Will Goldman's new PR boss cross the line?

Talk about baptisms of fire! Jake Siewert, Goldman's new global head of corporate communications, was on the job 48 hours when Greg Smith's op-ed heard 'round the world ran in The New York Times.

Talk about baptisms of fire! Jake Siewert, Goldman's new global head of corporate communications, was on the job 48 hours when Greg Smith's “I'm outta here” op-ed heard ‘round the world ran in The New York Times. Smith claimed Goldman's declining corporate culture made him jump from his dream job.

The PR industry's parade of practitioners offering Siewert advice on handling Smith's bridge-burning resignation has slowed. Now a more urgent issue emerges: Will Goldman's new PR guy stand by his title and stick to sculpting what Goldman says, or will he cross the great PR divide and tell the reputation-ravaged bank what to do?

This question goes beyond Goldman Sachs. Corporate cultures at BP, Johnson & Johnson, and Toyota overwhelmed executives managing these mighty reputations. They, too, descended into crisis during the past two years. Did these executives propose culture and operating changes to restore trust?

I know what you're saying: “That's what we do here. Our input is far more than handling spin.” But after a career in PR, I know few PR people who influence culture, so let's not make the exception the rule. I'm not suggesting that communications isn't critical to outcomes in a crisis. But many of us want to do and can do more to help our companies and clients protect reputation.

If you're wondering how many PR people are qualified to tell CEOs how to behave, ask yourself who else should do it. Lawyers, management consultants, ethics officers? How many understand public sentiment and psychology the way you do? Or accurately anticipate how media, employees, and shareholders will respond to each option?

When something goes wrong with culture, the risks to reputation grow. PR people often see these risks before they ripen. Those who remain in a communications role serve an important function. Their work will always be valuable. But those who aspire to formal reputation management must transition from words to advice. As all heads of corporate communications know, they're responsible for their company's reputation, whether they shape it or not. Bearing that responsibility without the authority to change reputation is a career Catch 22. A safer route is becoming a chief reputation officer, who can change what he or she is accountable for.

Chief reputation officers are responsible for communications. They're also charged with monitoring corporate policy and behavior for signs of reputation risk. When it's detected, the CRO advises how to lower those risks. Then management decides if the risks are worth it.

Crises at Toyota, BP, and J&J weren't stopped in their early stages. They may not even have been identified. Once beyond control, each brought broad management and culture change. So far, Goldman's response appears to be mostly communications. Lucas van Praag, Siewert's predecessor, may well have tried to cross the line and bring change, only to run afoul of Goldman's ethos. Now it's Siewert's turn.

It appears Goldman's new top PR executive could easily handle a policy role. Siewert was VP of business development and managed global mergers at Alcoa before working for Treasury Secretary Timothy Geithner. Previously, he took the heat as press secretary for President Bill Clinton during the Monica Lewinsky kerfuffle. 

Siewert and PR executives at other crisis companies have an opportunity to evolve our profession. It would be surprising if the battle-tested PR veteran didn't make behavior modification a prerequisite for accepting the job. Unfortunately, he's going to lose a valuable resource. Goldman director H. Lee Scott Jr. said on March 17 that he will not run for reelection in 2012 after one year of service. Scott was Wal-Mart's CEO when the retail giant surprisingly transformed its culture to avoid an imminent crisis over HR policies. He reportedly traded in his BMW for a Volkswagen Beetle to be a parking lot role model.

Goldman's reputation is now under Siewert's watch. If he becomes Goldman's CRO and communicators at other companies follow, Greg Smith will have brought more value to PR than to The New York Times.

Alan Towers is president of TowersGroup, a reputation-management firm in North Salem, NY.

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