Goldman PR crisis–Round 27

Does it seem to you that Goldman Sachs has sort of an unending PR crisis? The latest involves a London-based executive, Greg Smith, who quit the company rather publicly by having his resignation letter published as an op-ed in the New York Times. That strikes me a little odd–does NYT publish resignation letters from disgruntled employees routinely or was this some sort of special case? I’m guessing the news potential was too great to pass up.

The news nose knows it, and the letter and op-ed went viral, as they say. Why? This article suggests some reasons. I’m thinking it has a lot to do with the general distaste left in the mouth of most relating to fat cat Wall Street bankers, plus the continuing PR disasters that seem to haunt this once highly respected firm. How have the mighty fallen.

Given that, I think PR Daily News missed a key point in their otherwise valuable reflection on this latest crisis and what it means for crisis managers. They report that Goldman’s response to this latest hit was to say “we disagree.” Here’s the quote:

“We disagree with the views expressed, which we don’t think reflect the way we run our business. In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.”

Now, that is cautious, reasonable and I’m sure reflects the view of management. Unfortunately it does little to help Goldman’s increasingly severe reputation crisis. I believe it is one of the key functions of communication managers in an organization to deeply understand and represent the viewpoint of those outside the organization–particularly those who matter most to the future of the organization. If that is the case and a dose of reality were injected into the discussion about how to respond to the unhappy, loudmouth ex-employee I would have said: “You know we think this guy is out to lunch and clearly wants to hurt us. But, we’ve been hit by many accusations including some that proved to be fairly well established as fact. We need to approach this with uncustomary humility. We need to show that we are clearly examining ourselves to see how we match up with the values and expectations of our customers, potential customers, and stakeholders. Therefore, I suggest we issue as statement such as: ‘Mr. Smith’s accusations are hard-hitting and painful, particularly at a time when we are carefully reassessing the true values of Goldman Sachs. While we believe he is fundamentally wrong on some of the key issues, particularly that we don’t care about our customers, we are taking this criticism to heart. It is valuable, if painful, input that deserves our attention and we will use it to continue the soul searching that is necessary for us at Goldman Sachs as we look to a healthier, more respectful future.'”

OK, maybe I’m the one out to lunch. What do the rest of you think? Did Goldman’s flat rejection help them in their increasingly tenuous reputation management challenges?



4 thoughts on “Goldman PR crisis–Round 27”

  1. This one of those when you have to weather the storm. You might be right … do all the right things and still come out of it not exactly smelling like a rose. Your approach seems right … even if the criticism seems out of touch … go beyond that … talk about what you do right … show examples if you can … we’re always learning how to serve our clients better … that sort of thing …

    One thing for sure … they can’t afford to appear arrogant …

  2. Although I am not familiar with GS’s culture, this particular article highlights the need to ensure that company leadership has instituted policies and procedures that ensure there are ample opportunities for redress so that when disgruntled employees feed the media with a story that is ripe for publication (because it builds audiences and ratings), other employees will defend the company and leadership can quickly demonstrate that, although not all issues may result in an outcome that the aggrieved employee desires, the process and climate inside the company will be perceived as “fair” when (and if) the CEO decides to lay out the facts of the case. This is a leadership issue. If, after considering the facts presented by the company, their actions were determined to be fair, legal and ethical by a reasonable person who is sensitive to trends in society, the company will stand a good chance of weathering actions driven by motivations that may not have been revealed in the media’s expediency to create a story.

    John P. Philbin, Ph.D.
    Regester Larkin

  3. Wow–you’re counting. You hit the nail. This won’t go away until it stops being a pissing contest and someone eats some humble pie.

  4. I think Patrice said it best – “they can’t afford to be arrogant”. Goldman Sachs’ reputation among consumers is at an all time low, and Mr. Smith’s op-ed column includes some serious accusations which serve to further highlight the company’s negative image. Goldman Sachs had the opportunity to acknowledge flaws in their operational strategy while still separating themselves from Smith’s accusations and failed miserably to do so. Instead, the company’s response makes them come off as one that fundamentally misunderstands the public perception of their firm. By taking such a position in their response to this criticism, Goldman Sachs made a large problem even larger.

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