I’m sure the water coolers on Wall Street are buzzing over this piece, “Why I am Leaving Goldman Sachs,” which appeared in today’s New York Times. The world’s communal water cooler – Twitter – certainly is.
A damning recitation of changes in culture, lack of ethics and putting profits ahead of people – this piece confirms what we all suspected was happening behind the scenes at the big banks, but until now, couldn’t prove.
It certainly isn’t the first time these accusations have been leveled at Goldman Sachs or any of its investment bank peers. But unlike most exposes, this isn’t informed by unnamed sources or disgruntled employees firing back after dismissal. Rather, this is the tale of an executive who worked his way up from an internship at Goldman Sachs, who once believed so strongly in the core mission of the firm, he appeared in the recruiting video shown at every college campus in the nation.
But after 12 years at the firm, he could no longer look recruits in the eye and tell them Goldman is a great place to work. And so he did the noble thing – he left. And then he wrote this piece, powerful in its simplicity, notable in its lack of exaggerated accusations, and backed by the ultimate action – walking away from a great, presumably high-paying job.
No doubt the pundits and spin doctors will have loads of advice and counsel to help Goldman Sachs counter this piece and discredit its former executive. But these approaches are ill-advised, only reinforcing his main message: the culture at Goldman is indeed, awry.
In my view, his most serious accusation is his assertion that Goldman leadership lost hold of the culture – and replaced it with one where it was all about profits for the firm, not about what was best for the clients.
Let this be a cautionary tale for every professional service company – when you put your own needs ahead of your clients, you’ve lost your way. When that event becomes commonplace, you’ve lost your culture. What comes next? Losing your clients, and ultimately your business.
A professional service firm should be professional, and it must serve. To borrow from SNL’s Coffee Talk – discuss amongst yourselves.
My advice for Goldman? Demonstration is more powerful than discussion. When your reputation is under attack, these issues can only be fixed from the inside out, leading with your policies, your people, and more importantly your practices. To be the gold standard again, Goldman needs to act like it. Employees need to understand that the firm is only as good as the actions and choices of each individual. Reputation, like charity, begins at home.
Next, clients need to be assured that their interests are being served, above all else. That, more than profits, their business is what matters most. But trust isn’t earned in a day – it’s earned every day. So keep working hard every day to build it back.
Finally, understand that there is no silver bullet or easy fix to counter the proponderence of evidence that something is amiss at Goldman Sachs. Might some bold, symbolic moves or changes be helpful? Sure. But, while reputations can be blown in an instant, they can only be repaired slowly, over time. Start now.