Reading the opinions of the very public Goldman Sachs resignation runs the gamut of responses. Here are the six themes I have seen since The New York Times op-ed was published:
- Shock and Awe – Equals parts surprise that Goldman got so bad and admiration that someone finally spoke up
- Indignation – Disgust that the author worked at Goldman for twelve years reaping healthy bonuses off of people behaving badly
- Cynicism – Guess what, these are bankers and this is what the industry is about, so get over yourself
- Righteous Anger – How dare someone act in such a callous and disrespectful manner (only heard from Goldman employees)
- Schadenfreude – What is bad for Goldman is good for the rest of us
- Resignation – There is no hope in the world and everything is evil and corrupt
While there is a kernel of truth in some of these opinions, there is also a whole lot of hyperbole. If you look objectively at the situation, this was merely one man who for whatever reason decided to act out his Jerry Maguire fantasy. Outside of one published letter, we have no idea what went on in his head or the events that led up to this event.
What is more interesting is what these opinions say about how we view business, culture and money. I see the point of many of the cynics that said Goldman has always been in the business of making money. However, while we excoriate bankers for excessive and blatant greed, is business not about making money?
Bankers are an easy target because it has been so profitable and the bonuses so visible. Add to that the 2008 financial meltdown and a history of regrettable behavior in previous crashes, failures, and frauds, and it is easy to sympathize with the growing chorus of disgust at the financial services industry. Meanwhile, the economy remains stagnant, wages are static, and many people have gone jobless for years without any hope for employment.
Regardless of the industry though, the truth comes back to the fact that business is about money. In banking, it is obvious whether it is loans, trading, or issues shares. But whether it is a law firm, a hospital, a manufacturer, a contractor, or a retailer, if you are not making money, your business does not last for long. Other than in the tech startup fantasy land where revenue can be put off indefinitely when backed by VC dollars and billion dollar valuations, cash flow positive is not an option.
Money does not have to derail the culture of a company however. The need to generate a profit does inform every decision, but it should not be the only input in the equation. Businesses are beginning to take serious their broader responsibilities to their customers, employees and the community at large. Companies are putting actions to words and living out their values and culture. Founders and employees are both seeing the societal impact of their work and a greater social consciousness is taking hold in a younger generation that is more meaningful and permanent.
Business does not have to be all about the money. Even at Goldman, it was not always about ripping off the muppets and making as much money as possible. The culture shifted at some point from a customer-centric to a me-centric attitude as mentioned in a response by Lawrence Lessig . When the incentives changed, a new culture evolved.
Where leadership has the most impact is in establishing the culture. The decisions that leaders make and the way they act on those decisions flow down throughout the organization. Business does not have to be about a culture of money; it can be a business with a culture that is passionate about something and happens to make money. If leaders are only focused on maximizing profits and shareholder value at all cost, employees will respond by cutting corners at the expense of others. If leaders are focused on maximizing the value for customers, employees will respond in kind. Both are methods of building a business, but only one will become the core for a lasting company.
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