I’ve been following the response to Greg Smith’s resignation letter in the New York Times with great interest over the past several days. The letter has been analyzed, parodied and discussed at length. What I find particularly fascinating is that the response brings together a number of issues I regularly look at: the power of social media in shaping public discourse, the importance of corporate reputation, as well as communication strategy.
The Atlantic Wire reported that the letter cost Goldman $2.15 billion in the markets the day it was released, showing the value of reputation, particularly on Wall Street in today’s environment. In the post-Occupy Wall Street environment, large financial institutions are looking to rebuild trust with the public, clients but also their employees. Greg Smith’s resignation was clearly written with this hostile environment in mind.
An internal memo by Goldman Sachs CEO Lloyd Blankfein was published in Bloomberg shortly after it was sent out to employees that had clearly been written with an eye to being released publicly. Blankfein tries to emphasize that Smith represents a minority opinion and that Goldman works hard to do what’s right for clients. His quick response to try to maintain trust with his employees and the public with a well crafted memo was smart, but not sufficient to quell public discourse.
The Associated Press published an article in the Washington Post, entitled, “Goldman Sachs muppet essay only the latest in a proud tradition of bridge-burning”. It explores the human impulse to have a “Jerry Maguire inspired farewell” and therefore part of the reason this letter struck a nerve and went viral. I’m quoted in the article talking about how this is often a way for employees who feel powerless to enact change to feel like they have a chance to take back some of that power.
The social media environment has kept the letter alive through sharing, but also interacting with the letter through parodies–everything from fake responses from Blankfein to sharing of resignation letters from the past. The New York Daily News did a great roundup of some of the best parodies out there, but one of my favorites is a fake resignation letter from the New York Knicks coach Mike D’Antoni (who really did resign the same day as Greg Smith) published in the Wall Street Journal.
Depending on Greg Smith’s future career goals, publishing his resignation letter in the New York Times may not have been wise, but it gives us another opportunity to bring reputation, trust and the power of social media back to the forefront of conversation–and hear a few good Darth Vader jokes as well.
Yesterday I wrote a post for US News and World Report’s Economics blog, entitled “How Apple Gets Away With Things Other Companies Couldn’t”. It is already spurring debate over on their blog–I think it and some other recent posts on the same blog by my colleagues from the Tuck School are worth a read. You can read my post here and see the rest of the Economic Intelligence blog here.