Greg Smith’s public departure from Goldman Sachs after a dozen years is one of the hottest pages of the New York Times today and while I tend to ignore the personnel matters of Wall Street (oh, another tycoon getting/losing/complaining about a bonus that’s more than the value of my house), reading his statement startled me.  So many of his concerns about the organization’s culture are shared by me and many of my colleagues in the museum and historic preservation fields:

1.  The overriding pursuit of money that’s out of balance with mission or ethics.  Smith describes a staff meeting at Goldman Sachs:

Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.

Gosh, if this bothers someone at a financial investment firm, shouldn’t the lack of discussion about fulfilling mission and vision really bother the board and staff at a non-profit organization?  And yet most meetings seem to focus on revenue and attendance and hiring decisions emphasize business skills and fundraising.  Should we invoke a moment of silence for the mission statement at every meeting to encourage some reflection about our purpose?

2.  Lack of respect for others (including customers, visitors, members, donors, employees, colleagues, partners, and contractors).  Smith mentions that, “over the last 12 months I have seen five different managing directors refer to their own clients as ‘muppets,’ sometimes over internal e-mail” and this has detrimental long-term affects on staff and the organization’s culture: “You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen.”  I’ve often heard staff complain about the public but usually it’s in jest and short-lived.  Of course, there are some visitors, researchers, trustees, and donors who are clearly unreasonable and overstep their bounds.  But sometimes the organization takes visible steps to permanently distance itself from its members, visitors, trustees, and employees.  If you’re not sure, look for signs like:

• The organization becomes more hierarchical and adds organizational layers, status is based on office location or decor, people are expected to be addressed formally, there’s an emphasis on rituals, and top management waits to be told what to do rather than take a risk by suggesting what to do.  When this becomes extreme, the torches and pitchforks come out as staff attack each other to survive.
• The organization intentionally weakens or eliminates connections to “outsiders,” becoming more opaque and less responsive.  Decision-making is done by a small group of insiders; external communications are carefully reviewed and managed; and contributions from others are discouraged, excessively controlled, or eliminated.  Lots of closed-door meetings and it’s difficult to get the attention of anyone on the inside.  Offering alternative perspectives is ignored and questioning decisions is not tolerated.  Of course some people can be overly demanding and intrusive, but often those people are the most passionate about the mission and the organization.  Turning them aside will turn those allies into lifelong enemies.
• Managers and supervisors complain about a lack of respect from their staff and  expect it to be instantaneous and one-way.   Authentic respect is developed mutually and gradually.

3. Hiring people who aren’t passionate about the mission.  Smith’s closing statement is:

Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.

Perhaps Wall Street lacks a moral compass as it navigates the rocky waters of finance to make money, but non-profit organizations are founded upon a mission that should guide and restrain its work.  And yet this economic downturn has pushed non-profit boards to hire MBAs to solve their problems with a business mentality with dire results (it’s the 1980s all over again).  Although most businesses fail within ten years–that’s not a model I want to follow–museums and historic sites are increasingly replacing programs that primarily have external social or educational benefits with ones that have internal financial benefits, and there’s little interest in following professional practices, ethics, or standards if it gets in the way of making a buck.  There’s nothing wrong with earning revenue and ending the year with a surplus; it just needs to be in a proper balance and that can only be accomplished when most of the organization’s leaders understand, support, and are passionate about the mission.  This passion needs to be demonstrated over a sustained period.  Stop hiring executives and electing trustees because he or she is a longtime member, that they love visiting museums, or that they live in an historic house and collect antiques.  Let’s get serious about fulfilling your mission.  Hire people who show their passion by obtaining an advanced degree in a field that’s related to your mission; have publicly and personally advocated for your mission in their community; make a contribution to the field by writing articles, speaking at conferences, or serving on boards; or have taken a personal risk to advance the mission.  Does the Attorney General need to step in and revoke the non-profit status of a couple major non-profit organizations to remind everyone of their purpose?

The toughest part for Greg Smith is not that he’s giving up a lucrative job at Goldman Sachs because the organization’s practices don’t align with his personal ethics and mission, but that he did it so publicly to bring national attention to this serious problem.  You might think that might be easy to do considering all the money he’s made, but I suspect he’s got a lot of productive years ahead of him.  His public departure will no doubt prompt an excommunication by the wizards of Wall Street, so who knows what’s next for him.  He’s doing the right thing despite the personal cost and I applaud his courageousness and authenticity.  I’m not sure many of us in the non-profit world would be this bold, but if you find all three situations happening at your organization, it’s time to abandon ship (you’re on the Titanic).  Writing a letter to the editor about it may require a bit more consideration.

If you want to explore these ideas further, you’ll enjoy Jim Collins’ booklet Good to Great for the Social Sectors and Ichak Adizes’ book Corporate Lifecycles or his blog post on the decline of capitalism (yeah, the title is strange but scroll down to the middle for the interview with George Soros and business schools).