The resignation letter that reveals allEveryone understands how important company culture is in retaining, obtaining and motivating staff and clients but sometimes the original purpose of a company gets distorted and this week a possible example of this was made public when Greg Smith a middle level manager in Goldman Sachs London office resigned in an e-mail message sent to his bosses and copied to The New York Times.
In it he claimed that Goldman Sach’s staff regularly called clients muppets and encouraged them to buy products that were not in their interest but which made his company more money.
Smith went on to say “I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival. It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.”
No one apart from the people concerned can know if what he claimed is true Goldman’s top two executives, Lloyd Blankfein and Gary Cohn, said in a letter to employees: “We were disappointed to read the assertions made by this individual that do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients. Everyone is entitled to his or her opinion. But it is unfortunate that an individual opinion about Goldman Sachs is amplified in a newspaper and speaks louder than the regular, detailed and intensive feedback you have provided the firm and independent, public surveys of workplace environments.”
What is clear however is that more and more examples of a debate about company cultures are happening and that if a company says one thing “we always put our clients first” but does another rewarding people for doing an unattractive deal or charging a new client too much then staff pick up and understand that message.
The challenge therefore is to really articulate a company culture not just in mission and vision statements on the wall but in every aspect of the company from product and service offerings to reward and recognition programmes, promotion opportunities, and the structure of bonus payments.
It is probably more harmful to spend £100,000’s on creating the words around company culture and then ignoring them than to do nothing at all.
The problem is who defends company culture when often much more powerful voices talk about for example short-term profit, I think it’s the responsibility of two people the HR Director and the Marketing Director because they control the hearts and minds of the employees and what is ultimately the offering that the company makes to its clients.
Smart companies understand that getting the culture right and matching that to clients needs is what ultimately makes for long term success.
Wanda Goldwag is Non Executive Chair of True North Capital the Management Consultancy founded by Norman Burden, and herself, that lives and breathes the people challenges that most companies no matter what their size face as they go to great lengths and expense to ensure they attract, retain and develop the best staff.
ONREC 19th March 2012