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