We Guess He Won’t Be Getting a Gold Watch

Should we be encouraged or discouraged by the op-ed that’s been heard ’round the world?

Until today, Greg Smith was an employee at Goldman Sachs, where he was executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa. His parting gift to his employer, however, was an article for the New York Times opinion page in which he wrote, “The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.”

Greg Smith

According to Smith, Goldman Sachs has become all too happy to put its customers last, as long as it can make money. The firm rewards all the wrong things and has lost its soul. “The firm changed the way it thought about leadership,” Smith wrote. “Leadership used to be about ideas, setting an example and doing the right thing. 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.”

The good news, perhaps, is that companies behaving irresponsibly will see their employees leave, at least sometimes and at least eventually. The bad news is that Wall Street’s mindset and behavior may be as bad as many of us fear.

We’ve written before (more than once) about what Peter Drucker had to say about integrity. However, he wrote about it so often, considering it to be of such fundamental importance, that we could cite him time after time and never use the same quotation twice. Drucker didn’t bring up integrity as an exhortation. It was a building block upon which success had to rest—or else failure was assured.

“By themselves, character and integrity do not accomplish anything,” Drucker wrote in The Effective Executive. “But their absence faults everything else.”

Character was not something any leader could “fool people about,” Drucker noted in The Practice of Management. “The men with whom a man works, and especially his subordinates, know in a few weeks whether he has integrity or not. They may forgive a man a great deal: incompetence, ignorance, insecurity or bad manners. But they will not forgive him lack of integrity. Nor will they forgive higher management for choosing him.”

Which is why, in the end, Greg Smith couldn’t forgive Goldman Sachs.

What do you think? What effect, if any, will Smith’s outcry have?