Goldman Sachs Has the Right Idea on the Times Op-Ed: Do Nothing

The PR Crisis Is Much Ado About the Obvious and Will Fade Quickly

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We need to get back to basics. Put clients' interests and humanity first. Draw on founding traditions of purpose and service. Greg Smith said or implied such things about Goldman Sachs in a resignation op-ed published by The New York Times last week, and it lit up the mediasphere with lots of negative commentary (one article even alleged the letter was proof the company orchestrated the mortgage meltdown for its own gain). It was a full-blown PR crisis.

But as of this writing, Goldman has done next to nothing. I think it's the right call.

I need to disclose my connection to them before I go further. The firm funded my fellowship at the Smithsonian last year, during which I worked on education outreach for the museum. I met someone from the company one time for about two minutes, at which time I said thank you. So I feel no debt to Goldman, and I have no ongoing or anticipated relationship with it.

There are three broad reasons why staying mum is the right communications strategy.

First, the article isn't actionable. I'm not a lawyer or a regulator, but it clearly contains no allegations of legal wrongdoing. Smith was simply (and apparently sincerely) unhappy with the attitudes and culture of Goldman, which I'd paraphrase as being obsessed with making money beyond any and all other interests. OK, maybe not my cup of tea either, but worshipping Mammon isn't a crime. The article decried no lawbreaking, the way Jimmy Stewart did while playing a different Mr. Smith in a movie about corruption in Washington. It was more like the memo . . . no, the mission statement . . . that Tom Cruise wrote at the start of the 1996 romantic comedy "Jerry Maguire." I encourage you to look it up online. The tone and language are eerily similar, and while the idea that we should all be better people is laudable, it doesn't necessarily prompt a particular response. In the movie version, Cruise doesn't quit but gets fired for writing the thing, and the business continues along its former path.

Second, the "crisis" will be short-lived. That's not to say that there aren't legitimate reasons to have an ongoing public conversation about the role of financial markets in our country's public policy, or that Goldman shouldn't feature prominently in such a debate. But the idea that the firm exists solely for the purpose of making money isn't a revelation, is it? And anybody who has worked at an ad agency can recall referencing a client with a less-than-complimentary term. I'm reminded of the buzz surrounding "United Breaks Guitars" a few years ago, which was a YouTube movie about a guitar that got smashed on an airline flight. No extended debate ensued about the way airlines handle baggage because we already knew the score. Smith's letter declared that water is wet, and it allowed people who feel the same way to agree with him. An echo chamber is not a conversation, agreeing doesn't sustain debate, and no amount of social-media sharing can turn transitory buzz into something lasting.

Third, there's nothing Goldman can say anyway. The experts might recommend issuing statements and addressing stakeholders -- only a short memo was released -- but those words would have no more staying power than Smith's. If there's a truth underlying the accusations, it's an operational problem, not a communications issue. Long ago, Wall Street financiers could somewhat legitimately claim to "give back" to the nation by helping fund railroads and skyscrapers. They also regularly did things far more shockingly immoral if not illegal compared to what Smith alleges at Goldman, and they didn't much care what anybody thought about it (and it wasn't a secret anyway). If Goldman has to do something, it needs to actually do something, like create funds for infrastructure repair or startups in underserved communities. For all the talk about creating marketing with meaning or spirit (or whatever), it's just happy talk unless the business changes how it conducts business for good, sustainable business reasons, not PR.

There are lots of thorny issues going on in our country and around the world, but the fact that Goldman Sachs is run by a bunch of ruthlessly successful people isn't one of them. It's too easy to gripe about them not being humane enough, and it's insulting to our intelligence. We have the responsibility to demand more of ourselves, our media and our government. Our difficult issues won't be resolved in the court of public opinion, though maybe Smith has satisfied his own.

Goldman is right to skip mounting a defense. If there's truly something wrong, there's nothing it can say that 'll fix it.

JONATHAN SALEM BASKIN is president of a marketing decisions consultancy and author of "Tell The Truth." You can follow him on Twitter: @jonathansalem.
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