If you are a regular reader of this blog you may be forgiven for thinking that, given the title of this blog, I have taken leave of my critical faculties, have secretly been sniffing glue or am now co-habiting with a member of the Goldman Sachs (GS) PR team. Thankfully none of these is true.
However, credit where credit is due. Last month, Greg Davies, a very senior GS Executive very publicly lobbed a massively incendiary letter into the heart of the GS business machinery. See the original letter by following the link below.
To sum up and paraphrase, what he said was the following:
1. The GS environment is now seriously toxic and destructive
2. The interests of GS’s clients are secondary – making money is primary
3. The current CEO and the current President, have lost control of the firm and are presiding over a massive decline in moral fibre
4. To get ahead in GS you need to be able to persuade your clients to buy stuff they neither need or want without regard to its impact on them
5. Oh and occasionally senior people refer to their clients as Muppets (no surprise there)
The instant result – an immediate 3.4% decline in GS’s share price and a massive swathe of negative press coverage, surely this was a body blow, surely this could be an event of such great a magnitude that it has the ability to topple the GS giant?
The solution – deploy the PR team – first up a master piece of letter writing for internal circulation and external publication, of course. The note sent by CEO Lloyd Blankfein is reprinted by CNN below.
To sum up and paraphrase what GS said:
1. When you have 30,000 employees someone’s bound to be unhappy – he’s just a crazy maverick
2. We don’t believe he’s right – we’re very proud of our firm
3. Greg didn’t follow the proper processes for registering his complaints – he’s a naughty boy
4. Here’s another 10 reasons why we are fantastic – we’ve won lots of awards so we must be good
What they didn’t do was respond to any of the big issues – a stroke of genius. What happens next – and this is the really brilliant play - GS orders an internal review – not to assess whether or not they are morally bankrupt and desperate to rip off their customers (oh no) – instead they set out to find out who has called their clients a muppet – a topic the soundbite hungry press have already latched onto. The reason this is genius – it totally deflects attention away from the really damaging claims and focuses on an act of behaviour that most people in most businesses have been susceptible too at some time or another when under great stress. Therefore, when GS weed out the bad mouthers we’ll all look on with admiration at the high standards of behaviour required by GS Execs and almost end up feeling sorry for them. So how will this all end - no doubt in six months time a couple of mid ranking executives will be reprimanded for “non-client centric behaviour and/or inappropriate use of language”. The muppet hunt will be over and the scapegoats will be “dealt with internally”. All will be forgotten and GS will continue on as Masters of the Universe – God Bless their PR. As for the share price – it’s now about 5% above where it was before Greg’s letter was published – it’s a funny old world.
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