Jack and Suzy Welch

Goldman and the culture-killing lesson being ignored

Jack and Suzy Welch
Mar 23, 2012 12:08 UTC

In the great, collective gasp that followed Greg Smith’s blistering public resignation from Goldman Sachs, one reaction struck us as particularly prophetic. It was a comment from James Gorman, CEO of Morgan Stanley. Don’t exploit Goldman’s woes, he said a few days after Smith’s letter ran in the New York Times: “There but for the grace of God go us.”

Some took Gorman’s remark as an admission of sorts – as if he were saying, “Hey, Smith’s criticisms could’ve been leveled at any firm on Wall Street.” Others took Gorman at his word when he explained that he meant all companies are vulnerable to a disgruntled employee who joins forces with a simpatico media outlet.

But we have a third interpretation that, to our minds, is far scarier than either of those takes. The Greg Smith case is a harsh reminder that most companies don’t face up to one of the most immutable rules of business: Your soft culture matters as much as your hard numbers, and if your company’s culture is to mean anything, you have to hang – publicly – those in your midst who would destroy it. It’s a grim image, we know. But the fact is, creating a healthy, high-integrity organizational culture is not puppies and rainbows. And yet for some reason, too many leaders think a company’s values can be relegated to a five-minute conversation between HR and a new employee. Or they think culture is about picking which words – do we “honor” our customers or “respect” them? — to engrave on a plaque in the lobby. What nonsense.

An organization’s culture is not about words at all. It’s about behavior – and consequences.

It’s about every single individual who manages people knowing that his or her key role is that of Chief Values Officer, with Sarbanes-Oxley-like enforcement powers to match. It’s about knowing that at every performance review, employees are evaluated for both their numbers and their values, and that only four outcomes exist.

Mitt Romney: S#*! authentic people say

Jack and Suzy Welch
Mar 9, 2012 13:02 UTC

If one word sums up the analysis that has followed Super Tuesday, it’s got to be “Huh?”

Or taken out of shorthand: “Why is it that Mitt Romney — a candidate with mountains of credentials, a boatload of cash and six years of planning — loses where he should win and only squeaks by where he should clobber, all while Rick Santorum, a long shot if there ever was one, goes around capturing hearts and votes?”

“Huh?” indeed.

Not that there aren’t plenty of answers to this question. Quite the opposite. Everyone in the pundit-sphere, it appears, agrees in one form or another that Romney’s problem is about connecting with people.