Harvard Business School 9-498-058

February 9, 1998

Rob Parson at Morgan Stanley (D)

Reflecting on the past year, Gary Stuart came to the conclusion that Rob Parson should be
promoted. He considered his other direct reports and colleagues and thought:

People will understand it. They’ll understand he has tempered his behavior;
he has a tremendous commercial contribution, and the combination of those two
things puts him in a league where he should be a managing director here. A year
earlier, the answer would have been, “No.” His behavior was just too outlandish to
be sanctioned in any way. But this year, people will support it.

By the end of 1996, Parson had generated millions in revenues on a desk that had historically
been break-even. He had been the catalyst for dramatic improvement in market presence and showed
an ability to generate new business by bringing in over 13 “first-time” clients to Morgan Stanley. His
client relationships, both in breadth and quality, were perceived to be a path for continued revenues.
Finally, his diligence in revamping his style and his attempts to coordinate and cooperate with people
inside of the firm were appreciated. The summary statement submitted to the promotions committee
frankly stated:

Rob is an aggressive, intense coverage officer, and his management style is

tough and aggressive as well. This has been one of the keys to his success, and
although it has caused bruised feelings at times, it is unlikely to change. He is,
fundamentally, a producer/salesman, not a manager.

Parson was one of four candidates put forward by his group. After many discussions, there
was a strong consensus within the division that he had demonstrated the qualities required of a
managing director.

According to Stuart, Parson’s promotion to managing director had the expected positive
impact:

This year, as an MD, he’s performed even better than last year. I view the
managing director title as not only a reward, but an incentive. It is not the “end
game.” You work harder your first year as a managing director than you did the two
years up to it. It gives you a stamp of approval that makes most people more
productive.

Professor M. Diane Burton prepared this case as the basis for class discussion rather than to illustrate either effective or
ineffective handling of an administrative situation. The circumstances and material incorporated in this case have been made
available through the cooperation of the individuals and the company involved. Some names and situations have been
disguised.
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