At least you don’t have to deal with this today.
In an Op-Ed in today’s New York Times, Goldman Sachs executive Greg Smith issued a damning resignation letter, in which he says the firm’s culture has deteriorated in his 12 years with the company. The problem, he writes, is that the firm cares more about making money and less about taking care of the customer.
“I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.”
Smith, who was working in Goldman’s London office, started at the firm after college, according to his Op-Ed.
The letter became a trending topic on Twitter this morning and has already spawned a clever parody, “Why I’m Leaving the Empire, by Darth Vader.” And it’s a major PR headache for the much-maligned firm. In London’s Telegraph paper, Iain Thomas writes, “This is what is known as a public relations disaster.”
Goldman’s PR department responded to the letter, telling the Times:
“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.”
Although this story is still developing, it does offer some important reminders for people working in PR departments or at PR firms:
Respond quickly and unequivocally. Goldman issued a response early on Wednesday morning, insisting it disagrees with Smith’s letter. The statement is nothing earth shattering; the important part is that the firm responded. That way, every media outlet that covered this story—and every media outlet is covering this story—can cut and paste its response.
Use your social media assets. This one’s tough for a regulated industry such as finance; however, if Goldman had a blog it could issue a lengthier response, in which it breaks down each point in Smith’s letter. Without a blog, Goldman has to wait its turn in the print media, if that’s how it chooses to respond.
Communicate to employees. Perhaps Goldman took the step of sending an email to its employees, explaining the letter and offering a formal rebuttal. If not, it certainly should. More than a PR crisis, Smith’s letter has the potential to stir greater angst among the firm’s employees—and that might mean more resignation letters. (Website idea: WallStreetResignationLetters.com.)
Dust off the crisis plan. This is why you have a crisis plan. If you don’t have one because the brass won’t allocate time or resources, print out Smith’s letter and take it to your next meeting. It will probably share the sh*t out of your media-shy executives.
Panic a little bit, but not too much. Of course, a very public resignation letter from an executive at your company is going to spark anxiety; however, some in the media have questioned whether it will have a lasting effect on Goldman—especially for a firm that’s weathered its share of crises. In The Atlantic Wire, Dashiell Bennett writes: “The fact that Goldman—despite a rough year of earnings and a public approval rating rivaling Congress—is still one of Wall Street’s most powerful firms, suggests that the ‘Vampire Squid’ really can’t be killed.” Ultimately, if your firm is known as a “Vampire Squid” and it’s still among the most powerful, a PR crisis like this might not hurt as much as it seems. Although the letter, the nickname, and the approval rating suggest the firm could use a rebranding that starts at the core of the organization and not simply a surface shine.
Interestingly, Goldman’s PR department made headlines on Tuesday after the Times reported that the firm officially hired a new chief, former Clinton White House spokesman Richard Siewert Jr. He is replacing Goldman’s longtime PR director Lucas Van Praag, who retires from the firm this month. Good luck.