Greg Smith, a Goldman Sachs executive, has resigned in a rather unique way, he’s written a very frank op-ed column in the New York Times, thereby fulfilling a fantasy held by every single person who has ever felt like quitting a job in a spectacular fashion. Mr. Smith, was head of Goldman’s United States equity derivatives business in Europe, the Middle East and Africa. He also managed the summer intern program in sales and trading. “I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work,” he says.
Smith’s letter cuts right to the bone, explaining that anyone who is not actually an ax murderer can succeed at Goldman Sachs by taking advantage of clients who trust them:
Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.
What are three quick ways to become a leader?
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.
Sometimes it can be hard to think of the extremely wealthy “elephants” as “customers,” but when it comes down to it, don’t they deserve quality service? Don’t they deserve to be treated fairly? Smith thinks so, and that’s why he doesn’t work at Goldman Sachs anymore.
He closes with this:
I hope this can be a wake-up call to the board of directors. Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.
NYT’s Dealbook Blog has the reaction from the non-ax-murderers at Goldman Sachs:
“We disagree with the views expressed, which we don’t think reflect the way we run our business,” said a spokesperson for Goldman Sachs. “In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.”
We suppose the firm’s clients will have the final say.
Why I Am Leaving Goldman Sachs [NY Times]