As the SEC pursues its case against Goldman Sachs over the possible defrauding of investors during the subprime mortgage crisis, journalists and pundits are closely watching and gauging the financial services company's controversial public relations style and efforts.
Though the firm is utilizing crisis communications tactics in response to the regulatory agency's claims, it still faces a strong undercurrent of frustration and distrust in much of the media coverage about Goldman. This, bolstered by overt criticism of the company's off-putting remarks to reporters, has developed into a legitimate threat to the firm itself. That is not to say Goldman is failing to effectively execute all of the traditional plays in the crisis management handbook. But this approach appears to focus directly on the threats to the firm rather than fitting within a holistic strategy to repair its damaged brand.
Much like the transformation of the company's brand during the recession, Goldman Sachs requires a fundamental shift, not just in strategy but in its entire approach to interacting with the media.
Even if the firm were to create innovative programs to, for example, provide discounted advisory support to financially weakened municipalities across the US, journalists are not currently prepared to appreciate the genuine value of such a campaign aimed at repairing the muni bond market that finances America's local governments.
As recently as yesterday (April 21), reporters such as Daniel Gross of Newsweek and Slate continued to lament Goldman's approach to interacting with the media, exclaiming on Twitter how “Goldman's charm offensive is 1 percent charm 99 percent offensive” - (@grossdm). This implies that change is underway at Goldman, but that its audience is still negatively influenced by the alleged deceit and elitist perception associated with the firm (at least in Gross' case).
The long-term solution to restoring Goldman Sachs' image of market excellence, paired with its track record of performance, hinges on heightened levels of transparency, real, proactive engagement with the media, and a demonstration of the good of its labor to the US public. Only then can the company's public relations representatives begin to remove themselves from coverage about the firm and refocus their efforts on telling Goldman's story.
And, despite the diverse range of challenges tied to this strategy in the short term, reestablishing a true dialogue with the press and public is essential in communicating positive news and information. Until Goldman fully implements this approach in dealing with the media, we'll likely continue to see them as the lightning rod for coverage relating back to the financial crisis.
Scott Tangney is EVP at Makovsky & Company