A Glimpse Into A Harvard Business School Case Study Class

[Music] there you go thank you thank you thanks for coming and it's great to be here as John mentioned I'm a professor at Harvard Business School and Harvard Law School and when he asked me to do this I thought to myself how am I gonna do this in 25 30 minutes give you a sense of the case method with anything that would kind of approach reality so rather than play it safe we're gonna do me too you know why not right if we're gonna gamble why not just go for it so let me just walk

you through a couple of ideas and then we'll get started so maybe we can just get started by just you know making sure we're all on the same page so what's the case method all about so maybe I can ask this gentleman in the white shirt right here very good is his answer was I have no idea that's why I'm here yeah so that's a great answer you would never get away with that in a real classroom but for these purposes I'll let you get away with it so you know in short the case method

is about trying to replicate real-life situations which are characterized by incomplete information and uncertainty and being forced to put yourself in the place of a decision-maker and doing something and the premise of it is that is what life is about and so the ability to go through 600 cases in a given year or whatever the number is is that you become well practiced not in any particular domain but in the domain of decision making under uncertainty and with incomplete information and that's a really really important skill so that's the premise of the case method you

know as I mentioned it is also predicated at least a little bit on cold calling as I just demonstrated this will be a little bit of a tough room to cold-call but this discussion is gonna require you to participate so I hope you will either by raising your hand or I'm happy to cold call I have no problem with that the big departure in what we're about to do from typical case method is of course that it's gonna be hypotheticals and I didn't ask you to read anything in advance normally you'd have read a case

in advance you would have discussed it in a study group you would have tried to kind of figure out all the angles and then we'd kind of come together and discuss it so this is a very cheap imitation of the real thing but it'll give you at least some sense of what it's about okay good and then the final thing of course is just to say I'm an economist I write and my scholarship is about finance and public economics this is not my domain of expertise so it's not really clear why we chose to do

me - I was in charge of that decision but I'm not an expert in these matters and I don't have any particular expertise to bring to bear on this topic having said that I think it's something we all need to develop some expertise on and so what better way than standing in front of a whole bunch of people to try to develop that expertise okay all right good so let's just dive in so by the way I should just say I'm gonna just for these purposes put you in the role of a CEO of a

medium-sized company you can think about it in an entrepreneurial setting if you'd like if that's more familiar to you or think about it as the CEO of the company that you may be working for now and we'll just try to go through that kind of scenario okay so here we go so the Human Resources chief comes to you with an allegation regarding your CEO oh one of his subordinates alleges a sexual encounter after an office party all right good so what do you do and let's just do the real you know real serious tik-tok which

is give me the play-by-play of what you're going to do yes the woman in the white fact-finding what does that mean so just to be clear the first thing you're going to do tell me exactly what you're going to do you're gonna first you go to the woman who's alleging the sexual harassment yes and are you doing this as the CEO you're the CEO HR chief comes to you you are the CEO are you what are what role are you gonna play just let's go so let's back up so this is the make sure we're

all on the same page you're the CEO of a company you have an HR chief that HR chief comes to you with an allegation against your CEO oh every okay everybody got the facts okay as the CEO what do you do so let's get if it's okay well let you do you want to keep going so you're not going to be involved it's the HR people's job we don't know anything yet okay and so I wanna you want me to go and investigate and until that time are you involved at all I didn't ask politically

I asked are you involved at all let's just let's open it up let's open it up and they'll see what other folks say yes the gentleman in the purple yep and you participer tissa pate in that I'm asking you in this situation as the CEO of the company you would participate what about the CEO Oh what about the CEO oh the one who's been accused are you gonna talk to him okay you're gonna speak to both which one first the first the person who's been harassed and then you go to the and then you go

to the CEO okay anybody disagree well anyway the yes you okay okay alright let's kind of develop a hypothetical you go to the CEO it was consensual it's completely consensual and and I'll play the CEO you know how these things happen it just happened it was totally consensual I swear to God my wife doesn't know about it that's the deal what do you do as a CEO yes okay and you are you gonna be as arm's length are you gonna be involved okay and he tells you it was consensual what are you gonna tell the

CEO oh you're a friend of 20 years uh-huh okay okay great let's make it a little more complicated he denies that it ever happened fact-finding mission is inconclusive in the blue shirt yes now what do you do you did your fact-finding mission HR chief went off into it he says nothing happened there is no evidence and he denies that it ever happened sure yeah that's one answer yeah go ahead so you have informal chats you're gonna go around and talk to his colleagues and see if he's ever what no no sign of harassment yes it

was a sexual assault it's a classic kind of situation what are we gonna do in that setting yes she has a compelling version of events he has a compelling version of events what happens next let's go too late yes please in grey we're done fact-finding it was inconclusive what are you gonna do slide on both sides let's make it a little more complicated it's a woman outside the company it's a woman outside the company not connected to the company at all who makes an allegation against the CEO oh so now what do we do yes

the woman right here yep analyze the implications and consequences that sounds fantastic what does that mean it's being conducted really well your CEO is a star part of the performance are you gonna make a different decision because of your stock plummeting okay so this woman makes an allegation from outside it's not even public yet at this point it's not public or what are we going to do in the setting yes you would ask the woman to reach out law enforcement it turns out she says that in fact law enforcement is notoriously uncooperative in these circumstances

the bar is extremely high and she doesn't want to do that she just wants you to know the kind of CEO you have in your employment so are you done after you refer to law you're gonna tell her to go to law enforcement that's it so you have no duty to her at all she doesn't want to pursue that direction that's her choice and you're done good okay great everybody okay with that anybody disagree with that the duty is done because she's not part of the organization and so what duty do you have to her

and so she has to make a choice whether to pursue that door or not pursue it and that's what that's all there is fantastic yes so we're gonna call in a diversity consultant we're gonna call on a diversity consultant or harassment consultant and we're going to find out what they can do to help the situation is anyone gonna talk this yellow does anybody yes he says he says she's a spurned lover okay so when he says that what do you do a really good motivation in the sense that for her and you're comfortable investigating all

this so any allegation that comes in against your CEO you're gonna investigate okay great let's come back to this gentleman here turns out the accuser has got one million Twitter followers does it change your decision you said go to the police or don't I don't care it's not my problem I'm being mean to you but that was some version what you said so the fact that the whole world knows about this is not a problem so this does not change anything great everybody agree with that yes far over there yeah well this is a friend

this is somebody outside the office outside the company who's made an allegation against your CEO outside the office happened outside the office it's not an office party just to be clear CEO is being as being alleged to have done something with a woman who has no connection to the company didn't happen on the company grounds didn't happen anything so you're gonna investigate every claim that comes in so you're you're you're okay what do you make of his position he said I'm sorry I don't know the names in this room so it's a little uncomfortable but

he said look it's a matter for the law officials I'm out of this what do you say to that and you're out of it you got to go to legal proceedings you want to tell him what he's wrong so you would only do it if she had the 1 million Twitter followers it's a reputation thing or it's an ethics thing it's both those things okay listen okay let's get a couple of more voices here and see maybe in the back yes so you might actually talk to her uh I I don't want anything I want

you to understand the character the person who you have as a CEO oh I'm sorry psych evaluation and counseling for the CEO Oh and that's it and then you kind of go further okay great let's make it a little bit harder so for the gentlemen here it's not your CEO oh it's a plant level employee you have about 20,000 employees did somebody who's working on the plant allegation comes in so just to be clear you're gonna so this allegation comes into a plant level employee and you're gonna investigate it everybody okay with that anybody disagree

with this let's just make sure we can get some viewpoints on is anybody disagree with this yes this woman right here yeah okay and are you gonna do it with everybody the plant level employee okay everybody agree with that but this has got to be investigated yes everybody okay with that yes I'm sorry you're just going to use emotional intelligence the allegations so she's making up stuff okay she's making up stuff and as a consequence you're just gonna ignore this okay well she said all she wants to let you know is that your CEO has

behaved like this or your plan level employees behave like this no she just wants you to know but you're basically saying she's not trustworthy and so we should disregard she just needs like emotional support yes right so the logic here was just so we're clear the logic here was not that valuable get them out let's say there's no liability is the lawsuit logic the one that's gonna move you what are you gonna do with the plant level employee accusation so you are gonna look into it well as we've had two other possibilities here one disregard

second fire you're gonna investigate and you're willing to investigate any claim that comes in against any employee no but I want to make sure I understand this you know you're the CEO of a global multinational firm 150,000 employees you're going to investigate every allegation that comes in against an employee once I've not you personally you're the CEO of a multi-billion dollar multinational company of 150 thousand employees are you gonna make sure that every claim gets investigated at least from a liability perspective what does that mean okay any other loss perspective on this yes gentlemen right

here huh but you do believe everyone every allegation has to be investigated I'm not saying you but every allegation has got to be invested by somebody okay let's change it up a little Glassdoor website rates your company as being the leader in your industry for propagating a bro culture they cite a hard-partying sales culture as a prime example what do you do tell me what you do in this instance I know these things are happening fast yes instead of a team to address this what does that mean convey to the media and the public that

we're going to be taking actions ok so this is a PR problem fundamentally a PR problem everybody ok with that the gentleman in the white yeah no bun behind you yeah so wait a second I just wanna make sure the role of a CEO is to make everybody feel safe and comfortable in the company that is your role ok great and what are you gonna do in this case everybody's setting up task force I like that what are you gonna do after that they report to you it's true okay you talk to a leading member

of the Salesforce they say to you look it's traditional sales costs given the kind of industry we're in this is the way things work it's kind of a bro situation and there's drinking for the Salesforce that's the way it is now what are you gonna do it's still to you look into options to mitigate what does that mean what are you gonna tell this guy when he says this to you he says it is the way sales are done in this situation man you know that you came up through sales so let's make it a

little more complicated I'm senior male executive let me see if I got that one right so yeah a senior male executive your Protege relays to you that the me to movement has led him to hesitate to mentor younger female employees this is a classic response to the me to movement there's actually it's bad for women because men now are gonna like not be in the same room with women so senior male executive your Protege says I'm uncomfortable mentoring younger female executives now so I am no longer having one-on-one meetings with women behind closed doors and

frankly I don't feel that comfortable on business trips with women what do you say to this gentleman what do you say yes right there look I'm not gonna put my life on the line these accusations are coming I'm not gonna put myself in a situation that exposes me yeah but you never know yeah I don't know I don't know it's just like you're in the room and anything can happen man look I I look this is my instinct this is what I'm gonna do fire okay great a younger female high potential employee indicates that the

drinking the annual off-site which is a 20 year old tradition typically leads to behavior and commentary that she finds offensive 20 year old tradition fair amount of drinking she comes to you and says I stuff happens in that setting that is offensive I want you to understand that what should you do in response yes the gentleman right there she finds offensive that there's drunken behavior and you know things get said she should have known because that was the culture she bought into she should do a research that's like what it's about like that's who we

are everybody okay with that yep it's mixed half and a half what if it's her just her probe a little bit more about what happens she cites your behavior as a prime example of this culture while we go back to you you're the prime example of this culture yeah you are you are her problem everyday with that yes right there it's kind of the the drunken stuff everyone's like you know being very bro like it's not very specific you've been that you you're the CEO you're the problem well that's what that says yeah you're gonna

take a serious look at yourself yeah yeah you took a serious look at yourself okay fantastic all right so one final example data from your HR department has been leaked and shows that men on average or and 2x what women earn in your company a local newspaper picks up the story now tell us what you're going to do yes right there it has to do with a lot of different factors multi causal it turns out that it is it's experience based that in fact when you it's that women have been in the positions of shorter

amounts of time there's nothing wrong with that it's just the way it is so what do you tell the local newspaper that it's it's simply because women have been in the positions for shorter periods of time that's what it is it does it turns out to be the same but they're just experience difference yes forget about the PR department what are you gonna do for real yeah so there might actually be reasons why the experience numbers are lower and you'd want to try to figure out what those underlying reasons are okay great so I know

that was super fast and tough but we're out of time and I was told to stick to time you know you can think about this one as well you know what I wanted to leave you with was two things one is I wanted to give you a flavor of a case method and you got it in like super fast fashion in a very abbreviated way you know in a normal setting it will be informed with facts that were common we'd have a much deeper more deeply textured situation but the essence of it is what you

saw which is putting people on the spot to make decisions that are really tough based on limited information and on certain settings as it relates to this stuff I think I would just leave you with this idea that there were three very different things that we talked about which is egregious behavior that was kind of like the sexual harassment sexual assault stuff there's the bro culture which is you know people are hanging around and drinking and doing stuff that's like very bro and then there are issues with promotion and pay and there's wage differentials it's

typical to think of those as separate and unrelated things and hopefully if nothing else this little half-an-hour snippet makes you think that maybe they're all the same thing and maybe they're all connected in some deeper way which is fundamentally about power you know more than anything else ok we have time for like two minutes of questions we can talk about the case method or whatever else you'd like to talk about I was gonna maybe I can if it's okay I would like to thank some of the participants maybe this gentleman right here I have a

copy of my book that came out last year this is also pyaare for the book but my publisher told me to do things like this thanks for putting your neck out on the line I appreciate that and maybe the woman who got us started she should certainly get one because she raised her hand upfront and that is always super valuable and maybe you could hand this to the woman who said she'd look at herself in the mirror and try to understand what was wrong I think that's helpful oh sure thank you okay good so we'll

spot for two minutes and maybe take a little Q&A John you tell me when we should shut this when we should shut this down yes right there I think the essence of the case method is that there typically aren't right answers and that you have to navigate yourself to the way and the place where you find the right answer and people find that very frustrating and I think if you find that frustrating then you shouldn't go to a school that relies on the case method because it is frustrating for some people but the essence of

it is to suggest that actually that's only part of what we're teaching is the kind of the right answer to the third decimal point most of what we're trying to teach is this you know which is trying to understand how you think about things think about communicating your decisions think about how other people think about these decisions and that's why the community is really important as well any other questions yes so you're asking me is there like one trait that is like the most important trait in the world that humans really care about I have

no idea I'm not Socrates but I would suggest that humility is you know dramatically underrated and to think that you would know the answer these things quickly is problematic and to understand that you'll get it wrong and to understand that other people have things to say that might help you understand the problem I think you know at a first pass I've never thought about this question before but in the first pass I would say you know humility is dramatically underrated and is the thing I would think about and the thing that's sorely lacking you know

in most of these settings yes yeah so that's a great question and obviously you know I came into this room I didn't ask anybody if they wanted if they felt comfortable with this topic or not and you know maybe that's problematic I don't know I I think you have to be really cognizant of dealing at these topics with great deals of care and I hope we were able to do that here but I think it's really damaging if we kind of consider certain topics as being off you know it's not being permitted I think that's

like the worst case outcome and I think it's completely antithetical to what a university is that doesn't mean we should be glib about this stuff we should deal with it with care and we should understand how it impacts people but I'd rather do that and then understand we'll screw it up and it'll get better you know rather than become extremely tendentious on these things well I think I tried to manifest it today I mean I can talk about it in words but I think you I think you're you take the Syria issue seriously you challenge

people you understand if if somebody were to have started to cry or break down you try to deal with them in some compassion but you can't let I don't think you can fundamentally let it change the pedagogical responsibility we have should we take one more you okay John okay great yes No yeah so we just did this but no they're not they vary and they vary from like entry-level to mid-level to senior level to other folks who are not initially part of the for-profit enterprise they go all over the place and they will be everything

from you know you're developing a new marketing plan to we're trying to forget the right way to do global cost to capital and there's these different formulas and you got to figure it out and you know you might say to yourself why would you do that for trying to figure out the global cost of capital like why would you have a discussion about that like that seems really inefficient because I can just tell you the way to think about the global cost of capital and the answer is it may well be inefficient in some narrow

sense which is I could give you a half an hour an hour long lecture about my thoughts about that but I think my sense is that over the long run its grossly inefficient to give those kinds of lectures because it leads to very little retention really doesn't develop any you know muscles that would be important or interesting for you so I think it's efficient for me but kind of grossly inefficient in a pedagogic sense you know more broadly all right very good thank you very much for your time [Applause]