A few beers with Professor David Juran21 min read

Brett Baptist, MBA Class of 2013

Brett Baptist: So you just got back from a trip to baseball Spring Training in Florida. Who’s your team?

David Juran: The Dodgers, but I haven’t seen them play in a long time. They used to hold spring training in Florida but now they do it in Arizona.

Did you grow up in Los Angeles?

Southern California, about 80 miles from L.A in a town called Redlands, which is east of L.A. and halfway to Palm Springs. I went to UCLA for undergrad – America’s team.

Yet you went to Cornell? Must have been a shock to the system to go from southern California to Ithaca.

DJ: That’s right I got my Ph.D from Cornell. So you go to undergrad at a big state school in a big city in a warm climate, and if you want to shake it up… [trails off]

BB:  Did you go straight into the program at Cornell?

DJ: No. I pissed away twelve years before I went back to school.

BB:  Also known as your corporate career.

DJ: Yeah, I like that… I call it pissing away 12 years, you called it my corporate career, and we’re both right. I don’t have any regrets about where I went to school. It was never the school’s fault. I had a great time, it just didn’t help me with my career much.

BB:  What do you mean?

DJ: I was a music education major. You’ve seen me draw a trumpet on the board, and on the last day of class sometimes I’ll play a song. But that’s it; I don’t really use my music knowledge much. A couple of years ago I was a guest saxophone player for MBA Jams. Were you here then? I thought they were class of 2011.

BB:  I wasn’t. So how many musical instruments do you play?

DJ: A music ed major has gotta’ learn ‘em all. I had to pass a test on every instrument in the orchestra. I won’t say I was that good but I had to pass the test.

BB:  What instrument is your favorite?

DJ: Saxophone.

BB:  Were you a jazz guy?

DJ: Most of the literature for saxophone is jazz stuff, most of the 20^th century. Unfortunately, Beethoven was dead before the sax was invented. It was invented in 1840. The really great classical music came before it. Some of the later romantic guys such as Debussy were aware and tried stuff but really no one appreciated the saxophone’s potential until the jazz guys.

BB:  Who do you look up to as musicians? Bird, Coltrane?

DJ: Well those guys are kinda depressingly good. You put on “Giant Steps” which is Coltrane’s breakout album. The first song, you get 30 seconds into it and you just hear all the saxophonists in the world just sighing with despair because they are never going to be that good. He became God. Before that, guys like Hodges, Lester Young – the style came out and then these other guys took it to this virtuosic level. Really no one else has come close. There are other guys who aren’t as listenable; Ornette Colman is just as innovative but impossible to listen to, just painful. It’s kinda like in classical music you have Mozart and Schaumberg. Schaumberg is just as intellectually great but you can’t listen to it, it’s excruciating. I’ve always been partial to music that normal people enjoy listening to.

BB:  I remember the lecture from your Operations course about your family’s historical contributions to the discipline of Operations, specifically your grandfather’s work. Doing some background research revealed that your family is extremely accomplished.

DJ: There’s really two people who get mentioned: my grandfather Joseph Juran, who was a famous consultant, author, and professor. He had a brother who was equally eminent in Hollywood and won an Oscar. He directed movies and television. The two of them are such inspirations for the family because they started with nothing and basically clawed their way up out of poverty. Didn’t speak English. There’s nobody I know who started with less than those guys and succeeded so much. It’s a tough act to follow.

BB:  Your father’s generation of the family was pretty accomplished as well. Not necessarily famous. But I’m sure there was pressure on you to be successful. 

DJ: There were different expectations. I’m sure students here felt something similar, because a lot of things have to go right to end up at such a great business school. You can make some mistakes and recover or start out in a hole and make up for lost ground. But generally the population here came from a family that stressed education, stressed achievement. Do your homework, get good grades – all that stuff you have to do. Because my grandfather was an immigrant who came here with nothing, he attributed his success to education and that was like a family philosophy. You will go to college. It was not up for discussion or debate. You had to be a weirdo in my family to not go to college. I added it up one time; my grandfather had four kids and I think ten grandchildren. So fourteen, and between them there is something like thirty-three college degrees. Insane.

BB:  And they let you pursue a degree in musical education?

DJ: I was the oldest grandchild and all the mistakes get made on the first one. Letting me be a music major at UCLA is probably not something that they would allow after me. And the result was predictable. I got out of school and I didn’t have a GPA to get into the graduate school of education, which you need a degree from in order to teach, so here I am with a music degree and I’m unemployable. My options were to go to some other school like Santa Monica College and get a teaching degree and then teach in the L.A. school system. So this has been a while, but in the early 1980s they were paying $10,000 a year for new teachers in the L.A. school system. And I was like, nah… So the stuff I went to school for I abandoned. Teaching just didn’t pay.

The part I was intrigued by that they didn’t teach was the recording business, the fading end of the analog times with the two sided tape and sixteen tracks. So I went to a month long thing at Full Sail, which has since become a blue chip place. They were not well known at the time and I got certified and I came up here to try and get a job as a recording engineer. I was stupid about that too. There are three places in the country where you can get a job doing that: New York, Nashville, and L.A., and I decided to move to New England. I got a job in Connecticut, and it was a shitty studio that didn’t’ last long. I was there about a year and then got into corporate stuff – the low level stuff they would hire a music major for – and I flailed around for twelve years. Picking a major is a stupid thing to ask a 17 year old to do – and I was a stupid 17 year old. What did I enjoy in high school? I liked the band, music, being outdoors. This was like 1977.

BB:  When you actually had good new music to listen to.

DJ: [Laughs] yeah, when I start up Spotify and it says ‘new music recommendations’ I give it about 30 seconds and then it’s just crap.

BB:  But back in high school you had Rumours…

DJ: Yeah Rumours by Fleetwood Mac, the first Boston album. I could make you jealous. [Pauses.] You had the Backstreet Boys. The thing is, all the shitty ones get forgotten. We had shitty ones too it’s just that nobody remembers them.

BB:  What are you drinking right now?

DJ: It’s a Sierra Nevada.

BB:  [To waitress] I’ll have what he’s having.

DJ: So I became a music major because that is what I liked in high school and thought I could make a career out of it. And my family was a bad influence there because my dad and grandfather made careers out of things that people hadn’t really made careers out of yet. So there was a role model: whatever you love just do it and the world will make you a career, and for me it didn’t work out, at least the first time.

BB:  I’ve wanted to ask you about something. There were some real heavyweight professors at NYU Stern, and that wasn’t something I knew until I took your course. Do you feel that our students are aware of Stern’s impressive intellectual pedigree? People like your grandfather Joseph Juran, Drucker…

DJ: And Deming. They promote professors, because we all know who won the Nobel and who was quoted in The Wall Street Journal. I guess part of this is that the school is known for finance and I would say Deming, Juran, and Drucker are more known for management and operations. So maybe because the school isn’t famous for that, it’s not what we promote. The truth is you have as blue chip a pedigree in my field at Stern as any university in the world. Nobody else has Drucker, Juran, and Deming. I suspect, maybe the saddest one is Drucker because he was the most general of the three. He’s talking about things that every business person should think about and we don’t talk about him enough. I’m going to mention him tomorrow; I have these people coming in from Liquidnet. It’s an alternative way to trade stocks. They have a partnership with Stern where we are creating a customized MBA. We give them everything they can fit into 48 hours.

BB:  It’s funny you bring that up, because I remember loving your lecture on how you invest.

DJ: The Lazy Portfolio?

BB:  Yeah, it hit home for me repeatedly during my education how much of a waste of time it is for even most MBAs to think they can consistently beat the market.

DJ: Most people investing don’t trust themselves so they hire an investor because they don’t really have confidence in their own thinking. That’s a problem for most people. Stern students tend to have the opposite problem, where they have too much confidence in their own thinking. There’s nothing to say that the average trader isn’t as smart as the average Stern MBA. So what can you do that these people can’t? They spend all day doing it and you can be as good but you’re busy, and the next best thing is to be participating. I can do my own analysis of betas and correlations and run solver. I don’t think I’m smarter than the market, I don’t think I ever will be, I don’t try to be. So what of yourself do you trust? People who know [about personal investing], and I’m not one of them, say that using different index funds is what you should do. Ride the market, don’t try to beat it.

Waitress: You guys doing ok?

BB:  Professor do you want something to eat?

DJ: I’m good, are you going to get another beer?

BB:  Absolutely. Let’s get another. So what led you to become a professor?

DJ: I started going to night school at the University of New Haven to get my MBA when I was 28 or 29. I looked around the office and didn’t think the people running the company were as smart as me. But they did have a business education. So I figured that would help me in my career. It took four years in night school to get my MBA and by the time I finished I realized that I actually liked this stuff, which surprised me because I always thought the worst thing you could be was a businessperson. I would rather be a musician. Then you realize everyone out of college goes into some kind of business.  So I liked it, and immediately after graduating I went to Cornell for another four years to get the Ph.D. I had a choice what to major in while getting my MBA and I was a marketing major for most of the four years. I worked at the Juran Institute, which was my grandfather’s consulting company, but I was not one of the consultants. I was low-level. My grandfather had retired so I was the only Juran working there and I asked the people, “What do I have to do to move up in this company?” and they said I need to study operations because it as was they sold, so I switched. I got two job offers: tenure track at The University of Hartford or visiting professor job at Columbia. And I wasn’t sure what to do because everything is about tenure track – risk reduction. I asked one of the professors and he said, “Don’t be an idiot, go to Columbia and hope for the best.” It turned out fine and within a year I was working at both Stern and Columbia. That first year they needed someone to teach statistics. The thing I’ve taught most is statistics; the only reward I’ve won was for teaching stats. That’s what I’m on Earth to do and it wasn’t revealed to me until I was 37 years old with a Ph.D in operations. There’s a good lesson there: whatever you think you’re going to do, don’t think you’re going to do it much because something else can come up.

Core stats is my favorite course to teach and I’ve only taught it once at Stern. The reason I like it, first of all, it’s important. You don’t’ have to debate that. Students know even if they hate it, they kinda just know that at business school you have to learn it. There’s more of a sales job with operations. There’s a little more friction. Stats is timeless. Once you’ve developed ways to explain stats to people you can use them forever because it’s the same problem to understand ten years later. Operations is moving and is a different discipline than it was fifteen years ago when I got my Ph.D. There are new issues, new topics. Some people say, “Well that’s exciting, why don’t you want to do the thing that is evolving and maturing?” Well, it’s more work and there’s more friction to convince people to take it. And I think I may be better at explaining stats. Smart people have a hard time getting their head around stats.

BB:  At least within my block, I noticed that we are not as probabilistic in our thinking as we might assume before taking stats. Stats can be counter-intuitive. So having someone teach stats who can explain it is so valuable.

DJ: There is a certain kind of person who can explain it well and not get bored with it. I think a lot of people who are really good statisticians – and I don’t claim to be one – it’s beneath them to explain things over and over again. It’s understandable that they get frustrated because they’ve explained it a thousand times. They could be doing some really cool research. I’m sufficiently dense that I still get excited about it every time.

BB:  In class you talk about craft beer. What sparked your interest in it?

DJ: There’s a club at Columbia called the Microbrew Society that mostly goes looking for different places to drink beer. Going back to a better time for funding of student clubs, before the dot-com bubble burst, it was routine at all the schools I taught at (Columbia, Stern, and Cornell) for Morgan Stanley or someone to come sponsor the beer blast for $60,000, rent out a room to use for interviewing and basically mail everyone an offer because there was such a demand for MBA talent. There was money washing around all over the place and clubs had it. There was a contest at Columbia, and you got $200 to buy equipment to try and make the best beer. It was a no-brainer. So I made some and it was decent and I just got into it.

Waitress: You guys doing ok?

BB:  Get him another one. Did you know that we study the beer industry in some of our classes? What kinds of beer do you like?

DJ: Well the cool thing is that [brewing is] actually so low-tech you can do it yourself. It’s not efficient but you can do it. There are so many different styles and flavors that the more you learn about it you realize that the Europeans figured this all out a long time ago. There are certain times of year when certain kinds of ingredients are best. In hot weather I tend to like pale ale. I recently got into sour beer. There’s smoke beer. A lot of the pleasures of life are reserved for the young, but there’s other stuff where it doesn’t matter how old you are, because the older you are the more affluent and the more time you’ve got on your hands to learn about all the different kinds of beer and liquor. That’s what makes being in your 50’s good. Not going to be running any marathons.

I’ve definitely thought about making wine like I have with beer. There are places here in the city where you can go help decide the blend. They bring in the fruit and equipment and you’re just making the decisions. So whatever it costs for a barrel of wine, which is hundreds of bottles, it’s cost effective.

BB:  I’m wondering what you think are the three main skills we need to have as graduates of this school. What do we absolutely need to know how to do when after we leave this place?

DJ: It’s weird, because school isn’t organized that way. School is organized in these disciplinary silos. It’s an artifact of how knowledge is created. Pools of intellectuals coalesce and realize, “Hey, we’re studying things that are very similar to each other,” and that gives rise to a Finance or Stats department. But it’s rare to find someone who was successful in business and good at one of those things and nothing else. That’s a professor. This is an interesting thing – I would say especially Stern and Columbia when compared against Harvard or Darden or Tuck – nobody here acts like they want to be a leader. I said ‘nobody’ and that’s perhaps too strong a statement. Seventy to eighty percent want to be dealmakers. They want to be a success by making deals, which is fine, but if you go to Harvard everyone wants to be a CEO. So back to your question, if you want to be a trader then it’s a smaller skill set. You do not have to get along with people; you don’t have to be in charge of anything. So let’s be more general and say that leadership is a part of this. I’m not a leadership professor but I’ve taken the class and there are two things in leadership – there’s getting the job done and keeping the team coalesced. And they call that task-focused and group maintenance. Those are the two main things, but what class did they teach you that in? Maybe some of the group maintenance stuff you get in a leadership class or in clubs, but I don’t know.

BB:  There are plenty of leadership opportunities in student clubs, but it is not a focus of the curriculum.

DJ: Columbia has the same problem. The similarities way outweigh the differences between Stern and Columbia in my view. People can be short-sighted if they take that view [of soft skills]. If you want to be at a company for any number of years you’re going to be in charge of people as you rise up. Quant skills cut across the organization, you need to be able to speak Damodaran and Juran – cost of capital and p-values – these are concepts to be comfortable talking about. I guess a good word for this is “numeracy”. You’ve heard of literacy – numeracy is knowing how to think and speak in numbers. Also, being able to work with people and knowing how to balance when to lead and when to follow – there’s no class on that but any time you work with a group you run into it.

BB:  Switching gears a bit, I’m wondering who were the biggest influences on your life besides your family.

DJ: In my case it’s hard to come up with role models who were better than some of the people in my family. Whatever heroic story you can think of, my grandfather kind of exemplified it for me because he started out poor and worked his way up and became a success. He was always honest and had integrity that no one else could live up to – it’s not entirely pleasant because it’s a tough act to follow.

BB:  But he could be a kind of a north star.

DJ: When he was my age he had already published several influential books – I have not. I could keep going. So you have to kind of put things in perspective.

BB:  Did you ever read his books?

DJ: Yeah, they are focused on certain management problems or situations. If you’re involved in a project and want a different perspective I think they make sense. But there were other people who were more entertaining writers.

I like Ernest Shackleton. I don’t know if you know him. He’s a British explorer and I read a book about him when I was a kid. Short story is, they went on an expedition to the South Pole and disaster struck. Ice crushed the ship and they became trapped in the Antarctic Ocean. They ended up being there for two winters and didn’t have enough provisions. Some of the guys had to break off and sail for help, so they took the lifeboat and sailed across something like 900 miles of ocean with no instruments, and they exactly landed on the island they were headed for, and they had to climb over mountains to get to the other side to get help, then get back to Antarctica! And nobody died! Total failure of a mission but this guy is one of the greatest leaders ever. Nobody mutinied, people did their job and accepted orders.

My kids and I have a downstairs “man room” and there’s a procedure to elect someone to the Man Room Hall of Fame. Right now there are four members –

BB:  Okay, I have to hear who the four members are.

DJ: Joe Juran, Nathan Juran the movie director, Joe Russa who is the patriarch on my in-law’s side, and Ernest Shackleton. We’ve got some nominees, and they have to wait a year after being nominated to be considered. Those are Jackie Robinson, mark Twain, fictional characters like Paul Bunyon… we haven’t voted on them yet.

BB:  Those are some solid nominees – quite a select group.

DJ: When my son came in with “Paul Bunyan” I was like what are you talking about? But then he listed the reasons: he dragged his pick behind him and created the Grand Canyon.

BB:  That’s more than I’ve done.

DJ: I have two boys, both around your age. One is a finance dork who will go to Stern if he can get in. he works in asset management and he’s fresh – 3 years out of college. The older one is going to law school. He’s actually more like me than his brother. They are both doing better than I was at that age.

BB:  Let’s close out this tab. One final question for you: what’s the next step for Juran? You want to stay teaching until you retire?

DJ: I love teaching, and I hope it shows. I also have a mortgage to pay off, but the financial stuff is gradually falling away. If I keep working a few years I will accumulate even more wine. But it’s also foreseeable that all those things will get taken care of and I don’t know what I would do if I wasn’t working. There’s a time of the year when a professor kinda sits around for a month or two and it’s not that good. You find yourself just drifting. So I have projects around the house or something interesting I want to investigate. You need something or your brain starts to rot on you. I think I will keep teaching as long as I can. But I’ve been very aggressive by teaching at three schools and I doubt that can keep up – I’ve been teaching 10 to 16 classes a year. Regular tenure track professors teach 3 or 4.