The million dollar mistake

A Morgan Stanley investment banker, 46 years old, got into a taxi and made a series of blunders that later cost him his job.

His first mistake, the one that led to the others—and the one that happens at work, every day: no ground rules.

Ground rules are explicit agreements. You and I have been using ground rules all our lives, but mostly while playing games.

Games are serious, they have rules. Consider ping pong. In our last house, we played in the basement. The ping pong table was near a post, so my son and I made up some additional rules:


1) If your ball hit the post and then hit the table, that was ok.
2) If you ran into the post and the entire house collapsed, you lost the point.

Without explicit agreements, we default to implicit assumptions. Ever assume one thing, and then discover, too late, that your boss, or some other key person, expected something different?

Ground rules aren’t magic, and making explicit agreements doesn’t always work. Your company might have a ground rule, for example, that meetings start on time. But they don’t.

Why not? Well, no consequences when the ground rule is broken .

Some companies add consequences with a “buck bucket.” For every minute you’re late to a meeting, you owe $1. Also, for every excuse you give about why you’re late, you owe $2.

(For execs, multiply by 100.)

Ground rules answer the question, “How do we want to work together?” You can use them anywhere—in key relationships, critical projects, and even routine interactions, like a cab.

If you had a lengthy cab ride—the Morgan Stanley one was 40 miles, from NYC to Connecticut—you’d probably negotiate a flat rate. And you’d do that before you ever got into the cab.


But the Morgan Stanley banker didn’t. He assumed one price (never stated), and the driver assumed another (never stated). Then, end of trip, the banker was surprised by the $294 fare, the driver was surprised when the banker refused.

Their divergent assumptions led to a fight, to a police report, to news coverage, and to Morgan Stanley firing the banker for reputational harm (“A banker’s costly cab ride,” WSJ, 12/19/12).

He’d worked at Morgan Stanley for 19 years; some years, he’d made over $3 million.

Tip: Set ground rules early to prevent trouble later. Because in ping pong, and in life, you probably don’t want to knock down the house.

© Copyright 2013 Paul Hellman. All rights reserved.

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