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 going to 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 going to do Me Too. You know, why not, right? If we're going to 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...
we can just get started by just 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. 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 within complete 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 going to require you to participate. 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 going to be hypotheticals. And I didn't ask you to read anything in advance. Normally, you'd have read a case in advance. You'd 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 MeToo. 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 going to 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 COO. One of his subordinates alleges a sexual encounter after an office party. All right, good.
So what do And let's just do the real, you know, real serious TikTok, which is give me the play-by-play of what you're going to do. Yes, 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 going to... 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. What role are you going to play?
So let's back up. So this is the, just 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 COO. Everybody okay? Everybody got the facts?
Okay. As the CEO, what do you do? CEO, I'm sorry. I heard COO.
I'm like, how come? Okay. So let's get, if it's okay, do you want to keep going? I mean, HR is basically the... So you're not going to be involved.
It's the HR people's job. We don't know anything yet. Right, so investigate.
Okay, and so you want me to go 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 let's see what other folks say. Yes, the gentleman in the purple, yeah. The last chance which we did was that at the panel the investigation was as CEO of the unit we interviewed the lady officer. And you would participate in that?
Yeah. I'm asking you in this situation as the CEO of the company you would participate? Definitely. What about the COO? What about the COO?
The one who's been accused. Are you going to talk to him? Yes, because I'm going to talk to him.
Okay, you're going to speak to both. Which one first? First the person who's been harassed, and then you go to the COO. Okay, anybody disagree?
I do. Anybody? Yes, you? Yeah, I would say that first off, I'm going to take over the pandemic, and then... Okay.
All right, let's kind of develop the hypothetical. You go to the COO. It was consensual. It was completely consensual, and I'll play the COO. You know how these things happen.
It just happened. It was totally consensual. I swear to God.
My wife doesn't know about it, but that's the deal. What do you do as the CEO? Yes? Okay, and you are you going to be at arm's length or are you going to be involved?
Okay, and he tells you it was consensual. What are you going to tell the COO? Your 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 going to go around and talk to his colleagues and see if he's ever, what? No sign of harassment? Yes? It was a sexual assault. It's a classic kind of situation.
What are we going to 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 to the... Yes, please, in grey. We're done fact-finding. It was inconclusive.
What are you going to 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 COO.
So now what do we do? Yes, the woman right here. Analyze the implications and consequences. That sounds fantastic. What does that mean?
It's being conducted really well. Your CO is a star part of the performance. Are you going to 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. What are we going to do in this setting? Yes? You would ask the woman to reach out to 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 COO you have in your employment. So are you done after you refer to law?
You're going to tell her to go to law enforcement, and 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 it or not pursue it, and that's all there is. Fantastic. Yes? I would say if she did not change some type of awareness...
So we're going to call in a diversity consultant. We're going to call in a diversity consultant or a harassment consultant and we're going to find out what they can do to help the situation. Is anyone going to talk to the COO? Is anybody? Yes.
He says she's a spurned lover. OK, 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 COO, you're going to investigate? OK, 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 of what you said. So the fact that the whole world knows about this is not a problem. It wouldn't be a problem, but seeing the protocol is to go to the. So this does not change anything. It wouldn't.
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 COO. But did someone see her? Outside the office, happened outside the office. So in terms of just corrupting, if it's outside the office, what's the...
It's not an office party, just to be clear. COO is 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 going to investigate every claim that comes in?
Well, of course, investigate the claim. So 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 gotta go to legal proceedings. You wanna tell him why he's wrong? No, he hasn't won.
So you would only do it if she had the one million Twitter followers? No, not on the, it's a, a perforation standpoint. It's a reputation thing or it's an ethics thing?
Well, both. It's both those things? Yeah. Okay, let's get a couple more voices here and see.
Maybe in the back, yes. So you might actually talk to her. Yeah, I mean, like, you might talk to her. I don't want anything.
I want you to understand the character of the person who you have as a COO. I'm sorry? Psych evaluation and counseling for the COO.
And that's it? And then you kind of go further. Okay, great.
Let's make it a little bit harder. So for the gentleman here, it's not your COO. It's a plant level employee. You have about 20,000 employees. It's 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?
Yeah, of course, because you gotta start with the investigation of... Everybody okay with that? Anybody disagree with this?
Let's just make sure we can get some viewpoints on this. Anybody disagree with this? Yes, this woman right here. Yeah. Yeah, so I think...
Okay, and are you going to do it with everybody, the plant-level employee? Whatever level of the employee. This did not happen on taking care. Okay, everybody agree with that, that 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 going to ignore this? Okay, she said all she wants to let you know is that your COO has behaved like this, or your plant-level employee has behaved 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 going to move you?
What are you going to do with the plant level employee accusation? So you are going to look into it. Well, we've had two other possibilities here. One, disregard.
Second, fire. You're going to 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. Not you personally. You're the CEO of a multi-billion dollar multinational company. You have 150,000 employees.
Are you going to make sure that every claim gets investigated? At least from a liability perspective. What does that mean?
Okay. Any other last perspective on this? Yes, the gentleman right here. It's a different allegation.
But you do believe everyone, every allegation has to be investigated. Yes. I'm not saying you, but every allegation has got to be investigated 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?
Set up a team to address this. What does that mean? Convey to the media and the public that we're going to be taking actions. Okay, so this is a PR problem. Fundamentally a PR problem.
Everybody okay with that? The gentleman in the white, yeah? No, the one behind you, yeah.
So wait a second, I just want to make sure the role of the CEO is to make everybody feel safe and comfortable in the company. I think that's, yeah, from an ethical standpoint, and also from a business standpoint, your employees feel safe and comfortable that they'd be more productive. That is your role. Okay, great.
And what are you going to do in this case? Everybody's setting up task force. I like that. What are you going to do after that? They report to you.
It's true. Okay, you talk to a leading member of the sales force. 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 sales force. That's the way it is. Now what are you going to do? It's still to you.
Look into options to mitigate. What does that mean? What are you going to 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. A 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 Too movement has led him to hesitate to mentor younger female employees. This is a classic response to the Me Too movement. There's actually, it's bad.
for women because men now are going to 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 going to put my life on the line. These accusations are coming. I'm not going to put myself in a situation that exposes me.
Yeah, but you never know. It's the acting on bad level. Yeah, I don't know, I don't know.
It's just like you're in the room and anything can happen, man. That's not what I'm asking. Explain to the person that it's...
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 at 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, 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 her research. That's, like, what it's about.
Like, that's who we are. Everybody okay with that? Yeah?
It's mixed. Half and 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. Why don't we go back to you? You're the prime example of this culture.
Yeah. You are. You are.
Her problem. Everybody okay with that? Yes, right there.
It's kind of the drunken stuff, everyone's like, you know, being very bro-like. It's not very specific. You've been, you're the CEO, you're the problem.
Well, that's what that says. Yeah. You've got to take a serious look at yourself. Yeah.
Yeah. You take 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 earn 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 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 simply because women have been in the positions for shorter periods of time, that's what it is. It turns out to be the same, but they're just experienced difference. Yes? Forget about the PR department.
What are you going to 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.
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 super fast fashion in a very abbreviated way.
you know, in a normal setting, it would 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 uncertain 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 was the bro culture.
which is people are hanging around and drinking and doing stuff that's 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 more than anything else. Okay?
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 going to, 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 PR for the book, but my publisher told me to do things like this. Thanks for putting your neck out on the line.
line. I appreciate that. And maybe the woman who got us started, she should certainly get one, because she raised her hand up front, 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 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 kind of the right answer to the third decimal point.
Most of what we're trying to teach is this. You know, we're just 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 there's all these case studies.
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... 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 at 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 felt comfortable with this topic or not. And, you know, maybe that's problematic.
I don't know. I think you have to be really cognizant of dealing with 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, as not being permittable. 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 take the issue seriously. You challenge people.
You understand if somebody were to have started to cry or break down, you try to deal with them in some compassion. But I don't think you can fundamentally let it change the pedagogic 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 necessarily 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 figure out the right way to do global cost of 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 of capital. Why would you have a discussion about that?
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, it's 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.