Interesting article here "Why I am leaving Goldman Sachs" by executive director Greg Smith: http://www.nytimes.com/2012/03/14/opini ... sachs.html Quote:It might sound surprising to a skeptical public, but 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. Smith is obviously from the old school that institutions like Goldman Sachs should be able facilitating business and investment rather than leaching off it: Quote:I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave. But this is the situation today: Quote:The firm changed the way it thought about leadership. 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. What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. Quote:It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Food for thought for those that think the financial crisis was down to government spending on health and welfare - you have the big fish at the top of the financial services sector actively trying to palm off dud investments on clients just to maximise their own fees. The argument that the financial services sector should be unregulated and left to the free market is false - its behaviour like this that regulation has to counter.

Interesting article here "Why I am leaving Goldman Sachs" by executive director Greg Smith: http://www.nytimes.com/2012/03/14/opini ... sachs.html Quote:It might sound surprising to a skeptical public, but 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. Smith is obviously from the old school that institutions like Goldman Sachs should be able facilitating business and investment rather than leaching off it: Quote:I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave. But this is the situation today: Quote:The firm changed the way it thought about leadership. 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. What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. Quote:It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Food for thought for those that think the financial crisis was down to government spending on health and welfare - you have the big fish at the top of the financial services sector actively trying to palm off dud investments on clients just to maximise their own fees. The argument that the financial services sector should be unregulated and left to the free market is false - its behaviour like this that regulation has to counter.

Expect a bullish and bullshittish response from Goldman Sachs on how they deny all accusations and always conduct business in their clients best interests, yeah, we know...

is anyone likely to be surprised by this?

I was just about to come on here and post this.

As someone who works in an investment bank (not Goldman nor as some BSD) I would say this is a pretty accurate reflection of what is wrong with IB culture, although thankfully it's not quite so aggressive at my firm.

Ultimately Banks are a very important utility in society and as a society we should push for them to benefit the wider needs rather than just their own (or that of the top earners within them).

Good post – so I'm not having a dig – but how do you actually do that?

This is not confined to investment banking. This is a product of buying into the garbage that comes out of American business schools. It's all targets, dumbing down, using scripts and treating customers as cash cows. It infests most UK businesses nowadays, big and small, and the public sector. What the buffoons who buy into the crap don't see is that far from enhancing the long-term values of their business they are detroying them - destroying reputations and trust built up over generations - like the guy is quoted as saying. Think of more or less any big company that you may have trusted 20 years ago or even 10 and think how they treat you now. What people ultimately want is quality and service, not to be treated as cannon fodder.

Because the public sector was ordered, by government, to behave like the private sector. Because as we must surely all be bored of hearing by now, 'private is always better than public'.

Ha ha.

But its raison d'etre is supposed to be to serve the public. The people involved need to have the wit to understand that and align their strategy accordingly!

Yes. But the Tories didn't (don't) believe that. Hence instructing the public sector to behave like the private. And, indeed, instructing the public sector to recruit from business – even if they had to pay far more to senior people to be able to attract them – because that would make those dreadful public services run wonderfully, just like the private sector.

It's one of the ironies when people on the political right whinge about high pay among public service executives etc. They never seem to understand that, though.

It's also why you get increased HR departments and press offices etc. In other words, it's public services behaving like the private sector – just as it was ordered to do.

One could also add the issue of the BBC being told pretty much the same – to appeal to the largest number (the market). In other words, to dumb down.

I think it was Labour who used to chuck money at civil servants. That's not what it's about. What it's about is acting rationally, negotiating sensible contracts, etc rather than throwing money, wastefully at things. The problem in the large parts of the public sector is that too much money goes to the benefit of its employees rather than the reasons why those employees are there in the first place.