Friday 29 June 2012

Letter to The Times 19/03/2012

Dear Sir,
"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."

This is the statement put out by Goldman Sachs regarding Greg Smith resignation. I feel sorry for Goldman’s; they could be falling over their own sword. They certainly have a problem with their own PR and in my view lack a little social awareness. They appear to underestimate the mood of the general public who do not take themselves as fools. Let me try to illuminate more thinking to some distortion here and try to solve their problem which is clearly endemic and as I understand pretty toxic. Let’s start by taking some of the dressing off this opening statement.

As they are an investment bank, we can use the word money.  ‘We only depend on rich clients; that’s how we make our money.’ Let me go further and throw the word success into it with a bit of emotion. ‘We only depend on very rich clients, this is how we make a lot of money this is what we need, we are good at it and we want more. This is the fundamental truth at the heart of how we conduct ourselves.’ I think you see what I am getting at. Greed we have already learnt in a culture is intoxicating and I have heard it is getting worse. It is linked to my theory in business where we stop asking ourselves the ‘why’s’ and the ‘how’s’ but just do. The only ‘how’ we are familiar with; is how can we make more? Some of us are getting cleverer at it than ever before. I have seen this culture before amongst my former colleagues certainly in myself as a former Managing Partner of a leading Executive Search Firm which too mind you was ‘fee earning.’

The crisis of 2008 has now been four years, of which the lessons should be learned in our mentality, personal behaviour and conduct. Humility seems to be a rare commodity. By now I was hoping for a bit of common sense that we would see statements along these lines; ‘This crisis has taught us that we have learnt our lessons and we are deeply sorry of the past debts we have contributed to our governments and the effect it is still having on our wider society. After some soul searching we have had a fundamental shift in our own values, we now understand that with an organisation that is client focused we have had to change and attain a deeper sense of our own selves in each and all of our fee earning employees & partners. We have learnt finally to understand and serve better the needs of our clients which are the key to our future strength.’ This is the fundamental truth which lies at the heart of how we now conduct ourselves.

Do you see the shift?  It could take a while; change in mentality requires a change of heart which is a challenge particularly when money is involved. It would perhaps require change in the way they conduct business. One idea is dismantling the concept of ‘fee earning’ and introducing normal salaries at partner level. In general I believe the mood of the public is looking for a change and moreover demands it. Pride & stubbornness in persons who have the combination of wealth and intelligence are not easy to deal with. They don’t like to be told what to do. Particularly in a time when they were once used to it as per in our last growth period, they will do anything to maintain it. I have recognised this in myself and took me a while to understand. The pursuit of profit can be a good camouflage to our own weakness. The danger is we can view wealth as an innate right or as something delusional that somehow we are masters of ourselves when invariably we are the very masters of disguise. 

‘We must become the change we seek in the world’ Gandhi.

Yours sincerely,

A muppet

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