What Greg Smith and Goldman Sachs Tell Us About Investigations
Former Goldman Sachs employee Greg Smith caused quite a stir when he took to the New York Times op-ed page to explain why he was leaving Goldman Sachs after 12 years. Smith, who the Times identified as a London-based executive director for Goldman heading the firm’s United States equity derivatives business in Europe, the Middle East and Africa, described a company where senior employees disparage clients as “muppets” and where workers push deals irrespective of their clients’ needs or wishes. It was this wanton disregard and disrespect for clients that finally led him to leave Goldman, he wrote, inspiring his explosive good-bye letter. (By noon on the day the op-ed was published, Goldman Sach’s stock had fallen over 3%. Financial shares on the S&P 500 fell over half a percent).
Smith reminds us that if you want to really know how a company or an organization functions from the inside, it’s worth taking the time to track down and carefully interview former employees. Sure, a current insider would be preferable, but with any mole, the odds of convincing them to tell you all they know are slim. After all, they still work there, and they have to make sure to protect their identity while guarding their interests. Former employees have fewer such fears. Like Smith, former employees can be outspoken because they are no longer beholden to the organization, or because they no longer fear being fired for their candor.
And senior-level former employees are not the only ones worth tracking down. The day the op-ed was published, some in the business press alleged that Smith was just a disgruntled low-level employee, resentful perhaps about how little he’d moved up during his tenure at Goldman, here and here.
Certainly it’s always important to assess whether an employee has genuine information or just an axe to grind, but just because an employee is low on the totem pole doesn't mean that their insight into the company is any less valuable.
Lower-level employees may still know the key players in an organization and how decisions are made. They also have personal insight on a company’s corporate culture and how former co-workers were perceived. And while they may not have been leading the meetings or writing the emails that conveyed sensitive information, they may still have been in attendance, or received copies of those messages.
An employee's low stature in the company food chain is not a reason to discredit what they say altogether—it is just something to factor in when weighing how much credence to give the information or opinion they offer.