It is PR gospel that Goldman Sachs and its leadership have committed a series of communications blunders, particularly in the past two years, which have dinged its otherwise stellar reputation. As a result, the firm has embarked on leadership “road shows” and other PR activities in an effort to repair its image. Some suggest that Goldman must change its culture at the very core. Our question: isn’t the deeply ingrained and truly unique culture a critical ingredient to the firm’s success?
The Abacus debacle (regarding fraudulent mortgage-backed securities) resulted in Goldman having to fork over $550 million to settle the charges. CEO Lloyd Blankfein’s declaration of doing “God’s work” — even if taken somewhat out of context — will be repeated as a PR misstep for the next decade. Embarrassing emails from Goldman mortgage salesman Fabrice Tourre show a real hubris “the whole building is about to collapse… Only potential survivor, the fabulous Fab” and set off a firestorm of reporting and investigations that dealt a serious reputational blow and required real costs. It was even suggested that Goldman was responsible, in part, for the Greek debt crisis. And, now, of course, the mishandling of the Facebook deal, skirting regulations, leaking information and blocking US investors. (See articles on the Facebook mess from The Business Insider and DealBook).
So, it seems perfectly reasonable to suggest that Goldman must address their reputational issues. Some may argue that the only true fix is a complete cultural make-over. But, we wonder… Consider that confident, power-wielding and influential image Goldman has carried for over 140 years. Consider the track record of success and the fact that it remains the sought-after destination – the “golden ticket” for ivy-league B-school graduates. Look at the esteemed alumni who include governors, congressmen, cabinet members and advisors etc. Is it not quite possible that some of the very perceptions that hurt them, also attract critical audiences including clients, peers and talent?
For Goldman, we might argue that not all image-boosting PR activity will help and may in fact hurt. A whole cultural shift may soften Goldman’s image, but do they really want “soft”? It is conceivable that a kinder, gentler Goldman can also mean a less competitive, less talent-attracting organization that lost its edge, lost its way? And, that would spell disaster.
Perhaps the best advice calls for a parsing out of PR fixes. Certainly, any illegal activity that Goldman is engaged in should be eliminated and PR should support those policies and protocols. But what about its practices that are perceived as “pushing the envelope” or edgy? What about actions that project an image of self-assuredness and almost bull-headed confidence? In this very specific culture, is arrogance always a liability or is it in fact a perception asset?
Do you agree that Goldman may not benefit from a total image overhaul? Should they be selective on their fixes or try to address all criticisms? What would you advise?