Each week, there are a number of minor crises that create a stressful week for one unlucky PR department, but fail to gain traction with the general public or investors.
Take, for example, McDonald’s two hashtag debacles
. Great fodder for the media and the Twitterati, but ultimately a non-starter when it comes to selling Big Macs.
For Goldman Sachs, a PR disaster this week has real consequences—to the tune of $2.15 billion. That’s the amount of market value “wiped out” from Goldman when shares dropped 3.4 percent on Standard & Poor’s index on Wednesday after Greg Smith’s farewell to the company in The New York Times
According to Bloomberg
, the drop marked “the third-biggest decline in the 81-company Standard & Poor’s 500 Financials Index.”
Smith, a former executive in the firm’s London office, wrote a scathing resignation letter
, in which he decried Goldman’s treatment of its clients. The letter, which was published in the Times on Wednesday, became a popular topic in the media and on social media sites, and inspired a host of parodies (including the most popular, “Why I’m Leaving The Empire, By Darth Vader
In a statement, Goldman said it disagreed with Smith’s remarks. And, in an internal memo to employees, CEO Lloyd Blankfein expressed his “disappointment.”
According to the memo:
“In a company of our size, it is not shocking that some people could feel disgruntled. But that does not and should not represent our firm of more than 30,000 people. Everyone is entitled to his or her opinion. But, it is unfortunate that an individual opinion about Goldman Sachs is amplified in a newspaper and speaks louder than the regular, detailed and intensive feedback you have provided the firm and independent, public surveys of workplace environments.”
In comments to a PR Daily
story about the letter (“5 crisis PR lessons from the Goldman Sachs resignation
”), readers stressed the importance of internal communications.
“Strong internal communications and employee engagement is vital here,” said one reader. “For a firm this powerful, an inside-out rebranding approach might work more effectively than an outside-in approach.”
Another reader said this story is about public relations at all:
“The whole point about the resignation letter is that what Greg Smith said is true. This isn't a PR problem; this is a business problem. One of the first rules in PR is to always tell the truth, so the suggestion that there are PR responses to this sort of business issue borders on the unethical and, second, misses the point of what PR is all about. It isn't about smoothing over rough edges with lies or obfuscation. When the story is bad, it's bad, and no amount of weaseling will change that.”
Either way, members of the Goldman PR department are no doubt looking forward to the weekend—if they get to take one.