Insider trading on the culture of the realm, Goldman’s crisis

Crises come in many forms. Forces of nature. Unanticipated market or executive performance. Honestly bad behavior. Theft.

But no individual triggers a crisis like a whistleblower, someone immersed in the facts and culture of your organization whose public story telling either rings true, or at least reinforces the prevailing perception.

Goldman Sachs, the venerable and more recently vilified, investment bank has another crisis on its hands with resigning executive Greg Smith’s broadside in today’s New York Times. It is staggering in its toxicity.

When you read this, look at where he anticipates Goldman’s counterattack: It details his monetary and leadership contributions; it describes his outside achievements; he’s shoring himself up against Goldman’s inevitable denigration. This, he’s saying, is no punk in the mailroom reading someone else’s mail.

Here’s what Goldman’s bosses — including CEO Lloyd C. Blankfein, will say:

Smith quit, how much credibility is there in a quitter?

He’s been under a lot of pressure lately and had a number of negative performance reviews. It was time for him to leave.

What he wrote about might be true in the tiny niche where he worked, but it’s certainly not true among more than a few of our 30,000 employees. If it were true, like Smith, they’d no longer work here. We wage financial war and war is hell.

Here’s what they should say:

Greg Smith is a long-time valued and loyal employee who contributed tremendously to Goldman Sachs’ success and delivered a powerful exit message. We are sorry to see him go, and we take his admonitions extremely seriously.

We are upset to learn that this is Greg’s feeling and we will move as quickly as possible to listen to what he’s saying and work very hard to correct what he suggests. This is a shot across our bow that we will heed.

We are responsible for this culture and if Goldman’s people are not treating our clients with the highest integrity, we will correct that. And if clients feel they have not been treated fairly, we will offer fee refunds.

In addition, we are immediately opening a search for an ombudsman who will thoroughly investigate these allegations and report back to the board on reforms we need to make.

Which responses are you betting on?


About steveoncrisis

The content is about crisis management and mismanagement in a digital age. It comes from Steve Bell, who spent 30 years as a journalist for the Associated Press and as managing editor and editorial page editor at The Buffalo News. He is now Partner/Director of Public Affairs at Eric Mower and Associates, one of the nation's largest independent advertising, integrated marketing and public relations agency with six offices in the Northeast and Southeast.
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