Goldman Sachs–what to do when in a deep hole

June 24, 2010

Thought it might be interesting to comment on the efforts of Goldman Sachs to dig out of their deep hole, while about to visit the command center for the spill in New Orleans.

Daily Dog says that Goldman is about to start a PR campaign and maybe even go on Oprah to help communicate what banks do.

One thing for certain, when you are in a deep hole you can be assured that every tiny effort to improve your status will be observed, reported, and attacked. Usually with exceptional venom. I’ve seen Daily Dog do that with regard to BP and the spill but they are not alone. Not sure why some PR publications seem to want to outdo the outrage. By the time such reporting hits the blogs and social media, the effort has been so twisted and trashed that it is hardly recognizable. Just a warning to you, Goldman.

On a tv program I was on with Peter Firestein, a crisis communication consultant with a book with the best title around: Crisis of Character, he said BP should just be quiet. I disagreed but have thought about it alot. Everything that is said is attacked, discredited, and in most cases, turned against them. Same may be true (to a lesser degree I would suggest) of Goldman. Should they just be quiet?

A few key principles I believe in and have promoted in my book and presentations:

1) Credibility is everything. You cannot exist in the public arena, in the marketplace, in the stock market, without it. But what if you completely and unutterably lose it? You must borrow it from those who have it. That is what I have suggested before. Goldman needs friends now, and it is not the only one. Friends trusted by many of its worst critics. Hard to do? Maybe, particularly as deep as some of these holes are, but absolutely necessary. Credibility must be restored and it is likely that few within Goldman will have the credibility needed to do the job, or can earn it by a PR campaign or a trip to the holy shrine of Oprah.

2) Don’t let lies stand. In the current situation I am observing and somewhat involved, I have seen countless lies propagated, many by the most mainstream of the mainstream. I call them lies but sometimes it is sloppy or ignorant reporting, sometimes especially vicious twists on the truth, sometimes repeats with added flavor of misinformation reported elsewhere. Many times the lies are not untrue, they just are presented in a way that does not represent reality. But I see little effort on Goldman’s part to counter what they may consider lies. A lie repeated often enough becomes the truth. They cannot be allowed to stand unchallenged. But, if you are the one without credibility or with it seriously damaged as in Goldman’s case, you are probably not the best one to challenge the lies. Someone, or some organization, with credibility must be found.

Short of those kinds of game changing, aggressive actions, perhaps it is best to just be silent.

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