Rob Parsons at Morgan Stanley

Memo to Morgan Stanley

To: Leadership at Morgan Stanley

CC: Paul Nasr

From: Tyler Manoukian ou

Date: September 21, 2019

Re: Analysis and Recommendations for handling Rob Parsons’ Performance

Comments: This memo addresses the key issues that Paul Nasr faces in order to make a fair decision

during Rob Parson’s annual performance review.

INTRODUCTION
This memo identifies the key issues and factors contributing to the atmosphere Rob Parson created at

Morgan Stanley (MS). In evaluating Mr. Parson, Mr. Nasr’s objectives are to: 1) Decide whether CMD

will put Parson up for promotion; 2) Complete evaluation and development summary; 3) Explain his

decision to promote or defer promotion; and 4) Give feedback and developmental advice (Exhibit 1). The

underlying factors are identified in Exhibit 3 and weighted against the key issues in Exhibit 2.

ANALYSIS OF THE PROBLEM

The factors below were derived from the decision criteria in Exhibit 2.
1. External clients loved him, while he had an internal negative reputation
Externally, Mr. Parson was a wonderful guy. Clients loved working with him. He was known for

providing solutions by identifying needs before they were needs. Internally, he irritated his colleagues

who viewed him as volatile and abrasive (Exhibit 5). He wasn’t a team player; he believed he was

always right. Gabarro and Kotter call this counter dependent behavior. Parson’s strained relationships

may have been because: 1) He was a hustler who did what he wanted on his own terms; 2) He was a

superstar who rose through the ranks of the corporate banking world rather quickly and was invited into

a situation that no one before him could solve; and 3) Parson was smart; he wasn’t afraid of sharing his

opinion, which made him loved by clients and despised by colleagues outside of the division. This

constant tug of war between his external and internal selves poisoned his reputation (Exhibit 4).

2. Positional needs conflicted with organizational expectations for the position

Nasr needed someone to improve the organizations weakness: delivering capital market services to

financial services firms. Nasr believed that Parson had the skills to reconcile this deficiency. Later Nasr

reflected: “If I’d hired him [later], I would’ve talked to him more aggressively about the differences

between him and the culture.” Clearly Nasr was flabbergasted. Parson was unique and ambitious, had

excellent knowledge of the markets, and connected with clients. His knowledge helped him catapult MS

from 2% to 12% market. Many of the job intangibles (thick skin, ability to get back up, not easily

discouraged) were traits that Parson embodied. Nasr needed these skills due to past failures. Finally,
 Parson’s counter cultural habits opposed the idea of one firm and MS’s mission, which was to meet the

global needs of clients at an exceptional level of performance.

3. Parson was intrinsically motivated according to Herzberg’s theory

Herzberg’s theory of motivation was present. Company procedures were the sources of Parson’s

unhappiness, an extrinsic factor. His responsibility, growth prospects, and development were the source

of his personal happiness, an intrinsic factor. Executives discovered that they wanted to bring in more

clients and revenue, but not at the expense of “culture, teamwork, and integrity of the process.” Before

him, the firm was unranked. His rapid success fueled his self-worth at the expense of corporate culture.

4. The 360 evaluation was the only factor used to determine his status
Business was through collaboration, inclusion, and teamwork. Parson’s position defied culture; instead

emphasis was placed on success. He had to be cutthroat, but evaluators during his performance review

stressed his lack of judgement and teamwork. Nasr remarked, “You do not impair the internal culture of

the firm just to get one extra deal.” There was little consensus as to what the 360 evaluation meant. Some

spoke of the ill-defined team player culture; there was no criteria to benchmark this goal; Parson was

brash: The payoff from a cutthroat mantra was more self-gratifying, than a positive evaluation.

5. Promoting Parson could “break a few eggs” within the organization

As a former managing director, Parson believed that breaking a few rules or processes to secure a major

client was above board. However, Nasr reminded him how important franchise and culture was. During

his tenure Parson “broke eggs” every day. The tendency for destruction along the path would certainly

irritate those who propagate MS’s culture, especially if he would be rewarded for his contrary personality.

After all, Parson was acting as the man he was hired to be, regardless of the fallout.

RECOMMENDATION & ALTERNATIVES

The recommendations (Exhibit 6) were optimal support of the key decision criteria (Exhibit 2).
1. Extend Parson’s development under the “Principal” title as a result of his negative reputation
The first recommendation is to extend Parson’s tour as a principal for an additional 6 months so he can be

trained and mentored in culture. Promoting Parson into a highly visible and influential would set a bad
precedent and erode corporate culture. A company’s culture is its lifeblood. Without buy and action from

senior leaders, culture suffers leading to off-mission goals. Any extensions period should come with goals

as well as tangible improvement in culture acceptance. Perhaps John Mack needs to intervene to become

a mentor to support Parson. This degree of involvement would encourage and empower him to adopt the

culture that Mack established. In accordance with this recommendation, decisions about the evaluation

process need to be made. During this time, Nasr might implement a mixed-model appraisal system.

2. CMD puts Parson up for promotion due to outstanding performance; client success
The second recommendation is for CMD to put Parson up for promotion because: 1) market share

improvement – Parson is responsible for his division’s jump from 2% to 12% market share; 2) Client

relationships – Parson proved to be a likable client success manager through innovative, creative

solutions; 3) Product knowledge – Parson is widely viewed as someone who understands his company’s

offerings, client needs, and the method for capitalizing on unrealized needs; and 4) Parson has done

everything his superiors have asked of him, albeit an unorthodox method.

3. Conditionally promote Parson; require benchmarks to facilitate adoption of culture

CMD puts Parson up for promotion immediately then implements culture enrichment training with

appropriate benchmarks to establish Parson as a team player that the organization desires. Nasr has

repeated its need for Parson. As a result, it has let him “break a few eggs.” It has also been accused of

protecting Parson and handling him with kid gloves for fear of losing him to a competitor or otherwise.

CONCLUSION
In conclusion and based on the most influential factors underlying the key issues, I recommend that the

organization extend his evaluation period for 6 months. Mr. Nasr will complete Parson’s performance

evaluation beginning with the scorecard shown in Exhibit 4, explain his decision to defer the promotion

based on the previously identified criteria, and provide feedback and development advice over the next

several months. Nasr’s mixed-model approach might begin with the open-ended problem-solving

interview and then end with the more directive tell-and-listen approach
Exhibit 1. Paul Nasr's Evaluation Objectives
Decide whether the Capital Markets Division will put Parson up for promotion
Complete evaluation and development summary
Explain his decision to promote or defer promotion
Give feedback and developmental advice

Exhibit 2. Key Issues Affecting Paul Nasr's Objectives and Factors

See Exhibit 3 for explanation of factors and the pros/cons.
Key Issues Weight
Parson's expectation of promotion due to outstanding performance 4
Conflict between role Parson was hired for and who MS wanted him to be internally/externally 5
Human compliance theory stating that a person will comply with guidelines to earn the reward 4
Reconciling (faulty) evaluation criteria 3
Organizational animosity towards Parson 2
Parson's expectation of promotion due to outstanding performance factors
Weig Job Tota New Stubbornne Percepti
Criteria Total Total Total
ht difficulty l opportunity ss on
Parson's expectation of promotion
4 5 20 5 20 2 8 4 16
due to outstanding performance
Conflict between role Parson was
hired for and who MS wanted him 5 4 20 3 15 4 20 5 25
to be internally/externally
Human compliance theory stating
that a person will comply with 4 1 4 5 20 3 12 3 12
guidelines to earn the reward
Reconciling (faulty) evaluation
3 2 6 3 9 2 6 4 12
criteria
Organizational animosity towards
2 3 6 3 6 4 8 5 10
Parson
TOTALS     56   70   54   75

Conflict between role Parson was hired for and who the organization wants him to be internally and externally factors
Aggressive
Positional
Criteria Weight over Total Total
Objectives
cooperative
Parson's expectation of promotion due to outstanding performance 4 2 8 4 16
Conflict between role Parson was hired for and who MS wanted him to be
5 4 20 5 25
internally/externally
Human compliance theory stating that a person will comply with guidelines to earn the
4 4 16 1 4
reward
Reconciling (faulty) evaluation criteria 3 1 3 1 3
Organizational animosity towards Parson 2 1 2 3 6
TOTALS     49   54
 Human compliance theory stating that a person will comply with guidelines to earn the reward factors
Extrinsic Intrinsic
Criteria Weight Total Total
motivation Motivation
Parson's expectation of promotion due to outstanding performance 4 4 16 3 12
Conflict between role Parson was hired for and who MS wanted him to be
5 3 15 5 25
internally/externally
Human compliance theory stating that a person will comply with guidelines to earn the
4 3 12 3 12
reward
Reconciling (faulty) evaluation criteria 3 1 3 1 3
Organizational animosity towards Parson 2 2 4 1 2
TOTALS     50   54

Reconciling (faulty) evaluation criteria factors

Evaluati Decision
Decision
Weig on as Tota Tota criteria Tota
Criteria criteria for
ht one l l across l
positions
factor divisions
Parson's expectation of promotion due to outstanding
performance 4 1 4 2 8 2 8
Conflict between role Parson was hired for and who MS
wanted him to be internally/externally 5 5 25 5 25 5 25
Human compliance theory stating that a person will comply
with guidelines to earn the reward 4 2 8 2 8 1 4
Reconciling (faulty) evaluation criteria 3 5 15 4 12 2 6
Organizational animosity towards Parson 2 3 6 2 4 5 10
TOTALS     58   57   53

Organizational animosity towards Parson factors

 Hazards of Evaluation
Criteria Weight Total Total
promoting Method
Parson's expectation of promotion due to outstanding performance 4 5 20 4 16

Conflict between role Parson was hired for and who MS wanted him to be
5 3 15 1 5
internally/externally
Human compliance theory stating that a person will comply with guidelines to earn the
4 2 8 2 8
reward
Reconciling (faulty) evaluation criteria 3 1 3 2 6
Organizational animosity towards Parson 2 4 8 3 6
TOTALS     54   41

Exhibit 3. Evaluation of Factors Contributing to Key Issues

Key Issue (factors below) Pros Cons
Parson's expectation of promotion due to
outstanding performance    
Parson fulfilled the role by forming Parson may not have been the best
1. Nasr needed someone to take a difficult job productive, positive relationships with candidate for the organization, as he
new and old clients has admitted
2. Parson wanted an opportunity to release his Parson was enthusiastic about working Parson was highly marketable, thus a
creative energy and propensity to get things done with Nasr again little arrogant
3. Parson believed his method was always
right; didn't always engage the team The firm was unranked in the financial Parson drew the ire of his colleagues
services segment by unilaterally making decisions
4. External clients loved him while internally Clients wanted to take him to dinner
his reputation was negative because he was energetic, amusing, Colleagues had a difficult time
and personable working with him
Conflict between role Parson was hired for and
who MS wanted him to be internally/externally    
1. Nasr hired an aggressive seller, not a His aggressiveness moved their market
cooperative player share in the financial segment from 2% Parson "broke a lot of eggs" in his
to 12% time at MS

The market coverage professional is

2. Positional needs conflicted with Parson embodied the requisite skills: the nexus of market, product, and
organizational expectations for the position "You need some aggressive client information and heavily
characteristics. You cannot be easily interdependent with others in the firm.
intimidated by clients. You cannot be a Not a lone ranger like Parson was at
person who is easily discouraged" times
Human compliance theory stating that a person
will comply with guidelines to earn the reward    
Parson believed that if he performed
well he would be fast-tracked to His ascension within the organization
1. Parson's extrinsic motivations were tied to managing director despite accrual could be seen as hurried and
career expectations years undeserved, despite his successes
Parson's belief in himself gave him
2. Parson's intrinsic motivations were self- confidence during "cut-throat Parson created a hostile around him by
serving in nature negotiations" undermining those around him
Reconciling (faulty) evaluation criteria    
1. Evaluation is the only factor in discussion
for promotion Metrics validated Parson's rapid Similarly, negative evaluations
ascension hindered him among Parson's peers
Parson's positioned required him to act
2. Decision criteria is the same for all positions Everyone gets a fair shake in this "up- outside of what the organization
or-out" culture wanted him to be
 3. Decision criteria is the same across Parson could be promoted for his client Nasr did not understand what the
divisions acquisitions and deals closed despite organization wanted from its
not serving the requisite 3 years employees when he hired Parson
Organizational animosity towards Parson    
1. Promoting Parson could alienate team
members This would give Nasr the chance to Could backfire; organization could
replace people with his own people turn on both Nasr and Parson
2. Some members of the organization are not Little consensus could lead to outside Little consensus makes agreeability a
convinced of the 360 evaluation the box thinking challenge
Exhibit 4. Summary of Perfomance Ratings
Overall rating was removed due to lack of explanation. Overall performance now reflected by the Arithmetic
Average. Direct Manager scores awarded based on summary of feedback in Exhibit 5.
Downward/Colleague Criteria Direct Downwar Colleague
Manager d Average Average
Score Score Score
1. Professional Skills      
A. Market and Product Knowledge 3.9 4.0 4.5
B. Analytical/Quantitative/Problem Solving Skills 4.1 4.0 3.8
C. Creativity 3.6 3.0 4.0
D. Initiative and Commitment 3.8 4.5 4.3
E. Judgment and Decision Making 3.0 3.0 3.8
F. Versatility 2.9 3.0 4.3
G. Oral Communication Skills 2.9 3.5 4.0
H. Written Communication Skills NA NA NA
I. Professionalism 2.7 3.0 4.0
2. Commercial Orientation      
A. Relationship Management 2.7 3.5 4.3
B. Cross-Selling/Selling 3.9 3.0 3.7
C. Commercial Instincts/Revenue Contribution 4.0 3.5 4.0
D. Enhances PBT/Expense Control 3.7 4.0 3.0
E. Adherence to Firm Policies/Limits 1.7 2.0 3.5
F. Deal Execution/Project Management 4.0 4.0 3.8
3. Management Skills      
A. Global Business Management 3.1 3.0 NA
B. Leadership and Management of People 2.9 3.0 2.5
C. Evaluation, Development and Coaching NA NA 2.0
D. Management of Diverse Workforce NA NA 2.0
E. Management of Firm's Resources 4.1 4.0 4.0
F. Time Management 3.3 3.5 3.5
G. Planning 3.4 3.0 3.7
4. One Firm Contribution      
A. Team Player Skills 2.4 2.5 4.0
B. Contributes to MS and External related community NA NA NA
Arithmetic Average 3.3 3.4 3.7
Exhibit 5. Summary of Constituent Feedback
Superiors Superiors Colleagues within Colleagues outside
Summary within IBD Outside of IBD IBD of IBD
Cross selling;
Knowledge of
product knowledge
clients; cross
identifying the
selling. Good
needs. Cooperative;
judgement and
Greatest Market/Produ Progress in willing to lend a
Creative
Strengths ct knowledge communication hand;
Areas of
Difficult to get a
Further More Aggressive
response; overly
Developmen Team player: communication approach. Judgement
busy
t volatile style improvement and teamwork

Exhibit 6. Solutions Weighted Against Key Issues

Weighting is based on total score from Exhibit 2
Extend
Developm Conditio
Offer ent as nal
Weig Promoti Tot "Principal Tot Promotio
Key Issues ht on al " al n Total
Parson's expectation
of promotion due to
outstanding
performance 4 5 20 5 20 5 20
Conflict between role
Parson was hired for
and who the
organization wants
him to be internally
and externally 5 4 20 5 25 3 15
Human compliance
theory stating that a
person will comply
with guidelines to
earn the reward 4 2 8 2 8 2 8
Reconciling (faulty)
evaluation criteria 3 5 15 4 12 4 12
Organizational
animosity towards
Parson 2 3 6 3 6 3 6
TOTALS     69   71   61