Here at Zeitgeist we do a lot of work with clients in terms of creating cultures that enable delivery of a successful strategy and business plan. It is very rewarding work as we help clients define the type of culture that they want and need and then work with them to deliver that culture over time. Culture is a regular theme within these blogs.
Bearing this in mind, we read with interest the recent article in the New York Times from a senior Goldman Sachs executive explaining his reasons for resigning from the bank and his description of the prevailing ‘toxic culture’ he experienced there. Greg Smith, an executive director and head of Goldman Sach’s US equity derivatives business in Europe, the Middle East and Africa, wrote the article apparently as a wake-up call for the bank’s board members.
Citing issues such as senior managers referring to clients as ‘Muppets’ and suggesting that the entire focus of the business is about how much money can be made from clients, Mr. Smith suggests that this will eventually bring about the downfall of the 143 year old institution. For him, and us, bad culture delivers bad performance.
Unsurprisingly perhaps the bank has released a statement refuting the claims and of course the article is one man’s perception albeit the perception of a senior individual within the bank.
However, your corporate culture is the foundation for success. It is not something to be tied up in some form of tacky mission statement and it is not what you aspire to be, something that you say you are or something you describe yourselves as. Culture is how you act and this directly affects the results you get.
Leaders set the tone and they create the environment for the culture. Now this can either be done unknowingly by not recognizing that they play this role, or can be done intentionally by understanding that they will get a culture anyway and so determine to be intentional about creating the right culture….
In his article Smith states that when he joined the bank the culture revolved around “teamwork, integrity, a spirit of humility, and doing right by our clients”. He goes on to say “The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years … I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years.”
Sobering words.
Regardless of whether he is right or wrong about the Goldman Sachs culture Mr. Smith clearly gets the importance of having the right culture and understands the risk of having the wrong culture. He writes “You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about ‘Muppets’, ‘ripping eyeballs out’ and ‘getting paid’ doesn’t exactly turn into a model citizen.”
Now we are not rocket scientists but we come across enough good and bad corporate cultures to state unequivocally that those firms with the right culture out perform those with the wrong culture.
How much time do you spend on developing the right culture? What tactics are you using on a day to day basis to shift the culture to one that supports your business goals and how many conversations do you have with your team around values and behaviors?
If you have not yet grasped the link between culture and performance, take time today to give it some thought and decide what needs to change…….
