I Wish I Knew How to Quit You


Goldman Sachs employee Greg Smith made a big splash with his March 14 resignation. He emailed his bosses at 6:40 A.M. London time, but neglected to inform them that a long op ed piece would appear in that morning’s  edition of the New York Times. The 1,300 word letter described a culture of greed and contempt for clients, with employees referring to them frequently as “muppets.”

An excerpt from the essay:

“What are three quick ways to become a leader?[at Goldman Sachs] a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them.”

As resignations go, it was spectacular (in that it created quite a spectacle.) It’s one of many public and entertaining resignations over the past years, and it immediately spawned internet parodies, including one by Darth Vader (“Why I am leaving the Empire.”) Mr. Smith must have contemplated this move for weeks or months; the letter reads like the letters therapists advise patients to write as catharsis when they are harboring deep psychic wounds. The difference is that therapists recommend that you tear the letter up after writing, not send it to the New York Times.

Day One of your public and spectacular resignation must be quite a rush. Your letter goes viral, a dozen witty parodies show up, and the press camps out outside your employer’s building asking for comment. Very satisfying. Day Two must be a bit of a letdown. Ditto for Day Three and Day Sixty-Three. I imagine that on Day Sixty-Four, you hear from your former employer’s attorneys. Eventually, your job search may merit a day count like the Iran Hostage Crisis, with Ted Koppel solemnly intoning, “Day 187, and still no job offers for whistleblower Greg Smith.”

It takes a lot of courage to do what Smith did, and a March 15 New York Times article quoted one of his friends as saying “I think this was the ultimate act of loyalty…He has always been an advocate for the firm, but he wanted Goldman to do things the right way. In his mind, this was the only way that he could change the culture of the firm.”

Others, of course, think that his resignation was the ultimate act of disloyalty and will end his career in finance forever. What do you think?

Hero? Villain?

Would you ever make such a public departure from your employer? If so, please leave a comment.

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4 thoughts on “I Wish I Knew How to Quit You

  1. I had the chance to read the entire op-ed post. Odds are Greg Smith, after much deep contemplation, over time, chose to live the courage of his convictions. We need more people like him to step forward in today’s business environment. He wrote eloquently in his piece about the Goldman Sachs culture, when he he joined the company. He contrasted that with the Goldman culture he’s seen and lived with in recent years.

    Lehman Brothers and some other Goldman competitors no longer exist, therefore Goldman, already dominant in their field based on reputation and results in the past, deal with clients who have no one else to turn to, if you view their investments with a realistic eye. This makes it extremely important for clients to know they are being properly advised and making proper investments; mostly based on trust between clients and Goldman. This involves pension funds, hedge funds, and different levels of government, among other clients. How Goldman treats clients ripples through the whole American economy. It’s imperative for clients to know Goldman’s culture, changes in that culture, and whether the culture at Goldman is client-centric.

    Greg Smith has made a moral choice. Moral choices are almost always no-win choices. A person has to live with his/her conscience. I doubt Greg Smith is headed to the “Poor House” anytime soon and Goldman Sachs responses to date have not encouraged in me a belief that Greg Smith is/was a rogue employee. True, Goldman Sachs may send a legal tsunami of lawyers and lawsuits at Greg Smith, eventually forcing him to recant all he has said, and courts being what they are, Goldman may even extract a monetary reward out of Greg Smith. Justice too often involves who has the deepest pockets and the most sophisticated legal team, which Goldman wins hands down. Goldman also has many former and recent employees in influential government and regulatory positions, who stand to lose in prestige and position, if Goldman is shown to be what Greg Smith says they are today. Self-interest would surely lead such people to protect Goldman Sachs.

    Time will tell if Greg Smith has done the right thing. I think he has. It is up to everyone else now to demand an indepth look into how Goldman Sachs has operated in recent years. Even before Greg Smith did what he did, much has been in the news about Goldman’s business tactics before and during the meltdown of the economy. Perhaps this could be the real beginning of looking into, what appears to be, various areas of corruption that led to our economic downfall. Sadly, odds are, after a flurry of news stories, all will return to business as usual. If you have a pension, invest on behalf of a city, county, state or the federal government, or are a major corporation doing business with Goldman, I would be worried about “business as usual.”

    I’m sure my opinion is a minority opinion. I was pleased and impressed to read the many positive things Greg Smith had to say about Goldman Sachs based on his own work experience. That he saw the culture change to one he felt was not in keeping with its past is both sad and alarming. His goal: Wake up Goldman Sachs management. Isn’t this what you try to do when you see a close friend headed down the road to destruction? Isn’t there a saying that goes something like this: “Admonish a wiseman and he will thank you. Admonish a fool and he will view you with derision and laughter.” May the truth speak and all be made better for having heard the truth.

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  2. Would you ever make such a public departure from your employer? If so, please leave a comment.

    My actual comment to your question is this: It has been made nearly impossible to make such a public departure from an employer today. You must be very high up in an organization to have hope of surviving potential company retaliation. If you are too low in the company, what you say, even if true, will be dismissed. At best you will be labeled a “disgruntled employee.” Also, with most companies today, you must sign a document upon leaving the company agreeing to say nothing negative about the company, especially if you get a severance package. (I doubt Greg Smith got one!) Companies have made it legal policy to stifle dissent in the workplace. Also, after leaving the workplace through resignation, termination, moving, etc. (I will skip how even Facebook and other internet social and public forums are monitored by some companies today. You have covered that nicely.) I even understand that up to a point. People can and do run down companies without cause. However, some companies problems are so obvious their competitors know their faults by reputation. In some cases like that, it might help if someone spoke up, but fear and the legal system, will silence them.

    Once upon a time, I might have done what Greg Smith has done, from a much lower company profile, of course. A person must live by some personal moral code. However, feeling pressed to speak up from having a moral conscience, after attempting to communicate from within a company, is tied down by too many legalisms today. Some of my readings, but not all, indicate this is one of the reasons why KODAK is in Chapter 11 bankruptcy today. Many saw the future, tried to communicate about it, but found the KODAK culture in denial. Self-delusion replaced critical thinking. Had a top manager chose to speak out publicly, the person likely would have been ridiculed and soon forgotten.

    I have heard people in the mortgage business tell of their hands being tied legally, while having to give mortgages to people they knew could not pay them off. Some people even left the field, knowing a day of reckoning was coming and their conscience told them to get out of the business. Yet the only safe thing to do today is to quietly walk away; move to a new job or a new field. Moving to a new field can be hard after 20 to 30 years devoted to one field you were sure you would spent your entire worklife in, even if not with one company. Until we have better moral leaders at the top of companies, people with a moral conscience, employees at every level virtually, will have to walk away, if they can, to maintain their own personal moral conscience.

    I sincerely believe most companies do their best to have leaders with a moral conscience. Yet, I also believe some very powerful business leaders, through the wealth of their companies and their personal wealth are imposing a very different moral conscience on everyone, from competitors to employees to consumers. This leaves Greg Smith the rare, probable “good apple” in a world fast losing its moral compass. That’s too bad. It narrows the options for positive change in company cultures everywhere.

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  3. I am just now reading “When Genius Failed: The Rise and Fall of Long-Term Capital Management” by Roger Lowenstein . . . that talks about the “hubris” of companies like Goldman Sachs . . .

    We as a country suffered the effects . . . then in 2008 the world suffered the effects . . .

    I agree, it probably will end his career forever . . . but, if the cycle continues . . . it will probably end Wall Street . . . as it has decimated Main Street.

    It appears that it wasn’t just a job to him . . .

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