Crucial Conversations

Todd McKenna was having a hard time paying attention. A third-year associate at Sutherland Brown, Todd was sitting in his boss’s office with three other bankers who were going over the final pages for a presentation they would be flying to Chicago to present the next morning. He knew he should pay attention so he could ask any questions he had now, because none of his colleagues would be around when he was making those changes to the document in the unearthly predawn hours. But he was too angry to care right now. Bonuses had been announced earlier in the week, and Todd’s boss, Scott Lang, who was a managing director at Sutherland Brown and head of the Consumer Products Group, had told him confidentially he would be the top-paid associate in the class.

But just before this meeting, Todd had been sitting in his bullpen talking with some of the other associates, and some numbers were discussed that made Todd realize it was not true—he was not the top-paid associate. His boss had lied to him, and Todd wondered whether Scott took him to be a fool, thinking he would never find out. Just because Todd didn’t act out as much as some of the other associates, Scott probably thought he could pay him less and he wouldn’t complain. Well, Todd was tired of being the perfect associate who kept his head down and just did perfect work. If Scott didn’t appreciate him, he knew plenty of other managing directors in the other industry groups who had tried to poach him, and they would be willing to pay him what he was worth.

As the meeting broke up, the three other bankers gathered their papers and walked out, leaving Todd alone in Scott’s office. Scott lobbed a pen cap at Todd and said, “McKenna, are you in outer space? What’s up with you?”

Todd: Well, if you really want to know, I’m thinking of leaving the group.

Scott: Whoa, where did that come from?

Todd: It might be time for a change—there are some exciting new deals happening in the Energy Group and I know they need associates with experience, so I could add a lot of value.

Scott: If you feel like you need a change, I won’t stop you from pursuing exciting new opportunities. But, not only are you adding a lot of value for us in this group, the work is beginning to roll on in here, so the sky’s the limit for great associates like you.

Todd: How much value?

Scott: Well, Todd, you know I’ve told you before that you do great work. I don’t think I was half as knowledgeable when I was a third-year associate, so you are on your way to having a very productive career.

Todd: But Scott, you say that to everyone.

Scott: What is that supposed to mean?

Todd: The other associates all think you love them, and they’re doing a great job too.

Scott: Well, we do have a good group of associates this year, which I have to say is a relief for me—otherwise the bankers complain to me day and night.

Todd: Even Patrick, who we all know flaked when the Munson deal was at a really crucial stage?

Scott: Is that what you’ve all been saying about him? It’d be nice if you cut your colleagues a little slack. Patrick had a serious health problem that got diagnosed during that deal, and it’s amazing he managed to show up at all. But now we’re off on a tangent: what are you really trying to ask me?

Todd: Aren’t there differences between all of us, in terms of our performance?

Scott: Of course there are, Todd, and I can tell you honestly—you are performing at the top of our expectations. We are really very pleased with you in the group.

Todd: Then why didn’t I get paid that way?

Scott: You did get paid that way—I lobbied for you to be right at the top of our range.

Todd: Scott, why can’t you be straight with me? How can I be at the top of the range if Alan Craine is getting more than I’m getting?

Scott: You’re putting me in an awkward situation, Todd. You really shouldn’t expect me to discuss other people’s compensation with you.

Todd: Are you telling me that Alan is not getting more than I’m getting?

Scott: I’m telling you that you’re comparing apples to oranges. Alan should get paid more than you; we’re underpaying him as it is—he took a pay cut and a title cut to join us this year when we hired him away from White Hedges. We wanted to build in a year to give him a chance to come up to speed on our way of doing business, before he had production pressure as an officer. But we paid him enough to signal to him that he’s on the right track. It’s a completely different situation.

Todd: It still looks to everyone else like he did better than I did.

Scott: You’re going to have to stop worrying about how things look, or you won’t last very long in this business. So basically you were willing to leave my group, and here I was feeling bad thinking we’re not creating enough exciting opportunities for you, but really it all comes down to money, and ego, in the end.

Todd: No, it wasn’t just money. I felt like you weren’t playing straight with me, and I thought I knew you.

Scott: But you didn’t trust me very much, clearly. You didn’t even come straight out and ask me what you wanted to ask, and you certainly already thought you knew what the truth was anyway. I try hard to be a good manager and to be fair, but I guess that doesn’t matter to you.

Todd: Look, Scott, I’m sorry this all came up.

Scott: No, I’m glad it came up. I think it is true that our deal flow has been slow lately, and there might be more going on in the Energy Group. I think it might really make more sense for your career for you to go add value over there. If you’ll excuse me, I’ve got to make some calls before I head out to Chicago.

Todd exits Scott’s office.

Professor Thomas J. DeLong and Research Associate Vineeta Vijayaraghavan prepared this case. The company mentioned in the case is fictional. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. This case was prepared by Thomas J. DeLong and Vineeta Vijayaraghavan. Copyright © 2002 President and Fellows of Harvard College. Harvard Business School case 403-027.