There’s an interesting article in the New York Times today by Greg Smith titled “Why I Am Leaving Goldman Sachs”. After an impressive career with this professional services powerhouse, Mr. Smith found that the values he embraced, touted and evangelized for the firm now rang hollow. He speaks about the erosion of a culture that embraced the priorities of maintaining client trust, reflecting a “spirit of humility” and teamwork. Those were the big draws for Mr. Smith when considering his professional options. I don’t want to sound naive – Goldman, as any other firm of its kind, will always reward rainmakers with additional compensation and bonuses, and though it may downplay the ever-present eat-what-you-kill undercurrent that permeates much of the professional service zeitgeist, it is certainly a widely accepted approach. All professional service firms do it to some degree.
What has happened at Goldman is also not unique. I think it is indicative of the cultural shift that occurs when firms move farther and farther away from the tenets that made them great. Organizations that were seen as formidable now seek to become formidable-on-steroids. Firms that aspired to greatness – and achieved it – through the principles of trust, team effort, shared focus, may no longer be practicing such fundamentals of good business. These are still the words that are espoused, but the authentic practice is devalued – and certainly no longer rewarded. The most foreboding harbinger of all is that some who excel at making money, used to be content with increasing monetary rewards. Now they are expecting to be provided positions of leadership as part of some perceived additional entitlement. I have been in the world of professional services for more than twenty five years (true, I started when I was three ), and it is undeniable that Mr. Smith’s observations reflect a train that is racing out of the station. Firms like these will always compete with each other based on their financial results; perhaps in the past they compromised less on the collective ethos upon which such success was founded.
I do believe there is good news for those of us who forlornly watch the Kool-Aid we drank becoming increasingly rancid. I think firms will return to their basic values over time. Firm will become indistinguishable from each other for awhile, distinctions only made my profits and global reach. Each organizations’ Web page will speak to the brilliance of its teams, state-of-the-art-technology, ability to respond to client needs in real time any where in the world. Ultimately though clients will demand the return to an organizational philosophy that is evidenced in action as well as word. Clients will drive the pendulum back to the values of trust, quality and collegiality, for the color of money will be making them green (with figurative nausea). Profits per partner may go down – and they arguably should if it means a return to humility, shared effort and collaborative success. Perhaps this is the dark night of the soul for firms like Goldman. Perhaps it is the only way they will again experience the dawn. Continue reading