Scathing resignation letters are all the rage these days
It seems that there’s a new trend among highly-paid corporate executives these days: First, quit your job then write a scathing opinion piece on how horrible and greed-consumed your former employer has become. We’ve seen two high-profile examples of this trend manifiest in the past week, one from former Google exec James Whittaker and another from Greg Smith, a former executive director at investment banking titan Goldman Sachs. Since this blog concerns itself primarily with Google we’ll take a look at Whittaker’s piece, which he posted over at his new Microsoft blog, first:
It wasn’t an easy decision to leave Google. During my time there I became fairly passionate about the company. I keynoted four Google Developer Day events, two Google Test Automation Conferences and was a prolific contributor to the Google testing blog. Recruiters often asked me to help sell high priority candidates on the company. No one had to ask me twice to promote Google and no one was more surprised than me when I could no longer do so. In fact, my last three months working for Google was a whirlwind of desperation, trying in vain to get my passion back.
The Google I was passionate about was a technology company that empowered its employees to innovate. The Google I left was an advertising company with a single corporate-mandated focus.
Technically I suppose Google has always been an advertising company, but for the better part of the last three years, it didn’t feel like one. Google was an ad company only in the sense that a good TV show is an ad company: having great content attracts advertisers. […]
But that was then, as the saying goes, and this is now.
It turns out that there was one place where the Google innovation machine faltered and that one place mattered a lot: competing with Facebook. […]
Suddenly, 20% meant half-assed. Google Labs was shut down. App Engine fees were raised. APIs that had been free for years were deprecated or provided for a fee. As the trappings of entrepreneurship were dismantled, derisive talk of the “old Google” and its feeble attempts at competing with Facebook surfaced to justify a “new Google” that promised “more wood behind fewer arrows.”
Larry Page himself assumed command to right this wrong. Social became state-owned, a corporate mandate called Google+. It was an ominous name invoking the feeling that Google alone wasn’t enough. Search had to be social. Android had to be social. You Tube, once joyous in their independence, had to be … well, you get the point. Even worse was that innovation had to be social. Ideas that failed to put Google+ at the center of the universe were a distraction.
My take on this: While there’s definitely something to this, I think it overstates how far Google has “fallen.” Look, I’m not a big Google+ fan either and I think the company’s attempts to push it into the center of all its services has been a strategic mistake (as well as really annoying from an end user’s perspective). But Google is still the most widely-used search engine by a country mile, Android is still the most popular mobile operating system on the planet and Chrome is still a killer web browser. Oh, and have I mentioned that Google Music has supplanted iTunes as my music player of choice?
So while Google’s heavy push into social networking sites may backfire (and personally I hope it does), the company is still doing a lot of really solid innovation and is (I hope!) smart enough to learn from its mistakes.
Now, let’s move onto Greg Smith’s resignation letter from Goldman. You’ll notice some of the same themes at work here: The company used to be about innovation/serving financial clients, it used to be focused more on delivering quality services instead of making many any which way and it used be a place where you could be proud to work. Let’s take a look:
Today is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it. […]
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. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym. […]
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. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.
I’m not buying this letter nearly as much as the Google letter. Not because I don’t believe Goldman thinks of its clients as “Muppets” who are there to be ruthlessly shaken down for just about every dollar but because I believe Goldman has always pretty much operated this way. If you read Michael Lewis’ classic Liar’s Poker, you’ll see that Goldman’s reputation on the Street back in the ’80s was that it came up with the most clever and innovative ways to “rip the client’s face off,” even more clever than Lewis’s firm Salomon Brothers. As prominent finance blogger Josh Brown put it today:
The “culture” of Goldman Sachs was, is and always will be about making money, often at the expense of a client. Do you even know where the term “wirehouse” originally came from? Let me help you out with that. In the 1920’s, there was no CNBC or internet – there was only news delivered by wire and cable, stock market news and prices included. The “wirehouse” firms like Goldman would transmit stock and bond prices to their far-flung offices around the country from Wall Street where the action was taking place. it is a peculiar and yet telling fact of history that during the Crash of 1929, not a single major Wall Street brokerage firm went under. Wanna know why? Because when the sell-off began, they dumped all their holdings prior to wiring the news out to the rest of the investing public and their clientele across the country. Sound familiar, [expletive]? THAT is your firm’s culture, going back a hundred and fifty years.
At any rate, it is amusing to see corporate bigwigs acting like hipsters writing articles to their favorite bands scolding them for selling out and going mainstream. I guess the different is that Google is perceived more as Radiohead while Goldman is more like Justin Bieber — you shouldn’t be disappointed in Bieber because he’s never really pretended to be anything but the recording industry’s personal vampire squid.
