Rob Parson at Morgan Stanley (A)

WHERE?
- Morgan Stanley

WHO?
Rob Parson Paul Nasr Morgan Stanley (firm)

- hired by Nasr as Principal (knew each other from the past) with the - hired by president of Morgan Stanley as senior - one firm firm (lead with integrity, environment that fosters
teamwork and innovation, treating with dignity and respect).
understanding that he would be on the fast track to MD MD in Capital Market Services
Win the marketplace, think like an owner

- Young, proven track record, good with clients, ambitious and energetic. Tireless
worker (wants to turn world on fire) 10 years of experience. - highly regarded banker in a competing firm. - aim: exceptional level of performance. Be the world's best
investment bank for clients, their employees and shareholders.
Strong relationships with the important players in the banking and insurance 20years of experience
Change culture of the firm
industries.

- good with senior client management & works well to integrate team and use - historically weak at Capital Markets Services(=delivering
- good in building formidable capital market capital markets services to banks and insurance companies),
strengths to manage and develop clients. Good at keeping ppl informed, eager to
business goal to increase it. This was the reason why Nasr was hired,
help and subsequently Parson

- Believes firms should turn a blind eye to certain - 360 degree performance evaluation ("little consensus on
- very strong revenue producer (before him MS had a Market share of 2%, now behaviors, because the pursuit of the business
what it [the performance evaluation] meant in practice")
12.2%). High knowledge and expertise in the CMS field. Excellent at cross selling. and survival are more important. He sets the
He makes things happen that otherwise wouldn't growth of the Capital Market business above the "there was a cultural feeling, although ill-defined, that
someone had to be a "team player"
cultural vision and one firm firm approach

- Outgoing in his contact with clients, "creates needs for customers". Not easily - Uneasy because perceived by others as Parson's - unclear how serious and committed the firm is to the new
discouraged godfather/protector. vision

- amusing, entertaining and interesting (externally - client perception)

- not a good leader, does not give Rob Parson the
right feedback on time

Parson recognized that he needed to acquire some patience and be less

aggressive internally - treats Rob too gently (with kid gloves) fearing he
ight otherwise leave does not take new vision too
seriously.
=> can't handle well conflict situations?

- Unique in drive, ambition, in his pursuit of business, BUT also in how many eggs
he breaks every day. "When in bad temper junior staff analysts and secretaries
have been shocked by his language, temper, lack of respect to them and others".
Volatile personality

- should analyze things more in detail before making decisions,and have a broader
strategic view. At times he can be judgemental

- frustrated with ways things worked at MS ("form rather than substance"). Goal:
"to be in a senior leadership role in a client capacity, away from the headaches of
pure day to day administrative duties"

PROBLEMS
- Dilemma on whether to promote or not Rob Parson from Principal to Managing Director. Rob was hired with the understanding that if he did a good job he'd be on the fast track to MD.
' => Parson was hired to turn around Capital Markets and increase the presence of Morgan Stanley in this area (which he successfully does).
=> Nasr hired him, and believes that Pasron's entrepreneurial personality and track record compensate for shortcomings as a leader and team player, which implies that at the end of the day Nasr's interpretation of what
is more important to Morgan Stanley (growing market vs values) is behind the mess.
=> All this comes at a time where Morgan Stanley is transitioning (led by their president) to an environment that fosters teamwork and innovation (the latter being a strength of Parson) "We would like to maximize our
business, but not at the expense of our culture, teamwork, and the integrity of our business"
- Communication / Clarity issue: Mack, the president, sends what seem to be contradictory messages
On the one hand he seeks people who "shake up the culture" (hence Parson fits perfectly in this description) and on the other he wants to promote teamwork and innovation. Concerning the 360 degree performance
evaluation, which he introduced, there was little consensus two years later on what it actually means in practice.
If you really want a company culture to change, it should at the very least be crystal clear and you need to "hire and fire" based on that criteria

SOLUTIONS

=> Nasr should not have "almost implicitly promised the promotion to Parson", especially since he was new and did not yet know how MS worked.
To correct this, he should first seek clarity as in how strict the prerequisites are to promote him to MD (i.e. ask a fellow Sr. MD or Mack, the president, directly ) "there was a cultural feeling, although ill-defined, that
someone had to be a "team player".
As a second step he should speak with Rob to make clear how serious the situation is since the president himself is promoting teamwork and nice working environment. He should give him a realistic timeframe to
improve his weaknesses if he wants to make it to MD. Possibly there are coaching opportunities, Parson acknowledges his shortcomings, which is a good first step

=> Morgan Stanley and Mack should provide clarity to the whole organization on the new vision and its implications