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The Goldman letter reminds us that culture is everything…

Yes, yes, I know I have been banging on about corporate culture in posts over the years on this blog, but today’s NY Times Op Ed: “Why I Am Leaving Goldman Sachs” appears to re-enforce the importance of culture audits.

In short the author, a senior executive, claims top management have let the culture of Goldman go to pot in the last twelve years. He says the culture now is one of pure greed rather than of serving customers.

Pretty brutal stuff. Not surprising to most of us outsiders though. Anyone who has read a book on the financial crisis probably had that feeling too.

So why don’t more companies, including Goldman, spend time understanding the culture of their organisations?

The word “audit” may be part of the problem here. Its so dull, so compliance-focused.

Perhaps if one replaces that word with something that is not pure snake oil corporate speak at the other end of the bulls**t scale, such as “talent management”, it might be a more compelling concept.

I’m struggling to find a better word than audit right now.

The bigger problem though, is that corporate culture is not really anyone’s responsibility at senior levels in large companies.

It falls between the two stools of the CEO and the head of Human Resources, in many companies I have observed or worked with/spoken to.

Whilst the CEO and top management are responsible for the tone from the top, the HR head is largely focused on employee processes, rather than the big picture.

So whose job is it? If CEOs are too busy or shortlived, and HR too technocratic, who should take charge?

It has to be a role for the head of either corporate affairs, or sustainability/corporate responsibility in my view.

Conducting such audits, for want of a better word, is brave enough. Publishing the results will be quite another.

But it’s where the transparency agenda is headed. Smart companies can jump on board, or risk ending up like Goldman Sachs: increasingly despised to the point where politicians will make life difficult for them because it will be expedient to do so.

3 Comments

  1. Nadine

    Stating the obvious, but if a financial firm didnt follow a culture of greed, they would see there profits slashed. Of course, one can argue that sound ethics and transparency are worth millions as its their reputation at stake, hence a price worth paying. Problem here is that their 'clients' are equally happy with their culture of greed as it inflates their portfolios and pockets alike. So until we change the consumer….How many decades until we see a true paradigm shift? Or am I being too pessimistic?

  2. Hi Nadine,

    I'm not 100% sure I'd agree here: Great companies are founded on serving customers. When they lose sight of this, they often arrive at major problems. That's a pattern well observed over the years. Loss of vision, mission and particularly values causes ethical incidents. For a player such as Goldman, that means global consequences, eventually. Clients are happy with good advice, which does not always serve Goldman's direct interest. So the culture of greed is not in everyone's interest. If it was, perhaps both customer and bank would be happy, but the costs could be externalised onto the rest of us. That, of course, is a whole other debate…

  3. Especially in a rigorously competitive environment like Goldman, I think that without a doubt, culture will continue to transcend from the executive leadership team. It's a fundamental characteristic (positive or not) to an organization that has an entrenched hierarchy, compared to a more horizontal or matrix org, and its monetary-centered mission. Not to mention, the emphasis on promotion, rank, and seemingly, acceptance of greed. Regardless of whether this link is real or not, the fact that there is any public resonation (humour found) in this just shows this resignation letter did not come out of nowhere.

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