By now, I probably don’t need to tell you who Greg Smith is.
Yesterday, Smith resigned as a Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa in the most public of ways: through an op-ed piece in the New York Times!
Since then, the piece has created quite a stir, including leading off last night’s NBC Nightly News broadcast (and perhaps others). As of early this morning, roughly 365 people posted comments to the op-ed piece on the NYT’s website and the news has been all over the business news channels, Twitter and the like.
This isn’t the first time a departing employee or executive has found an unusual way to tender his or her resignation. For example, I vaguely remember hearing about an incident where someone brought a cake to work colorfully decorated with their resignation letter on it. But I wouldn’t be surprised if this wasn’t the first time someone used the op-ed section of a major national newspaper to bid his or her employer farewell. (Be sure to let me know if this isn’t the case.)
In his op-ed, Smith cites the “firm’s decline in moral fiber” as the reason for his departure, writing:
It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.
Goldman Sachs (headquarters pictured above) responded to Smith’s assertions, saying that it didn’t reflect the way the company treated its clients.
So what’s the takeaway for HR leaders?
Merrie Spaeth, a Dallas-based communications’ expert, offers this assessment of Smith’s letter:
Normally, you’d say this is exactly the wrong, wrong, wrong way to go out the door. But this is like the woman who wrote the long letter to Ken Lay (Enron.) This is a very substantial, very senior, very well respected executive. He is actually sending a love letter to the firm, meaning—he loves GS and is willing to have a potentially very negative impact on his own position in the industry by calling them to account.
(Spaeth says she considers the op-ed piece credible because of what happened to “a good portion of the financial services/banking industry,” not because she personally knows Smith.)
I suspect the folks at GS may not see it the same way as Spaeth.
So returning to my earlier question of what this might means to HR leaders, Spaeth suggests the following:
I think the message for the senior HR executives is that you have to have functioning internal feedback and safety valves which hold executives accountable. (Think of Mark Hurd at HP and his behavior with the ‘escort.’ Think how many people had to know about that but no one stepped in and said, ‘Mark, pal, knock it off. No good will come of this.’ The GS example is potentially much more detrimental. Think of what just happened to Olympus, the Japanese company. They fired their CEO when he uncovered massive wrongdoing, and they thought they could get by.)