The corporate culture and leadership at Goldman Sachs was put into an unflattering light by one of it’s own executives. Greg Smith retired from the his position at the financial services company where he was executive director and head of the firm’s equity derivatives business in Europe. His parting gift to the firm was a March 14th op-ed in the New York Times, “Why I left Goldman Sachs.” He took unflinching shots at the company’s corporate culture and leadership by outlining “a decline in the firm’s moral fiber.” Smith wrote “Today many of these leaders display a Goldman Sachs cultural quotient of exactly zero percent. …Integrity? It’s eroding.”
Smith’s action brings to mind two key questions. First is Goldman Sachs really that bad? Second why would an executive take such drastic action against his former employer?
Let’s address the first question. Although executives at the Goldman Sachs have been disputing Smith’s claims the firm’s shares dropped 3.4 percent on the day of the op-ed. This suggests that there are shareholders who suspect that there may be some truth to the allegations.
Why did Smith write the piece? He said he did it as “a wake-up call” to the board “(to) make the client focal point (of its) business again.” The firm said he was a disgruntled employee. Only time will tell who is right. There is probably merit for both sides.
What’s the lesson to be learned?
These are stories told at the water cooler, at a lunch table or in the ladies or men’s room. These aren’t the glowing stories created by a PR firm or ad agency. These are the stories that reveal the true DNA of an organization.
If culture defines “how we do things around here” then the stories employees tell are the way it’s conveyed. In many organizations there are the SOPs and then “the way we really do things.” In other organizations they are one in the same. Which one are you?
Great companies have employees who tell great stories that are aligned with the direction set by their leaders. When negative issues surface great companies listen, discern and take appropriate action. They do this because they know failing to do so is the first step down a slippery slope towards a dysfunctional culture.
The challenge for you is to know what stories your employees are sharing. If your employees were to write an op-ed in the New York Times about your organization would it be glowing or scathing?
Corporate culture and leadership must be developed and cultivated over time. It’s based on what you say and the extent your actions support your words. The by-product is the stories employees tell. Make sure your actions cultivate the stories you’d want to appear in the New York Times.
To get a better picture of your culture take the Growth Positioning Survey.