May 16, 2012
Greg Smith, formerly of Goldman Sachs, recently wrote an op-ed in The New York Times about why he was leaving the company. The piece is an eloquent testament to how a strong culture affects organizations.
Goldman would probably prefer to block out this PR nightmare, but Smith put it out there:
“Culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. 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. I no longer have the pride, or the belief.”
If Smith feels this way, you can bet that he’s not alone. The employee turnover is costing Goldman millions of dollars every year.
Company culture is defined as the values, attitudes and behaviors that contribute to the unique social and psychological environment of an organization. It’s otherwise known as the “way things get done around here.”
Although culture is in vogue right now because of Smith’s account and others, its status as a major player in organizational success goes back decades. In the 1990s, Harvard Business School researchers James Heskett and John Kotter examined the corporate cultures of 200 companies. They assessed how each company’s culture affected its long-term economic performance.