete, do you know how often they must train? The people who are very good at what they do work extremely hard, and preparation is everything.”
From Greek lumber and engineering to teaching finance?
Allayannis was not born into the profession. His father ran a lumber business in Greece started by his grandfather. His mother, who died the year he came to Darden in 1996, was a housewife. Jokes Allayannis: “The first generation builds the company. The second grows it and the third one destroys it. And now you know why I am here teaching.”
He found the first sign that he was destined to teach while earning his undergraduate degree in electrical engineering in Greece at the National Technical University of Athens. He found he very much enjoyed tutoring students in different subjects and had a knack for it.
Soon after graduating in 1988, Allayannis came to the U.S. for his MBA at the University of Massachusetts. Instead of landing a job in consulting or investment banking, however, he decided to pursue his PhD in finance at New York University’s Stern School.
The first time he walked into a classroom to teach was in 1995 as a PhD student for an undergraduate class in finance. He was a natural, winning an award for outstanding teaching from Stern students within a year. “I enjoyed that very much and the experience solidified it for me,” he says.
Armed with his PhD in finance, he joined the Darden School in 1996. With the exception of a two-year stint as an investment banker at Citi
in New York, from 2005 to 2007, he has taught at Darden now for 13 years. When he started at Darden, Allayannis was often observed by Robert Bruner, who was then a professor with a reputation for being one of the world’s best case study teachers in finance.
Allayannis was teaching Darden’s first-year core course in finance, and Bruner strolled in and sat in the back of the classroom. “Bob wrote all the questions I asked the students in the case,” recalls Allayannis, who says he spent many hours in Bruner’s classes watching him teach. “Not only that, he even saw whether I was going more to the left or the right when I was pacing.
“The biggest piece of advice I received was when he showed me all the questions I had asked in the class. ‘You see these questions,’ he said. ‘You asked what, what, what and what. Your first how question was asked almost an hour into the case.’ It was tremendous feedback. It took three years, I would say, to get to a level where I felt things were clicking.”
Years later, he takes great pride in returning that favor. “We try to coach and guide and share wisdom with our younger colleagues. I tell them if you mess up the first class don’t think, ‘Oh my God.’ Think about what you are going to do to fix this without dragging yourself down too much. Just move on.’”
Keeping the conversation moving
Back in class on Monday morning, Allayannis is pushing and challenging his students.
“Do you guys remember where you were that weekend, the weekend that changed Wall Street?” he asks.
The professor tells his students that he was visiting his family in Greece and was on his way to the beach when he heard the news.
Answers one student rather lamely: “I can figure out where I was.”
“That’s a cop out,” Allayannis shoots back, unsatisfied.
To one relatively subdued student, he barks: “You’re very quiet today. Are you snowed in?”
But he keeps the conversation moving rapidly, calling students out by name and asking one question after another. He’s frequently connecting issues in the case with previous classes and referring students to one of the seven exhibits — charts and tables — in the Lehman case study.
Throughout, he’s self-deprecating and humorous. He calls credit default swaps — a financial instrument that insured investors against loan defaults — “the iPad of Wall Street innovation. Everybody had to have it, and yet it was thought of as the dark matter of the universe, Wall Street’s worst innovation.”
His best advice to the younger colleagues he mentors? “Let your instincts drive you and then always ask yourself, ‘How do I get better?’ Nobody can be a good teacher without effort, even if you are a natural born teacher. It’s impossible.”
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