What not to take from the "Why I left ______" articles

March 14, 2012

Two similar pieces are getting a lot of play this week: James Whittaker’s blog post about why he left Google and Greg Smith’s op-ed about why he left Goldman Sachs. Both talk of their high level of company loyalty and enthusiasm in the past. Both bemoan the changes in their respective corporate cultures that led them to leave. Neither seems all that hopeful about his company’s future.

What neither of them does, however, is demonstrate that the problem is that Google/Goldman Sachs used to care about more than just making money but doesn’t anymore. That’s important to note, because for those of us who don’t have a direct connection to the tech or finance industry, it’s tempting to generalize the main takeaway here as “When did the American corporation lose its soul?”

But while you may have heard that corporations are people, they’ve never had souls. They’re governed by rules and structures, not by anyone’s conscience or deeper convictions. In the case of for-profit corporations, those rules and structures are aimed at making money. It’s not one goal they weigh against others; it’s what they exist to do.

Whittaker doesn’t try to argue otherwise about Google, all tech-startup mythology aside. His complaint is about emphasis within the corporate culture:

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.... Our advertising revenue gave us the headroom to think, innovate and create.... The fact that all this was paid for by a cash machine stuffed full of advertising loot was lost on most of us.

For those of us who weren’t working there, it’s not immediately clear why it matters what the place felt like or whether its employees thought a lot about its business model. As for Smith, he makes a stronger claim:

It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization.

Yes, that does sound surprising. Not the claim that the culture has changed for the worse, the suggestion that the previous culture was somehow about something other than making money. Teamwork, integrity, and doing right by your clients don’t sound like a “secret sauce” that magically sustains a place; they sound like a particular strategy for making money. Which is what sustains a place, if that place is a corporation.

This all may sound like so much semantic nit-picking, and clearly Whittaker and Smith do have real points to make to those who, for whatever reason, have a special interest in these companies. But my concern is for the rest of us: stories like this are easy to place within a larger narrative of general moral decline. American companies used to care about integrity and creativity and innovation and ethics! Now they just care about money. But this narrative says more about our ambivalence about our corporate-dominated culture than it does about corporations themselves.

For the general public, the takeaway from stories like these isn’t that corporations need to care about more than profit. Their job is to make money. Ours is to consider the good and bad that comes from this inevitable profit motive--and to exercise our power as consumers, investors and citizens to push for more of the good and less of the bad.


Their morality, our regulations

I don't think I completely agree.

I believe you are suggesting that the financial industry needs regulation -- fair enough. Even churches do, because human beings will inevitably use power irresponsiby.

But I believe a high view of the "vocation" of business or finance-- is possible, and it requires that a practicioner not be morally neutral. Sharon Parks, former chaplain at Harvard Business School used to remind students, comparing the calling of those in different professional schools, that the business of law is justice, and the business of medicine is healing -- but the business of business is commerce. The movement of goods, services, and capital for a larger good. There is no reason that business people should consider themselves morally neutral. "Making money" cannot be their only aim, while off-loading all questions of morality to their regulators.

Yes, regulation; also

Yes, regulation; also consumer and shareholder activism.

I certainly agree that business can be done with attention to ethical considerations. My interest here is more narrowly with the driving purpose behind for-profit corporations in particular. They're designed to prioritize self-preservation and profit; while other goals may exist, they're not going to trump these ones, regardless of the ethics of any of the individual (actually human) players.

I think what Smith is after is in part the difference between slow, conservative pursuit of long-term profit on the one hand and frantic, risky pursuit of short-term profit on the other. That's a real difference, but it's not the difference between pursuing profit and pursuing some other (again, primary) thing.