I, like most of America, could not help but tune in the Goldman Sachs senatorial hearing yesterday. Now, it’s not a regular practice of mine to engage in political discourse, or ethical debate for that matter (I’ll save that for the cable news anchors with great hair), but amidst the rather theatrical spectacle yesterday was a rather imperative social question in my opinion.
When did Integrity become the great adversary of business? I was under the impression that Integrity was the catalyst for good business? I must have missed that memo I guess.
Goldman Sachs is chalk full of smart people, and Llyod Blankfein for that matter, is clearly a bright guy. The mental gymnastics he displayed yesterday, while dodging four letter words from a senate committee hell-bent on laying groundwork for midterm elections, was nothing short of impressive. I’m no econ whiz, and default-credit-swapping-liquid-synthetic-banana investments might as well be pig latin to me. But with that understood, it still seems clear to me that the appropriate reaction here should have been shame, embarrassment, remorse possibly? Did you see that, because I sure didn’t.
What I saw, was not just a watershed moment in the slow decay of business ethics; but more frighteningly, how far the deterioration of the general ethical fabric that once bound us together has unraveled. If a merchant in 1835 sold you 30 lbs of flour, you expected to get 30lbs of flour. Not 22lbs of flower with an option to get the other 8lbs if the price of flour dropped below the original strike price, blah blah blah. 
How we’ve come to this point, I have no idea. Is reform needed? It certainly seems so. Is this the government’s job? Sure, partially. But will that solve this calamity? I think not. It seems glaringly apparent that the solution lies with each one of us. It is you and I, the entrepreneurs, that must restore faith and trust in each other. To renew the fabric of collective progress, to revive that sense of responsibility. It begins with having business interactions, instead of just transactions. Whether it be for $5, $50 or $50 million dollars; when respect given, it is returned.
Let the reformation begin with US.
“When written in Chinese, the word “crisis” is composed of two characters. One represents danger, the other opportunity.”
-John F. Kennedy
All my best,
Jay Kubassek
I think the moment society bought into the idea that we do not need to assume any personal responsibility for our own actions was the beginning of the end.
That goes for Government, banks, business people and consumers alike. To point the finger in any one direction is to perpetuate the pointless cycle of blame and deflection that created this mess.
In Australia, 84% of our population receives Government assistance in one form or another. The insurance industry thrives as there are no “accidents” any more. More people than not will look around in the first instance for someone to blame, followed closely by someone to pay.
Banks lend people money they cannot afford to pay back, and consumers happily step up and continue to borrow. After all, doesn’t every household deserve to have that third Plasma screen TV?
For real change to occur, we must all be ready to step up to our responsibilities and be accountable for everything we think, say and do.
Nothing will change in the world while we believe it is someone else’s duty to take care of us, or that it is our right to live beyond our means.
And while anyone holds onto the belief that they are entitled to milk the journey for whatever they can get, nothing will change.
I am pleased leaders such as yourself are tsking this stance. Interestingly before the econmic crisis I always referred to myself as a social entrepreneur taking Richard Branson as a model.
My definition of social entrepreneur is to leave the world a better place through your business activities. That’s what the US railroad pioneers and other industrial greats did. The rot set in the 80’s when Margaret Thatcher in the UK said, “There is no such thing as society”, the begining of ‘individualism’ or ‘I’m OK Jack and I don’t care about you’.
A very good and brave post, showing true leadership to our community.
It’s not only the US that is watching as the Goldman-Sachs case develops. To quote Matt Taibbi from the The Guardian (UK), published also in Australian papers several days ago:
“Much of America is going to reflexively insist that Goldman’s only crime was being better at making money than IKB and ABN-Amro, and that the meddling government… should get off Goldman’s Armani-clad back. Another side is going to argue that Goldman winning this case would be a rebuke to the whole idea of civilisation – which, after all, is really just a collective decision by all of us not to screw each other over even when we can.
It’s an important moment in the history of modern global capitalism: whether or not to move forward into a world of greed without limits.”
You have put it so well in your letter Jay, it is up to us both as a community of entrepreneurs and as individuals to resist this decay.
adly, that kind of business behavior seems to be everywhere these days. For example, everything you purchase is getting smaller, yet costs the same, or even more – no doubt the result of business schools around the world emphasizing profit over all else. “If you reduce the amount of beans in this can and add more water, it will weigh the same and costs us less!” – or – “If you put 21 M&M’s in this packet instead of 23, it will save the company $5 million over the next year!” If only colleges would emphasize their “Business Ethics” classes more, but unfortunately, that seems to be less and less important.
But, you are right! The quote by JFK is perfect. As unemployment escalates, so do new business opportunities. And these new entrepreneurs can set new standards for good business practices, just like our entrepreneurial ancestors did. That’s how they all started – Mr. Kodak, Mr. Johnson, Mr. Kroger, Mr. Ford, Mr. Macy, and on and on. These companies would not be where they are today without showing respect to their customers over 100 years ago. It just goes to show, you can never fail by doing the right thing.
adly, that kind of business behavior seems to be everywhere these days. For example, everything you purchase is getting smaller, yet costs the same, or even more – no doubt the result of business schools around the world emphasizing profit over all else. “If you reduce the amount of beans in this can and add more water, it will weigh the same and costs us less!” – or – “If you put 21 M&M’s in this packet instead of 23, it will save the company $5 million over the next year!” If only colleges would emphasize their “Business Ethics” classes more, but unfortunately, that seems to be less and less important.
But, you are right! The quote by JFK is perfect. As unemployment escalates, so do new business opportunities. And these new entrepreneurs can set new standards for good business practices, just like our entrepreneurial ancestors did. That’s how they all started – Mr. Kodak, Mr. Johnson, Mr. Kroger, Mr. Ford, Mr. Macy, and on and on. These companies would not be where they are today without showing respect to their customers over 100 years ago. It just goes to show, you can never fail by doing the right thing.
I am pleased leaders such as yourself are tsking this stance. Interestingly before the econmic crisis I always referred to myself as a social entrepreneur taking Richard Branson as a model.
My definition of social entrepreneur is to leave the world a better place through your business activities. That’s what the US railroad pioneers and other industrial greats did. The rot set in the 80’s when Margaret Thatcher in the UK said, “There is no such thing as society”, the begining of ‘individualism’ or ‘I’m OK Jack and I don’t care about you’.
A very good and brave post, showing true leadership to our community.