More than a month ago Greg Smith slammed Goldman Sachs in his high-profile public resignation letter. Since then its been continual crisis management for the investment firm. The job of their crisis PR team wont be getting easier anytime soon – In the newest scandal to hit Goldman Sachs, Prosecutors have started a new insider trading probe against a current employee of the firm. Combine that with the upcoming insider trading set to start May 21 for former Goldman Sachs Group director Rajat Gupta and it ain’t looking too pretty.
The Goldman Sachs brand is continually being chipped away at and it is very harmful to “Brand Goldman Sachs.” Liken it to a boxer who is continually taking body blows in the midst of a fight – how many bodyblows can Goldman Sachs stand before it does real damage ? Publics need to know that Goldman Sachs is secure – and that these negatives are isolated, and these continued negative occurrences damage the Goldman Sachs institution.
Google Goldman Sachs – On page 1 & 2, 30% of the entrees are negative. A very negative reflection of one of the world’s largest financial institution – and proof that Goldman better immediately get to work on managing their online reputation. Goldman Sachs has to realize there are two courts involved when it comes to crisis PR: the court of law and the court of public opinion (think Casey Anthony, who may have been found “not guilty” in a court of law but is certainly guilty in the court of public opinion). Both courts matter immensely.
Brand Goldman Sachs is being defined by courts and negative op-eds in high-profile papers. Goldman has a real problem – The legal system at odds with the media system; court proceedings are, by design, long, complicated, and tedious. And media goes on and people form opinions from media (which demands immediacy). Customers, employees, and others are following the media and forming opinions.
Goldman Sachs is facing a court of public opinion which is immediate and viral. Reporters, Twitter, Facebook, YouTube, 24/7 cable news, search engine results, etc., aren’t waiting for the next investigation of Goldman Sachs – they are making decisions now. One of the world’s largest financial institutions – so talented and amazing in so many areas needs to handle their public relations with the same efforts as it handles money.
On May 21, 2010 Lloyd Blankfein said in a public address: “We did a good job managing risk; we did a less good job managing our reputation.” Smart people usually learn from their mistakes – clearly that isn’t the case here as the Goldman Sachs brand doesn’t have a communications plan – and needs a crisis PR Agency asap.
Ronn Torossian is CEO of 5WPR, a leading NY PR Agency. He is also author of “For Immediate Release”, a best-selling PR book.
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