Funny thing about the internal cultures of organizations – when they go bad, they also have a nasty habit of going public. Such appeared to be the case last week when Goldman Sachs executive Greg Smith published his letter of resignation as an op-ed piece in The New York Times. His scathing indictment of Goldman Sachs’ culture was a bombshell that had the business world buzzing.
Though the piece presented only one person’s characterization of the way things work at Goldman Sachs, there seemed to be a great willingness on the part of readers to believe it was all true, perhaps because Smith’s allegations so perfectly aligned with the popular perception of large financial institutions as temples of greed and moral bankruptcy. That perception has never been more prevalent than in the days since the financial crisis of 2008. It should be noted that, as reported by the Business Insider, Goldman Sachs CEO Lloyd Blankfein and COO Gary Cohn sent a memo to employees in which they contested Smith’s description of the company, citing positive results from a recent employee survey and describing the organization’s culture as “client-driven.”
Smith, on the other hand, described the current culture of Goldman Sachs as one that is focused entirely on making a profit – even if at the expense of the client. “It makes me ill how callously people talk about ripping their clients off,” Smith wrote.
He also offered this assessment, “The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. 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.”
As if the implications weren’t already clear enough, Smith firmly tied everything back to the company’s culture, “I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years.”
There’s a popular saying based on an old John Lennon lyric that life is what happens while you’re making other plans. Perhaps the corporate corollary to this chestnut is that corporate culture is what happens while you are pursuing other goals. The truth is that great corporate cultures don’t happen by accident, but bad ones do. All it takes is for an organization to look the other way, to focus on other priorities and to believe that its culture will somehow take care of itself.
The irony is that neglecting corporate culture in favor of pursuing profit eventually undermines profit, too. As if to illustrate this point, Goldman Sachs’ stock price plunged after Smith’s letter was published.
Smith summed up the company’s impending dilemma this way, “It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.”
How to avoid the predicament that faces Goldman Sachs? The answer is simple, but it takes work: invest in your corporate culture. Assess it, define it, develop it, support it. In short, embrace it.
Corporate culture is not just a collection of feel-good catchphrases you toss into the employee handbook and then forget. And it’s not a shiny veneer you use to gloss over the way things really are done. Culture is the air in the lungs of every organization, and when that air is toxic, the organization will eventually sicken as a whole.
The good news is it doesn’t have to be that way.