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Would you promote an employee who’s a top performer BUT mistreats their colleagues AND disregards company values and policies? It’s a dilemma that many managers face in their careers. And it raises questions about the accountability of managers for their employees’ behavior.
In this episode, Harvard Business School professor Nitin Nohria breaks down the issues at the heart of this classic case study. Nohria is also the former dean of HBS and he’s an expert in human motivation and leadership.
You’ll learn how to imagine different perspectives on this dilemma – from the problematic top performer to their colleagues — so you can best navigate the situation. You’ll also learn how managers should consider their OWN role in creating the incentives that motivate employees’ performance.
This episode originally aired on Cold Call in September 2020. Here it is.
BRIAN KENNY: It’s September 2020. And this month we’re celebrating an anniversary. Our fifth to be exact. Cold Call launched five years ago this month and during that time, we’ve discussed over 130 business cases, featuring dozens of Harvard Business School faculty, and reaching over a million listeners. To mark this special occasion, we’re pulling out all the stops. Yes, we have new theme music, but that’s not all. Our guest today is none other than Harvard Business School Dean Nitin Nohria, discussing a case he’s taught many times over the years about a rising star at a finance firm who is crushing his targets, but also clashing with everyone around him. First published in 1998, the lessons about organizational culture and employee performance underlying this case are more relevant than ever before. Today on Cold Call, we’ll discuss the case entitled, “Rob Parson at Morgan Stanley,” with Nitin Nohria. I’m your host, Brian Kenny, and you’re listening to Cold Call.
Nitin Nohria joined the Harvard Business School faculty in 1988 and has been dean since 2010. He studies human motivation, leadership, corporate transformation, and accountability and sustainable economic and human performance. We are thrilled to welcome you here today, Nitin, in our remote podcast studio, to celebrate a milestone. Five years and 130 episodes of Cold Call. Welcome.
NITIN NOHRIA: Congratulations on this extraordinary milestone for Cold Call Brian and I’m excited to be part of this moment.
BRIAN KENNY: The team is really thrilled to have you here. And I think this case is really interesting just on its own merit. I really do think that the underlying lessons that it teaches hold up really well today. So, I want to talk about some of the details of the case, but I also want to get your thoughts on the case method and why it works, and why certain cases endure over time. So, we’ll dive into all those things. But let me ask you to start the way I ask all my guests to start, which is what would your cold call be to start this case?
NITIN NOHRIA: I always taught by asking students: Would you recommend that Rob Parson be promoted or not to managing director? It’s a very simple question because the answer ends up being yes or no. People will sometimes hem and haw and one thing I’ve learned about a cold call is that everybody thinks that a cold call is just the opening question, but for me, a cold call is all the follow-up questions that lie behind the first question that you ask someone and an opportunity to really get one person to open up as many issues in the case as you can possibly get them to open up. So even though it starts with a simple question, depending on the answer, there’s a series of ways in which I would go down. If people say yes or no, I actually pause at that minute and I take a quick poll in the class. And I say, how many of you say yes? And how many of you say no? So that the person who’s been cold called gets a little bit of a feel for where the rest of the class is and I do too. And then I end up asking a set of follow on questions. Usually a cold call on this case for me will last no less than five minutes and sometimes can even be as long as 10 minutes.
BRIAN KENNY: Wow. But I think once people hear more details of the case, they’ll understand why that question is not as straightforward as it sounds, because it’s pretty complicated. You know, when I invited you on the show, I invited you to choose any case you wanted to talk about and you chose this one, and this is not one of the cases that you wrote. I’m curious as to why this was the one that you wanted to discuss.
NITIN NOHRIA: Cases are about how much energy a case can produce. So there’s something about the drama that happens in a classroom that makes us, as case method teachers, attracted to them. But more importantly, I think beyond the drama, because while the case method does have some theater in it, you also want to make sure that a case that you teach or becomes your favorite case has some very deep substantive lessons that are enduring. One of the wonderful things about this case is that while every case is a particular situation, what you’re looking for, I think what makes cases great is when that particular situation is something that every human being has experienced in their own life. I know of nobody who has had even two or three years of experience, whether they’ve just started as an individual contributor or have been a manager or a leader, who hasn’t encountered the Rob Parson prototype. The person who hits the numbers, is, in terms of all metrics that are business metrics, just hitting it out of the park, but at the same time rubs people the wrong way, is sometimes not viewed as a team player. In 360 reviews gets mixed reviews, so does great for the business, but may have a set of behaviors that don’t always fit with the espoused values of the organization. And the question is, how do you deal with these people? It’s a problem that every manager will face. And in some ways that’s what makes this case one of my favorites, because every audience that I know, you can ask the question, have any of you had a Rob Parson? And every hand goes up.
BRIAN KENNY: I’m not surprised. Reflecting on my own experience, I think that’s very true. And I should mention, by the way, the author, for this case, it was Diane Burton.
NITIN NOHRIA: She was an assistant professor in the organizational behavior unit. And it shows you that sometimes the very best cases can be written by someone who’s just starting off in their career. This was I think the first or second case. So even an early case that someone writes can sometimes be a classic.
BRIAN KENNY: Exactly. The case is named after Rob Parson. And we’ll talk a little bit more about him in a minute, but the protagonist is his manager, Paul Nasr. Tell us a little bit about the situation that Paul finds himself in.
NITIN NOHRIA: So Paul finds himself in this situation where Morgan Stanley, the company, has just introduced an important cultural statement where the company says that we want to be one firm and it has a set of leadership behaviors that it has articulated for the first time for its managing partners. And it’s conducted a 360 process that has been freshly introduced into the company. And the managing partner review process is not going to require not just traditionally what the firm focused on, which was the performance of the managing partner on business metrics, but how the manager has done in terms of being an example of the values that the company is trying to promote of teamwork and doing things in a way in which other people are being brought along. And you are an example of the values of the company, as much as the performance of the company. So it’s a relatively new system in the company. When Paul Nasr personally hired Rob Parson, the day he hired Rob Parson, he hired him to fix a broken part of the Morgan Stanley business. In the short period of time that Rob Parson has been in the business. He has not just turned it around, but he has made it into one of the best performing parts of Morgan Stanley. Paul Nasr himself believed that in the business that Rob Parson was given, some of the traditional ways in which Morgan Stanley operated may not have produced success. So perhaps he chose Rob because Rob was a person who might break some eggs along the way, yet get the performance fixed. So there is a certain sense in which Paul is culpable in this situation too. He chose Rob. He gave Rob the freedom to operate the business and to produce results. He has been very light in the feedback that he’s given Rob along the way. So probably Rob at this moment from everything that he has been interacting and learning from Paul, he expects to be promoted, and yet feedback that Paul Nasr, as he looks at the 360 says, this feedback is just going to make it so awkward for me to recommend that Rob be promoted because in Paul Nasr’s words, its amongst the worst 360 feedback that he had seen of any managing director that was being considered that year.
BRIAN KENNY: What are people saying about him that’s so awful?
NITIN NOHRIA: The generous person would say that he doesn’t suffer fools well. He goes out and he’s very demanding. He calls people out. So the people who are excited about promoting him say that, look, he’s just demanding performance of people, they should get a tougher skin. And others would say, no, there’s a way of demanding performance of people. You can’t bring people to tears. There’s evidence in the case that there are times when people leave meetings with him, close to tears, that he can act in a way that’s very brusque. What he wants, he wants right away. That there are processes and systems within the firm that have to be done. That if he thinks that they’re cumbersome or he experiences them as bureaucratic, he might just brush over them. There are examples of small amounts of money that are at stake, but places which look like they might even be stepping over the risk management frameworks that the company has created. So the 360 feedback is littered with… all the way from, I felt personally, just demoralized and beaten up, to, this guy, doesn’t even pay attention to company policies. It’s not like he lacks integrity, but if he views something as bureaucratic, he’s just willing to overlook it in the service of getting work done with his clients.
BRIAN KENNY: So, there’s obviously a lot of tension in this case. And Paul Nasr, by the way, has a lot at stake himself because people are going to be watching what he does and how he handles the situation. But it leads me to wonder what’s more important. Rob is crushing it with his targets. I mean, isn’t it okay to ruffle some feathers and bump up against the culture a little bit?
NITIN NOHRIA: So that’s exactly where this case produces so much tension. I have almost never taught this case in which about half the class doesn’t believe that it is absolutely the right thing to do to promote him. And the argument they make is exactly the argument that you were just leading us down, which is, Hey, it’s not like he lacks integrity. He’s passionate about the firm. In fact, there’s evidence that he’s a good collaborator, which is, he’s able to use other people in the firm whenever he needs to to get client work done. So it’s not a case in which this is just black and white. That this is a person who is at odds with all of the values of the firm. But you know, one of the most important values of the firm is to treat people with dignity and respect, and the people who are on the no side say, are we always going to put that line as just a motherhood and apple pie line? Or are we going to take it seriously? That if this firm is serious about all its values, you can’t say that because someone meets two thirds of our values and there’s this one value that is equally important we’re just going to compromise that value in return for performance. Some people say, what will be the signal that that will send? Now, you might have all this nuance about Rob Parson being consistent with some of the values and not with others. Some people say, well, if you promote him, all that other people are going to see is that all that matters in this firm is performance. You might as well tear up the value statement and throw it away. So are we going to have the courage to make this hard decision or not? Because if we don’t make this hard decision, we’re just going to send a signal throughout the firm that when push comes to shove performance trumps values. Both sides always recognize that we’re focusing on performance and values. It’s just this tension. Where do you decide to put the feather on the scale? Because he’s not someone who is inconsistent with all the values of the firm, but he’s inconsistent with some. But boy does he perform out of the park. And there’s people who say, maybe over time I can coach him. Maybe we can make him better. So people on the yes side of the ledger end up having this feeling that, let’s promote him now. And once he’s promoted, he’s always had a chip on the shoulder because there’s something about his background as well that features saliently in the case that he carries the self-image that he was not a “white shoe investment banker.” He didn’t have the same pedigree and background as other people at Morgan Stanley. So, some people say Morgan Stanley needs to be more capacious in its culture to be able to accommodate and live with people like this. Is it good to have a culture that’s so narrow? So, another set of questions that emerges in the cases that is this about style, or is this about values? Because people say style may be coachable, but values may be harder to coach. So, this is what makes this such a fabulous case because it’s a very nuanced case. This is not a black and white case at all.
BRIAN KENNY: It’s not even a long case. It’s only about seven pages long and there’s some exhibits there. But boy, the depth of it, it seems kind of bottomless when you start to dive into to some of these issues.
NITIN NOHRIA: What I love about this case, as you can also do a whole series of wonderful role-plays. After the cold call, if someone says to me, I’m going to say no. My follow-up question is that: Rob Parson has just knocked on the door and is standing at your door and says, I understand that tomorrow is the meeting, but you have to make a recommendation for whether I get promoted or not. You are going to recommend me, yes? And that causes the person who says that I’m going to say no to squirm because they have to now deal with Rob Parson. And if the person says, no, I have the exact same scenario. And I say, there’s a knock on the door. And John Mack is standing at the door and he says, look, I hear from some people that Rob’s your guy and you’re considering recommending him and saying yes. You do know that that would be a problem? Are you sure that you want to say yes to him tomorrow? So, you can create this bind where the person who’s in Paul Nasr’s shoes, you can make them feel the tension that they would have depending on whether you say yes or no. Because in one case you have to deal with Rob Parson, and so, for example, if you continue the side of the ledger of no, so the person says, no, no. I would say no. So, I said, okay, here’s Rob Parson, he’s knocked on your door and he says, Am I going to be under this or not. So, the person whom I’ve cold called would say, Rob, I just wanted you to know that I’ve been thinking about this. So, then I sometimes role play Rob myself. I say, tell me, Paul, are you going to say yes or are you going to say no? Paul hems and haws again and Rob says, that means, you’re saying no. And the door slams and he goes away and he doesn’t come back to work the next day. Now, what are you going to do? So, you can create a lot of tension and drama in this case, by just creating role-plays at various points in the case. And if it’s no, you can play John Mack or you can have someone else play John Mack. You could just set up some real tension and drama right in the room and all these issues come up.
BRIAN KENNY: Yes. And like great cases, there’s no right or wrong answer here. The conversation will yield, whatever it does, right?
NITIN NOHRIA: And that’s you know — we write the legend at the end of every case at Harvard Business School — is that this case does not demonstrate effective or ineffective practice. It’s just an opportunity to have a discussion. And in no case is that more true than in Rob Parson. I can tell you that I’ve had people five years later sometimes say to me, I still think that I was right, irrespective which side of the ledger they were. It’s an amazing thing how much people in this case seem to get invested in the decision that they make. I always ask about two thirds of the way into the class, whether anybody has changed their mind. Now that they’ve heard the argument of the yes and the no side. And I admire the 10% of the class that will change their mind in some way. But it’s also a case that reveals to me that this is the kind of thing in which our emotions and our own values get tied up in some ways. So, people get quite dug into their position in this case.
BRIAN KENNY: You know, one of the things, the case was written in 1998 we said, and obviously I’m sure our listeners are thinking, wow, I just encountered this situation two weeks ago or whatever. It clearly has stood the test of time. But I also wonder today with the values that millennials have, with the young workforce that we have, how would this scenario play out in today’s work culture?
NITIN NOHRIA: So, it makes no difference. I’ve taught this case as recently as last year to millennials and people who work in startups will often describe a founder who felt like Rob Parson or someone else. So, I don’t think that this case, even though it’s, by now 22 years old, has aged even a year, because the underlying issue is so enduring. If we had written this case when our first cases were written, and as you know, we’re going to celebrate a hundred years of case studies at Harvard Business School next year. The Shoe case, which was written in 1921, next year will be the hundredth anniversary of that case. That was the first case that you would recognize as a modern Harvard Business School case. It was just one page long. This is one of the things that makes case studies such a remarkable way to teach, right? Why have case studies endured for a hundred years of Harvard Business School? Because one, every case is about a particular situation. I think there are cases that capture things that are enduring and tensions that are enduring, the tensions that managers have to grapple with in the real world. There are concepts that you can teach to the case, like in this particular case, the tension between performance and values and what kind of culture do you create when those things are a tension, which is a very powerful set of conceptual things that you can teach about performance management, about coaching, about culture. So, there’s a series of things that you can teach in which research has been done. But what makes this case fabulous is that it captures a slice of reality that is an enduring slice, a reality that every manager will have to grapple with. We have many cases like this in our system and everyone who writes a case dreams that one day they will find a case that captures all of these things. I must confess that, the fact that I choose someone else’s case, I haven’t yet written one myself that I think quite captures that magic.
BRIAN KENNY: I’m sure we could find something if we looked hard enough. But this is a great case so I’m glad you chose it. But let me ask you, you’re known to have been a pretty demanding teacher. I don’t know if you knew that about yourself, but others have said that about you. I’m wondering if you have a favorite cold call story of your own. Something that stands out in your memory as the thing that epitomizes what the moment of a cold call was like?
NITIN NOHRIA: Very early on, when I first started teaching at Harvard Business School, I often joke that the students of course are all terrorized when a class begins about who’s going to get cold called. Especially when they just start at the School. So, I always had the privilege of teaching our LEAD course, which is one of the first courses that is introduced in the first year of the curriculum. So, I’ve had the privilege of being in a class, which was the first Harvard Business School class for students, many a time in my career. And somehow that first cold call, where a member of a section has been called for the first time ever. There’s something about it that people 30 years later, 40 years later will sometimes remember what the first cold call in that class was. It had that visceral a memory. So, we used to teach a case called, “Robert F. Kennedy High School” that Jack Gabarro wrote, who was the legendary case method teacher and one of my mentors in case method teaching, and not just mine, but a mentor of many of us in the organizational behavior unit who learned how to teach cases from Jack Gabarro. The case was about a principal who was inheriting a very troubled school. And the cold call would be that the principal has assembled the faculty in the school’s auditorium and is going to address them on the issues that the school faces. The cold call in this case would be that you’d find someone in the room and you’d get them to say, okay, what would you do if you were the principal? And the person starts talking, and instead of just letting them talk, 10 seconds into them talking, you say to them, no, no, no, no, no. Don’t just talk from your seat. Why don’t you come down to the front of the room and act as if these people who are your classmates were the faculty who were gathered in this room and conduct this conversation. It was a cold call that would last for about 15 minutes. I will always remember it. I taught this course for three years, and that was my favorite moment in the world.
BRIAN KENNY: It sounds terrifying.
NITIN NOHRIA: It was. And as a young assistant professor who was teaching for the first time, I can tell you that as much as the heart was beating of the person who was called down, if someone had put a gauge on my heart, just calling the person down and observing them go through this was making my heart pound as much as theirs. So, there’s something about a cold call that doesn’t just captivate and make anxious the students. In some weird way, I think there’s an anxiety and a nervousness that faculty members have as well that a cold call captures and brings to life.
BRIAN KENNY: A little empathy goes a long way in the classroom, I’m sure. Nitin, it has been wonderful having you on. I’m going to give you the option to answer one last question for us, which is, going back to the Rob Parson case, if there’s one thing you want our listeners to think about coming away from this case, what would it be?
NITIN NOHRIA: So, I think that in the end, while the case ends up being in students’ minds a lot about Rob Parson, the lesson that you want students to leave with, which is a lesson that is less controversial and deeply enduring, is the role that Paul Nasr had in creating this condition. So, it turns the focus away from the person who you view as problematic and asks you as the leader the question, what might I have done to create this condition? And what could I have done differently to avoid this condition? And now that I’m in this dilemma, what can I do going forward that can repair the situation? So, I think that that turn in the case, which is the turn from Rob Parson to Paul Nasr, to ask the question, what accountability do I have as a leader for the performance of my subordinate, as opposed to saying my job is simply to give them performance feedback. That every time that they’re giving performance feedback to a subordinate is also an occasion for you to be self-reflective about, how does their performance reflect upon you? That’s one of the most subtle enduring lessons that comes out of Rob Parson. And I hope that if people were in that class, they would take that away as much as the tension of, how do you manage a Rob Parson.
BRIAN KENNY: Great insights from a classic case. Nitin, I can’t thank you enough for joining us on our fifth anniversary episode. I promise not to wait five more years before I have you back on the show.
NITIN NOHRIA: Thank you so much for including me today. And again, congratulations on five years of Cold Call, and I hope there are many, many more years of this wonderful thing that will allow faculty members to share their favorite cases.
HANNAH BATES: That was Harvard Business School professor AND former dean of HBS, Nitin Nohria – in conversation with Brian Kenny on Cold Call.
We’ll be back next Wednesday with another hand-picked conversation about leadership from the Harvard Business Review. If you found this episode helpful, share it with your friends and colleagues, and follow our show on Apple Podcasts, Spotify, or wherever you get your podcasts. While you’re there, be sure to leave us a review.
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This episode was produced by Anne Saini, and me, Hannah Bates. Ian Fox is our editor. Music by Coma Media. Special thanks to Maureen Hoch, Adi Ignatius, Karen Player, Ramsey Khabbaz, Nicole Smith, Anne Bartholomew, and you – our listener.
See you next week.
