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Rob Parson at Morgan Stanley

Case Analysis

Léonie Tovell

on 21 April 2015

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Transcript of Rob Parson at Morgan Stanley

The case study overview
Rob Parson is a gifted banker with 10 years of experience and a good reputation. Hired by Morgan Stanley as a Market Coverage Professional in the Capital Market Services department (a client servicing department intended to bridge the gap between the IBD and Equity and Fixed Incomes).
A skilled hustler, Rob was able to build the business fast but unable to integrate into Morgan Stanley’s 'integrity' culture.
We are going to look at the relative importance of fit versus performance and gain some insight into sensitive performance evaluations.
The key players
Paul Nasr, Senior MD Capital Markets
Rob Parson, Principle
Skeptical about being hired by Morgan Stanley as he does not have an academic background
Likes a challenge but underestimated the banks reputation in CMS, the lack of staff and high interest rates.
Told he would be on a fast track to Managing Director (his previous position)
Has a great network and strong client relationships
Performs at a high level and delivers great market results (h
elped bring Morgan Stanley from 10th to 3rd in capital markets from a 2% to 12.2% market share)
Takes short cuts and does not feel bound by procedure or Morgan Stanley norms
He fails to manage internal relationships with the same skill he exhibits externally.
"He has strong marketing knowledge."
"Rob constantly puts key products in front of clients"
"Willing to do whatever is necessary to move a project forward"
"Aggressive selling skills"
"Volatile personality"
"I find him creative in his pitches to customers"
"He has significantly stepped up our profile with financial debt issuers"
"He is best at short sound-bite conversations."
Should Rob Parson Be Promoted?
His performance is strong, but there is room for improvement on all dimensions
If he is promoted the main leaver for performance evaluation becomes meaningless
He is a negative influence on the culture of Morgan Stanley
Managing Directors are standard bearers
Is the firm serious about changing its culture and values?
Rob Parson's 360
If you were Nasr, what would you say?
Paul Nasr

Senior Managing Director in Capital Market Services, a highly regarded banker with 20 years of experience
New to Morgan Stanley, with a focus on his two objectives: building CMS and implementing the One Firm-Firm vision
Hired Rob Parson personally and knows of his entrepreneurial abilities, he believes he has what it takes to build CMS
However he underestimates the degree to which Rob 'fits' into Morgan Stanley culture
He handles Rob with 'kid gloves' so as not to lose him and allows his behaviour as it yields results
Implied a promotion to Rob on recruitment.
Rob Parson
Way of working:
John Mack, President
President of Morgan Stanley 1993-2001
Looking to build a One-Firm Firm
Created this mission statement
"Morgan Stanley’s people are the source of our competitive advantage. We will distinguish ourselves by creating an environment that fosters
and innovation, by developing and utilizing our employees’ abilities to the fullest, and by treating each other with
dignity and respect
John Mack
to promote or not?
he fills an important role in the firm and might leave if not promoted
he was recruited for his 'aggressive' and 'entrepreneurial' skills
there was an implied promotion
he is succeeding where others have failed
clients love him
Rob provides solutions we didn't know we needed
He is charming
We trust him
He is raising the Morgan Stanley profile in CMS
Shares information and cross sells products
Energetic and makes things happen.
Should Rob Parson Be Promoted?
What is a Firmwide 360˚ Performance Evaluation?
FirmWide 360 Degree Performance Evaluation at Morgan Stanley

Implemented at a cost of $1.5 Million for all 2000 employees around the globe

Aims to provide an opportunity to every employee to know how well they are doing and gives them advice on potential areas of development

Key elements:

First the employee and their manager selects people who will provide the 360˚ feedback (from internal clients; peers, superiors and subordinates)
They then evaluate strengths and weaknesses based on evaluation criteria: which is categorised it into four perspectives professional skills, commercial orientation, Management skills and One Firm contribution.

The employee also self evaluates

The office of development then takes the data and turns it into a booklet for formal discussions.

The scales:
A five point scale in which 1 represents unsatisfactory and 5 outstanding.

"Personal style: Rob exhibits a volatile personality at times that causes problems. Needs to resist the temptation to react too quickly to an emerging problem. Must learn how to treat colleagues with a little more respect." Suggestion for development from a colleague with in IBD
"Rob often is too honest in his assessments, although he is usually correct. He probably needs to take a broader and maybe mature view of our clients and our own people." Development suggestion from colleague within IBD
"Team Player skills. Needs to integrate his efforts more with the broader team. Violated internal policies by extending syndicate invitations which led to a $20,000 error." Development suggestion from management with in IBD
"Rob has a very good sense of what his clients' objectives and desires are. For example he has a good grasp for their funding requirements and what their interest in a potential deal will be." Strength from a colleague outside IBD
"Keeps me informed. Rob is very good at letting me know what is happening in his area and with my potential clients. Rob has good sources on the street." Strength from a colleague within IBD
"Relationship management: Tireless worker. Rob has done a better job in covering financial institutions than anyone before him." Strength from Management outside IBD
Rob Parson's Case
Full transcript