Goldman Sachs just turned to Richard Siewert, Jr., former counsel to Treasury Secretary Timothy Geithner, to take the public relations reins.
Obviously, Goldman Sachs felt something had to change.
But they had no way of knowing the firm’s tarnished image would morph into a full-blown crisis.
That’s what happened yesterday when Greg Smith’s op-ed, “Why I Am Leaving Goldman Sachs,” appeared in The New York Times.
What makes the Smith piece so damning is it calls out the decay from the inside looking out with one overriding message:
Goldman Sachs will do anything to make money even if it comes at the expense of its clients.
You want clarity in message. There you go.
Here’s a smattering of the highlights:
- … The environment now is as toxic and destructive as I have ever seen it.
- … Interests of the client continue to be sidelined.
- Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.
Encouraged that financial analysts see value in hyperbole.
- I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them.
- It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail.
- These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?”
I guess what happens in Goldman Sachs doesn’t stay in Goldman Sachs.
Makes for riveting business storytelling.
It’s the type of blistering narrative that is sure to get the attention of clients, prospects, employees, friends and family of employees, and even government officials (no doubt part of President Obama’s Wednesday morning reading package).
So how does Goldman Sachs respond?
If the company views this as a PR crisis, they will utterly fail.
This isn’t about countering Smith’s words with the company point of view and striving to generate media coverage with diffusion in mind. The worse move would be to quickly cobble together their own op-ed as part of a tit-for-tat strategy.
This is a crisis of operation that cuts to the core of how Goldman Sachs conducts business.
Which actually offers a bigger opportunity for Siewert and the PR function.
Assuming Goldman Sachs can put its institutional arrogance to the side, Siewert can serve as a catalyst in shaping the new Goldman Sachs. I touched on this PR utopia before. As the “conscience” of the company, he can clinically identify the decisions and actions that don’t align with the company’s aspirations and core values. Does the company change how it behaves or change its aspirations and core values?
The two need alignment for effective communications.
If the company decides the aspirations and core values need some “tweaking,” keep the current management team.
But if it’s the behavior and actions that need an overhaul, Siewert has the unenviable task of pointing out that the leadership, starting with Mr. Blankfein, needs to change.
Otherwise, the never-ending barrage of negative stories will erode the brand until there is no brand.No comments