The very best public relations counsel in the world can't fix a broken product or service. That's why, in light of yesterday's brutal Greg Smith essay in The New York Times, Goldman Sachs would be better advised to spend its money on smarter initiatives.
Instead of following a typical PR firm's advice of running full-page letters of explanation in The Wall Street Journal signed by CEO Lloyd C. Blankfein, placing bylined articles carrying president's Gary Cohn's signature in the business and financial press and getting both on the CNBC, Fox Business Report circuit, Goldman should first shore up what I call its audience experience.
The top brass should spend time walking in the shoes of the institutional investors Smith says were known as “muppets” within the firm. They need to sit alongside employees at all levels and experience the culture Smith termed “toxic and destructive.”
In short, the old, white guys in the corner office need to abandon the typical strategy of simultaneously undermining Smith's credibility while blitzing the media with 'look at how great we really are' stories. The first approach will reek of vindictiveness. The second will have about as much credibility as BP's continuing to insist the Gulf Shore is better than ever.
Toxic cultures and patronizing customer service occurs when senior leadership puts profits before people. But, there are two, sure fire ways to turn both around (and neither involves PR): The board should either a.) fire Blankfein and Cohn, or b.) read both the riot act and insists they spend the next six months experiencing their brand personally and from the outside in.
I'd opt for the latter and get Butch & Sundance going on a different kind of tour. I'd have them sit right alongside their key institutional investors and listen as a Goldman adviser tries to push 'Hung Elephants' as Smith called the firm's practice of selling only the highest profit products. I'd have B&S join another investor and experience, first-hand, what it feels like to be pushed to invest in 'axes', the products Goldman is trying to dump because they aren't very profitable.
Last, but not least, I'd partner with a firm that could attend internal meetings as B&S's proxies to see if muppet mania really does pervade the culture and clients are, in fact, seen solely as cash cows and not valuable partners.
Until, and unless, Blankfein and Cohn experience the Goldman brand from the outside in, any PR program will be seen as glib and superficial. But, if they can report in six or 12 months time that they personally walked in their customer's shoes, sat in employees' seats and made concrete corrections based on first-hand knowledge, they can begin the long and arduous process of rebuilding trust in the brand. If they don't, Goldman will be forever tarnished as the Glengarry Glen Ross of Wall Street.
I completely disagree, I-man. And, my solution has nothing whatsoever to do with spin doctoring, as you put it. When the C-suite of an organization experiences its brand from the outside in, they make immediate and profound changes. And, I’m not suggesting a one-off audience experience for them, either. It’s something that needs to be done on an ongoing basis.
Excellent point, Julie. I’ll bet you a toxic asset or two that he doesn’t do it.
Now that Greg Smith has blown the whistle on the toxic “greed is good” philosophy of Goldman Sachs (which, quite honestly, should be no surprise to anyone who has ever worked in the financial services industry) I hope he uses his 15 minutes to start a new chapter and career where he “gives back” to those less fortunate.
Isaac – It’s always been about making money. The question is how, and with what commitment to client service and long-term growth. That’s where Goldman has gotten itself into trouble. What you’re essentially saying is “they all do it,” so kick the bums out. The solution isn’t that simple, much as we’d like to think so. Goldman wasn’t dumping toxic sludge into rivers; they’re making money by investing rich people’s money badly. It’s not quite the same thing. With all due respect, I think you’re idealizing Greg Smith way too much. Read his Op-Ed again; he’s talking about Goldman Sachs back in 2000 like it was “the good old days.” C’mon, really? While I admire his guts and what he’s saying, Smith is being a bit self-aggrandizing; he reminds me a bit of that JetBlue flight attendant who quit in a blaze of glory. How can anyone expect the troops to put their trust into someone who is essentially a whistle-blower? For what it’s worth, I do think these latest PR disasters are gonna hurt bad, and Blankfein’s string has probably run out.
Isaac – It’s always been about making money. The question is how, and with what commitment to client service and long-term growth. That’s where Goldman has gotten itself into trouble. What you’re essentially saying is “they all do it,” so kick the bums out. The solution isn’t that simple, much as we’d like to think so. Goldman wasn’t dumping toxic sludge into rivers; they’re making money by investing rich people’s money badly. It’s not quite the same thing. With all due respect, I think you’re idealizing Greg Smith way too much. Read his Op-Ed again; he’s talking about Goldman Sachs back in 2000 like it was “the good old days.” C’mon, really? While I admire his guts and what he’s saying, Smith is being a bit self-aggrandizing; he reminds me a bit of that JetBlue flight attendant who quit in a blaze of glory. How can anyone expect the troops to put their trust into someone who is essentially a whistle-blower? For what it’s worth, I do think these latest PR disasters are gonna hurt bad, and Blankfein’s string has probably run out.
Isaac – It’s always been about making money. The question is how, and with what commitment to client service and long-term growth. That’s where Goldman has gotten itself into trouble. What you’re essentially saying is “they all do it,” so kick the bums out. The solution isn’t that simple, much as we’d like to think so.
Goldman wasn’t dumping toxic sludge into rivers; they’re making money by investing rich people’s money badly. It’s not quite the same thing.
With all due respect, I think you’re idealizing Greg Smith way too much. Read his Op-Ed again; he’s talking about Goldman Sachs back in 2000 like it was “the good old days.” C’mon, really?
While I admire his guts and what he’s saying, Smith is being a bit self-aggrandizing; he reminds me a bit of that JetBlue flight attendant who quit in a blaze of glory. How can anyone expect the troops to put their trust into someone who is essentially a whistle-blower?
For what it’s worth, I do think these latest PR disasters are gonna hurt bad, and Blankfein’s string has probably run out.
rep- hate to say it but you are coming at this from too much of a spin doctor POV. what you suggest above is merely a band-aid. things would seem great for a while but the current captains of the SS Goldman are driven by one thing and one thing only- money. no meetings or time spent with clients will change that. their love of money got them to where they are today.
if goldman TRULY wants to change the culture and perception, there is an easy and real change- one that shows actions and not spin. fire blankfein and ask greg smith to come back and CEO. if he accepts, then his culture will lead and clients will likely be thrilled. and if he doesnt, it still shows they are serious about the change that is needed.
Good post. The thing is, Greg Smith’s 15 minutes will pass and Goldman Sachs clients will consider their options, if they aren’t doing so already. Will things really change?
One thing that’s been lost in the shuffle is that GS’ brash, combative PR bulldog Lucas van Praag has been replaced with Richard “Jake” Siewert Jr., a smooth operator who’s worked for Timmy Geithner and has strong ties to the Democratic Party. Do you think he’ll have any influence on the culture?