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The Goldman Sachs Op-Ed: A Warning for Every Leader, Everywhere


March 22, 2012

If your employees were to write an op-ed about you or your organization, then what might they say? What do you aspire to have them say and how are you leading with your actions?
 
When a senior-level manager alleged claims of not only poor, but possibly even negligent, client management at Goldman Sachs in a March 14 New York Times op-ed, the renowned financial institution lost $2.15 billion in valuation in one day.

Goldman Sachs’ leaders posted a statement on their website that refutes the employee’s claims. But there must be enough clients and other shareholders who still suspected the allegations could be true for the company’s shares to drop 3.4 percent so quickly.
 
Clearly, none of us know all the facts. Nor can we assume everything the employee, Greg Smith, has stated is true. It’s his perception and his reality. However, Goldman’s response – or lack thereof – suggests serious leadership problems within the organization.   

Talk is cheap

I often use the phrase, “talk is cheap,” when referring to empty promises made by leaders. In this case, it seems talk at Goldman Sachs may not only be cheap, but is potentially costing their clients’ money and eroding employee engagement.

Goldman’s stated Business Principle at under question here:

“Our clients’ interests always come first. Our experience shows that if we service our clients well, our own success will follow.”
 
Smith contends that Goldman leaders frequently focus on their own financial gains rather than those of their clients. I see this conflict between words and actions frequently. Organizations can issue principles, values and standards all they want — but until the actions of the leaders consistently and whole-heartedly reflect the meaning of the words, those words are empty. The smart, talented employees you hired will know you’re not sincere before you can say “wiped out market value.”

Actions establish culture

Leaders often don’t realize the messages they’re sending through their actions. With or without intention, they’re communicating. Often it’s a “do as I say not as I do” mentality, which erodes trust and consequently relationships and results.
 
Actions speak louder than words. Actions, not words, establish culture and demonstrate commitment to carry out a promise. Leaders at Goldman Sachs — and everywhere — need to make good on their promises and act in line with their principles and standards to earn employees’ and customers’ confidence and trust. And when they don’t live up to their principles, they need to say so, what they’ve learned, and how they plan to make things right. Goldman’s post on the website would have been more credible with evidence of how they’ve worked to improve their culture and client service. What actions have they taken?

David Grossman, ABC, APR, Fellow PRSA, is the founder and CEO of The Grossman Group, an award-winning Chicago-based communications consultancy focusing on organizational consulting, strategic leadership development and internal communications. Details: www.yourthoughtpartner.com



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