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.
Waiting for the Karma Truck 
Was going to email that article to you today to get your thoughts but you’re clearly too on the ball. My cynic sense started tingling when I read his editorial (thinking it was him burning a bridge on the way to retirement, which is less noble than up-and-quitting), but he must be a young guy based on how long he’s been there. So, good on him. It certainly has people talking.
I agree with you – on all points. He may be burning a bridge, but my hunch is that he knows exactly what he’s doing – whether going off on his own or joining a boutique firm which still holds values similar to his. To his credit, ten years in a firm like this is a long time and his trajectory was quite impressive. As you say, good on him.
Having experienced this awful trend in the healthcare field, I look forward to the pendulum swinging the other way. I find the greed and deception that goes on, for the sake of the almighty dollar, to be frightening.
I share your desire to see things swing in the other direction. I am confident it will – I just can’t predict when the seduction of more and more money begins to lose its luster..
My understanding is that he burned this bridge after getting a very sizeable bonus. He may be young, but I strongly suspect he has enough assets to carry him for some time. I am not knocking him as I don’t know enough about him or Goldman to make a judgment, but I have a hard time believing that his hands are clean. There is also likely a book deal in his future.
I do for sorry for the Public Realtions team at Goldman as I suspec that they will have a very bad week.
Great post on a great site.
There’s no doubt that the bridge is burned – probably beyond recognition :-). But credit to this young man – it’s extremely rare for someone to come out of these firms wiling to put their reputation on the line (even if he is able to support himself on a sizeable bonus for awhile). It’s a bit like a cabal – a lot goes in, and very little comes out. If you look at his trajectory though – from jr analyst to executive director of a large region in ten years, that’s pretty impressive. Who knows – maybe he committed some egregious sin. But at the end of the day, much of what he describes as the erosion of an essential value system is pretty accurate. Thanks for your comments and thanks for checking out the blog. I’ve just started following yours – very impressive!!
Time flies when you’re having fun, and we tolerate a lot in the hunt for the almighty green. In any new job, we all experience the honeymoon period. The company and the people are great, and the work is interesting and maybe even challenging. Over time however, as we scurry along the hallways to super stardom, we inadvertently kick up a pebble that sneaks its way inside our shoe, and nestles itself between the sole of our shoe and a soft spot on the sole of our foot. We all deal with this in our jobs. We adjust or compensate how we walk so that the pebble doesn’t irritate us. Over time though, as a corporations value set changes (oops, I meant to say as their goals change) and as our goals are achieved or refined, more pebbles find their way to the soft underbelly of both of our feet. At some point, whether it’s a certain manager, or the politics, or the changes in the compensation model, the pebbles become too irritating to ignore. Ahh, could it be a conscience developing? Money in the bank? Another job offer, family conflict, kids with problems, or illness in the family? Who knows. I’m sure the story is different for all of us, but when the pebbles accumulate, time no longer flies, and the hunt is just not the same as anymore. We need a new game
Great analogy George – where are those Scholl’s foot pads when we need them? 🙂 Truth of the matter is, I’d rather not compensate serious discomfort but change paths and buy a new pair of shoes..
There was a news story a few weeks ago about the New Orleans Saints paying bounties to their players for hurting players on opposing teams. What surprised me most was that people reacted with disbelief about this happening. My guess is that it is a fairly regular practice and this team just happened to get caught. In a violent sport how do you get ahead? Be more violent. How do you get players to be more violent? Pay them a bonus.
The same happens in business. Greed drives more greed. Companies as well as individuals get a taste of success and want more success. Somewhere along the line some of the black and white is lost and people begin to operate more in the gray areas which doesn’t bother anyone as long as it brings more success
It will be interesting to see what happens to him from here. Will another firm applaud his decision and take advantage of a good PR opportunity by hiring him, or is he done?
I remember that story – it got a lot of press because the Redskins are equally comparable (and here in DC disparaging words against the Redskins is parallel with the commission of one of the seven deadly sins). You’re right greed begets greed, more greed fuels a desire for more power, etc…I guess there is a part of me that believes that somewhere, those with a remaining modicum of pull will gather in an energized rush of proprietary indignation and insist that their business won’t go the way of every other successful one. Sigh – ok, it was a nice dream. I think he’s go to a smaller firm, maybe get a book deal and ride off into the sunset. Goldman will get its PR folks behind this story, minimize this guy’s contribution to the firm, maybe intimate some serious wrongdoing, etc and then move on…
Seems many folks are noticing the stuff floating in the rancid kool-aid, these days. All the jargon around fostering client loyalty through engaged associates in an innovative environment, may be pretty difficult to deliver in the middle of a clash between stock holder interests and the employee value proposition. Driving down cost of delivery, improving key performance indicators, right-sourcing….seems like the EVP may just not be at the top of the list, these days. I’m hopeful that the knowledge exodus will be a wake up call, and best in class companies will listen so that once again the values posted on the corporate web site truly are a rally cry and that unify the troops.
Couldn’t agree with you more Beth – thanks for your comments. I think the human capital drain will have to loom more menacingly, and the client cry for a rejection of hubris and a return to quality work with outstanding, committed people (who are not already in the revolving door) will have to get much louder before we see a return to something that resembles something for which employees AND employers can feel genuine pride. Great to ‘hear’ from you!
And on top of all of this corporate” misbehavior” is the mirrored image of our congress and it’s behavior…have they lost their mission to be of the people and for the people? How do we get those willing whistleblowers to get the attention that this young man has garnered?
Great question – one for which I am not smart enough to provide any answers. The division and derision within the political system has reached such a pitch that I can’t imagine any progress being made in the area of honest disclosure for quite a while. Ever hopeful though, and a strong believer in the power of the pendulum, I believe that one day it will begin its rhythmic swing into a more reasonable position.