Goldman’s Less-than-helpful Apology
In a speech Tuesday night, Goldman Sachs CEO Lloyd Blankfein reportedly apologized for his company’s role in the financial markets crisis, saying, “We participated in things that were clearly wrong and have reason to regret.”
Apologies are always tricky business for people or organizations under siege in the media. Sometimes they can be helpful. When an individual or company is clearly at fault for something, a quick apology, full explanation of what went wrong and why, and commitment to correcting the error can stanch public disapproval.
In other cases, apologies can sound forced and insincere, like the schoolyard bully forced to apologize to his latest victim. These apologies generally reinforce negative ideas about the person or institution issuing the apology. “They just don’t get it,” even if they want us to believe they do.
A third category is the unnecessary apology, or the guilty conscience apology. This is likely where Blankfein’s apology falls. Given the CEO’s full-throated defense of Goldman’s business practices in recent months, the apology Tuesday night is most likely a reaction to the ongoing negative storyline about Goldman.
But the storyline isn’t really about Goldman doing anything wrong; it’s about Goldman being too well-connected and using public largess to amplify its effective business practices. Goldman is too successful at the wrong time. Enormous compensation packages rub salt in the wound.
Blankfein’s apology is essentially an attempt to say, “We feel your pain.” He still believes the company has acted responsibly toward society, shareholders, and employees, but he thinks he’s got to say something to indicate he’s aware of public perception.
The problem with such a statement is that it will gain the company nothing. No one who despises Goldman will believe the apology is sincere. And people who might otherwise have held Goldman blameless for the financial crisis now have evidence that maybe the bank does deserve some blame. If the CEO is apologizing, it must be because the company did something wrong.
Furthermore, the timing of the apology was unfortunate, coming the same day as Goldman’s announcement of its 10,000 Small Businesses initiative, a $500 million effort to provide education, mentoring, and capital to help small businesses grow. The idea was some time in the making and is an effective corporate responsibility program because it’s rooted in Goldman’s business model and genuinely beneficial to society.
But today the media packaged the announcement with Blankfein’s apology and the news theme is that 10,000 Small Businesses is basically an act of penance – and a cheap one at that, representing “less than 3 percent of Goldman’s employee compensation pool,” as ABC news noted.
The tough thing about being Public Enemy #1 on any particular issue is that everything you say will be held against you. That heightens the need for smart communications and delicate timing.