Morgan Stanley's Critical Error in Ordering Employees Back to the Office

“Because I said so” is never a good reason.

This week, Morgan Stanley CEO James Gorman was widely quoted regarding his firm stance on workers returning to the office in New York.

According to the Financial Times, Gorman said “If you can go into a restaurant in New York City, you can come into the office.” Gorman went on to provide a not-so-veiled threat in that he’d be “very disappointed” if his employees in NYC were not back in the office by Labor Day and that he’d “take a dim view of employees who did not work regularly in the office.” Gorman also said that "if you want to get paid New York rates, you work in New York."(https://www.ft.com/content/ffd6033f-e8fc-4289-85b2-42bc4ddddd16)

This sentiment has been echoed by other major financial companies in NY – including JPMorgan and Goldman Sachs. And it is in direct contrast to the stance taken by some prominent tech companies on the other side of the country, such as Google, who are pursuing more hybrid and stay-at-home options aimed towards the preferences of a youthful workforce.

The problem with Morgan Stanley’s public line in the sand for its employees is that it fails to properly ARTICULATE THE WHY. In my upcoming book, Be Vigilant! Strategies to Stop Complacency, Improve Performance, and Safeguard Success, I dedicate an entire chapter to the importance of articulating the why and the hidden danger of “because I said so.”

“Because I said so” is the ultimate power trip. It’s the opposite of accountability and transparency. And it breeds complacency because it inhibits critical thinking.

Nowhere in the push to get employees back to the office does Mr. Gorman provide a credible WHY that goes beyond, essentially, “because I said so.” I'm not saying those whys don't exist - they may very well. But they are not articulated - which is, in practice, as bad as not having them at all.

While soft generalities about the importance of having people in the office so junior employees can learn the soft skills of their profession are thrown about, there is no data provided to back it up.

Mr. Gorman doesn’t assert that Morgan Stanley’s performance has suffered due to the remote work plans required during the pandemic. The reality is that the opposite is true. Morgan Stanley’s fiscal 2020 performance exceeded their 2019 numbers in all areas. And that improved performance has continued through the first quarter of 2021. (Morgan Stanley Fourth Quarter and Full Year 2020 Earnings Results - https://www.morganstanley.com/about-us-ir/shareholder/4q2020.pdf)

Mr. Gorman also did not provide any data that focused on employee performance, employee retention, client satisfaction, or any other meaningful metric. Not that those reasons don’t exist, but he did not appear to provide them.

And so, if you were to ask a manager at Morgan Stanley why their team must be back in the office, the answer is most likely going to end up somewhere along the lines of “because we said so.”

Now, this may work fine in the short-term. The world of financial management tends to be an alpha personality field. The big boss has spoken, and people will get back to the office. But I would be concerned about the long-term effect.

People today want to know the whys. The whys are as important, if not more important, than the whats.

Just look at what is happening in terms of the public’s relationship with law enforcement. The public demands, and rightfully so, to know the whys behind every action.

Why was that traffic stop initiated? Why was a decision to chase made? Why were weapons drawn? Whey was an arrest made? Why was force used?

The right answers to the whys provide a clear understanding. The wrong answers create unrest and distrust and may even generate criminal charges. A lack of ability or desire to provide the why is, by default, an indication that something is wrong. That intentions are selfish at best and nefarious at worst.

This desire for whys does not stop with law enforcement. It permeates every aspect of our lives – including our work lives.

And, in a world where options exist, “because I said so” does not work forever.

In this case, there are thousands of young finance professionals who have seen that they are able to competently perform their jobs while working from home. They may have suspected this in the past, but now they know it for sure.

Are there times where meeting in person would be beneficial? Almost certainly. But this is where flexibility, autonomy, and discretion come into play. Which requires a certain level of trust in your employees.

I would suspect that, before long, employment options will crop up in the financial services world that allow people to perform a large part of their work from home. As these options appear, the major financial services players will be slow to adapt because of their culture and inertia. Eventually, though, they will have to compete. Or they will have to be better able to articulate whey they aren’t.

While Morgan Stanley and other financial services companies can currently dictate this return to the office, just because they can doesn’t mean they should. Because the power that allows one to say “because I said so” rarely lasts forever.