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Robert Brunswick:
Hello, my name is Robert Brunswick and I’m the chairman of Buchanan Street Partners, a real estate investment management firm. And I’d like to welcome you to our Counting Capital Podcast, which we’ve created to introduce you to real estate investing, investing at large, and individual businesses that we think would be worthy of your attention.
It’s my great pleasure to introduce you today to Henrik Cronqvist, who is the dean of the George Argyros School of Business at Chapman. So, with that, Henrik, good day. It’s nice to have you here. I’ve been looking forward to this.
Henrik Cronqvist:
I look forward to it as well. Thank you for hosting me today.
Robert Brunswick:
Absolutely. We’re going to have some fun. So, I think the best way for our listeners to get to know you is if we can hear a little bit about your past. I mean, I just note your pedigree, the Stockholm School of Economics. Most outstanding master thesis in finance. University of Chicago. Taught at Ohio State University. Joined Claremont McKenna. Visiting professorships at Yale. Professor of finance at Miami. My gosh, what a resume.
And you’re in our own backyard, our community here with Chapman College, it’s so great. But tell me a little bit about your career path. Is this a normal path for somebody to become a dean? Share with us your background, please.
Henrik Cronqvist:
What is interesting about my background is that I don’t come from an academic family, so I’m actually the first one in my family that went to college. So, then I pursued this wonderful academic career and I’m in the middle of it now, assuming the deanship at the Argyros School of Business and Economics, and being really pumped up about being back in Southern California and being at Chapman.
But it was a pretty long road for me, not coming from an academic background. My parents were Swedish, middle class family. We grew up in a small town back home in Sweden. And it was one of my professors when I did my master’s thesis, he was the one who really introduced me to an academic life, what it could be to have an academic career. And I was really inspired by him. He spent some time at MIT himself. And I learned from him about what it could be like to be an academic. That’s how it got started.
Robert Brunswick:
Yeah, that’s a great background frame for all of us. As I think about the skill sets of anybody when they find their passion and do what they do so well, what would you self-reflect on that is key as you think about your expertise, your aptitude that has lent itself so well to you teaching and now this deanship?
Henrik Cronqvist:
I think, I mean, while I don’t come from a family of academics, I come from a family with a lot of people that have worked very hard and that’s, I think, one of my skill sets. I’m very dedicated. When I do something, I want to do it well and I invest all my time and energy and efforts into the different projects that I do.
And as an academic career, now I’m the dean of the business school here at Chapman, but before I was a researcher and academic, then I had to publish, the saying is, “Publish or perish.” Right? And I went through that and I guess I published and that was a wonderful experience, but it’s tough. For many of the top journals that we have as academics to target and to publish in, the probability of publishing there is maybe one out of 20, or 5% chance to get your paper in there, in those journals. So, you have to really have the passion, you have to have the commitment, the drive. And I did that for a number of different years and I did it successfully.
And then, the next step for me was to have a bigger impact other than just the papers that I write and publish. Now I have an impact on a broader set of stakeholders from our students to our alumni, to our professors, our staff, and the community at large as well here in Southern California.
Robert Brunswick:
So, let’s talk about that. You set it up perfectly. What does it mean to be a dean? Because I think about if you’re a teacher, you’re playing the sport of football, you’re the quarterback, you get to control the game. Now all of a sudden, it seems like you’re moved to the sidelines as the head coach or the GM or the owner upstairs. You’re not teaching anymore, I assume. So, what does it mean to be a dean and what’s that role? Define that.
Henrik Cronqvist:
I think, for business people, the best way of understanding being a dean is sort of like being a CEO. At a private school, you have a P&L responsibility and you have to make sure that you do everything right from the marketing so that you get students into the different programs, you provide accurate information about all the wonderful things that will happen to our students when they graduate. That’s the marketing side of our business. But then there’s also, it’s the operational side of it, to make sure that you have efficiency, that you run the school in an efficient way. And so, it has that part of it as well.
And then the finance and accounting side of it, you have to make sure that you are in a robust financial situation. And so, there’s many different things that you have to balance as the dean. And the way to think about it is the CEO role. Also, we also bring in resources for our students. We do that not only through tuition, we’re a private school, so that is something that is important to us. But also fundraising, supporters in Southern California, in Orange County and beyond, that is sponsoring us, financially contributing so that we can do many things for our students. That’s also the responsibility that ultimately falls on the CEO or the dean.
Robert Brunswick:
Well, I bet you do well at that because you articulate the role very well. As I think about all the self-reflection on the ROI of your efforts to mankind or the particular role you have, do you feel you have made more influence and a bigger ROI as a dean than you might have as a teacher?
Henrik Cronqvist:
I mean, I think, for me it’s a natural progression of my career and I had a wonderful research career. I got an opportunity to travel around the world literally to most different universities that you have ever heard about, including some that you’ve probably never heard about, and disseminate and present, discuss, talk about the research in behavioral finance, which is my area. And I did that for a number of years and I got good at it. I was successful at that, but at some point I wanted to do something a little bit different and Chapman provided an amazing opportunity for me.
I’m entrepreneurial in my mindset and I like to innovate and to build something. Starting with a base that previous generations have built at Chapman and then take that to the next level. As a real estate guy, we had an amazing foundation to build on, but now it’s about building one more level and then another level and all the way up to the top rankings where we think that we will belong in a couple of years.
Robert Brunswick:
Excellent. I love the aspirations. So, as I looked at your Wikipedia, I thought about and reflected on your passion for research, your aptitude for research, and at a very high level. So, how do you satisfy that passion you must have had and moreover, that capability in the deanship?
Henrik Cronqvist:
Yeah, it’s tough. The day has only 24 hours and we need to sleep a few as well, right?
Robert Brunswick:
Right.
Henrik Cronqvist:
So, how do you do all of this? I think, I still try to be connected with research. Now also on the consumer side, if I’m not producing research myself, I try to consume the research that my colleagues that they are producing, which is wonderful, and try to feature and promote some of their research on our social media for the school or to get it out there to the general public as well.
What do I do personally? Actually, I’m still involved with a couple of different research projects. They’re mainly driven by my research team members. I try to do my fair share. I’m also part of editing a book right now that will come out later on, on fintech and blockchain and a few topics that actually I didn’t know too much about myself, but by being part of the team that is editing the book, I learned a few things. And at the end of the day, as a professor, as a teacher, as a dean, I went into this line of business because I love to learn new things, explore new pathways that people previously they may perhaps not have explored so much in depth.
Robert Brunswick:
Without putting you on the spot spot, is there a piece of research that you’ve written, authored, that you feel most proud of or that you can look back on and say that it actually had a contribution outside of its academic setting?
Henrik Cronqvist:
I think, yeah, so a couple of different, I would say, pieces, but each of the papers that we publish as academics, because it’s so difficult to create these and publish these papers in the top journals. Each of them are like your kids, so you like all of them as much, but maybe there are some that just happen to have a little bit of a bigger impact.
I would say, I wrote a number of different papers together with some of my collaborators on the topic of nature versus nurture.
So, what shapes you as a decision-maker in the domain of finance? Are you driven when it comes to taking risk? Is that because of nature, because you were born to be more conservative or born to be more of a risk-taker? Or, is it because of the family environment that you grew up in, the nurture part? And so, we wrote a number of different papers on these topics and they have been quite well cited by other academics and there’s also been some media exposure for these papers. And that’s been very rewarding.
Robert Brunswick:
You shouldn’t have brought that one topic up because I recently saw a movie about triplets, that they were all adopted by different families and these triplets all had a different nurture but all had the same nature and there was an outcome to the belief of one over the other. So, what was your outcome?
Henrik Cronqvist:
Exactly. So, actually, we find that it’s both nature and nurture because they are not exclusive. So, we find though that if you look at across a broad sample of different people, then about a third or about 30% or so of the variation in say, risk-taking across different people, that’s attributable to your DNA, to your genes, to the nature part of it. And to your point about the triplets, all of my work that I did worked on, we used data on identical and fraternal twins.
Robert Brunswick:
My god.
Henrik Cronqvist:
Actually, from my home country, from Sweden, because we have a very solid record keeping of all the twins in my country.
Robert Brunswick:
Shocking. I like the preciseness. So, now you mentioned Sweden, so it’s good transition for us. How much you reflect on your experience in growing up in Sweden and the educational system and process versus what you experience here in the US?
Henrik Cronqvist:
I mean, I think first of all, one of the differences is that when I grew up in Sweden, we had only public schools. So, I’m a product of the public schools in Sweden. I was very lucky to have several amazing teachers, starting in the first grade and who I stayed in touch with for a long time afterwards, because she was very influential for me as a young person, as a student. And so, I was a product of that.
And I always loved to study, learn new things. And that’s, I think, ultimately what led me to go to study economics and business and then ultimately then go down the academic pathway. But earlier in my life, I was considering, should I become an engineer or should I go into business and economics? At the end of the day, I think social science, I could relate a little bit more to that and that was more my passion rather than the engineering side. But I had an opportunity to work some of the work that I’ve done with startups and in venture capital space, I’ve worked closely with many engineers who are always inspiring to me with their ideas and with their precisions and eyesight on the details.