Harvard MBAs On The Goldman Uproar

Last week, Greg Smith resigned as head of the Goldman Sachs U.S. derivatives business in Europe, the Middle East, and Africa, and wrote an op-ed in the New York Times describing the Goldman Sachs environment as “toxic and destructive”.

The Harbus asked every HBS student who had prior work experience at Goldman Sachs to volunteer their feedback regarding Smith’s op-ed. Below is every single unedited response in the order they were received by us. These are the opinions of individual HBS students who worked at Goldman Sachs, and should not be assumed as representative of views of The Harbus or the student body as a whole.


Having worked for GS for several years, I thought Greg’s comments were spot on. Although “muppets” was not the term I’ve ever heard, it was clear from day 1 that the way we structured deals was designed to make the most money for the firm, not to promote the interest of the client. In fact, I can’t think of a single time or an internal meeting when anyone present referred to doing what’s best for the client. If anyone were to do that, he or she would without doubt come across as hopelessly naïve.”
“This was one of the reasons I chose to leave GS and the industry in general.”


“Firstly, whilst it is healthy to express discontent, he is doing so in a childish and unproductive way. The downside is to hurt the firm’s reputation without fixing any problems. He should have been expressing his frustration over the last 10 years and speak accordingly to senior leadership. The fact he was promoted means he likely kept quiet to stay on the promotion track, and is now leaving us with words of wisdoms whilst he has 12 years of bonuses under his belt.
“Secondly, I agree that there is a two-tiered culture in Goldman Sachs. Most of HBS students will come from the Investment banking division where culture matters much more. I have sat on meetings where MDs were berated by partners for being too aggressive in valuations, leverage proposals or synergies on certain deals. There is also a strong understanding that pitch books may have some questionable estimates, but executed deals are 100% by the book. I cannot speak for the trading culture, but from hearsay I understand it to be much more aggressive and arrogant.”


“My summer-associate internship in banking at Goldman was my first time working in finance, so I am not sure how much of what I saw and experienced was particular to my group, to the firm, or is generalizable to Wall Street at large. Notwithstanding that disclaimer, I share this: I worked with some exceptionally smart and talented people, a few of whom went to great lengths to make me feel welcome, to lend me a hand when I needed one, and to offer a peek at what it would be like to build a career at the firm. These colleagues were true professionals, and would be the first on my list if I were ever in need of investment-banking services. Greg Smith’s op-ed fails to properly acknowledge the existence of these good apples, whom I suspect can be found at most every level and in most every corner of the firm.

“But important parts of Smith’s op-ed ring true – there are plenty of bad apples. It seemed to me that many of my colleagues had difficulty placing themselves in the shoes of our clients — or worse, didn’t even try to — and it was not at all clear to me that they were “long-term greedy,” a description for which Goldman is famous. In one particularly memorable case, a full-time associate and I were implicitly encouraged by an MD to ensure that our quantitative analysis found a particular financial product to be the most beneficial to our client — regardless of the actual benefit, it was the product that would generate the most revenue for our group. This exercise involved at least a half-dozen assumptions, so our analysis was defensible, but I believe our client was savvy enough to suspect our biases, and it must have eroded his opinion of our work and character, at least incrementally. Experiences like this contributed to my decision to turn down a full-time offer to return.”


“This is the view of one guy, working in one division, covering one type of product, speaking to one client type in one of Goldman’s 46 or so offices around the world. I am pretty sure most people are aware that Goldman is much more than this one division, one product and one client type, so to take this view and apply it over every business line that Goldman has should raise some eyebrows. I think some people get carried away into thinking that investment banks should be some sort of social enterprises. Inherently, they are not. Surely by virtue of the fact that what keeps them going is the existence of capital markets should scream out capitalism (sorry for the pun). And so, just as any consumer goods firm seeks out the next big opportunity, be it in packaging, product type or client base, so do employees of Goldman seek out big opportunities or so called elephant trades. It is not uncommon for a retail company to provide discounts and other incentives when a new product is introduced or when it needs to get previous season’s items off its inventory. Getting rid of these ‘axes’ allow for these companies to create and introduce new products to help maintain their competitive advantage. Sure, a financial product is not a tangible physical asset, however, this process does not differ much to what other industries do. Do you not think that a firm in the services industry does not know that it is only worth its clients’ patronage and ultimately trust? Goldman has no physical product that can be seen and felt to see its benefits. All they have, and hopefully, even the least smartest of them all can recognize this, is their relationships, reputation and maybe smarts. With these three being the driver of their long-term value, how could this not be at the top of their minds when thinking about their business? It really is absurd to think it would be otherwise.”


“I think it’s a shame that Mr. Smith feels this way, but the real tragedy is his failure to take any action besides leaving the firm. From the board level down to the financial analyst, Goldman has a deep culture of risk management. I experienced it from my first day as a summer intern to my last day as an analyst. And among the chief risks the firm looks to mitigate is the risk that its employees behave in exactly the way Mr. Smith describes—without putting its client’s interests first. Goldman understands that its success rests squarely upon its reputation and therefore rewards its employees for speaking up and dissenting whenever they feel that a client’s interest is not being considered. Whether Mr. Smith’s experiences are true or not, it was his obligation to escalate the issue—as far up as it needed to go—instead of standing by idly, ruminating over the situation.

“I’m not at all surprised by this. GS is the best bank because it knows how to make more money off its clients than the other banks. The financial services industry relies on client fees, so I don’t see a problem with clients paying you for your work.”


“The op-ed was an accurate reflection of the GS culture. Goldman routinely rewards employees who make the most money for the firm, whether or not they are complete jerks. It’s not uncommon for traders and salespeople to mock their clients’ incompetency and share a joke with each other on the floor.”

This story is reprinted with permission from The Harbus, the MBA student newspaper of the Harvard Business School. 


  • Said Mohammad

    The claim that Smith should have stayed or had the duty of staying and somehow changing the multi-national corporate behemoth from within is laughable. A Martin Luther nailing a note to the door of Goldman comes to mind, pretty sure it will be laughed at as well. 

  • Emory Strother

    In my opinion, suggesting that Mr. Smith try to go through internal channels to address the culture problem at Goldman seems to assume an unrealistic interpretation of his mindset and/or the dynamics of a culture that has slipped into a habit of “short-term greed.” If he feels so strongly about the momentum of the culture, it’s hard to imagine that he simultaneously has faith that anyone would be willing to listen to his critique and take it seriously. Moreover, I think you have to assume his perception (rightly or wrongly) is that Goldman’s cultural deterioration was not a failure of awareness, but a failure of priority. Similarly, if Goldman (or at least the parts of Goldman’s operations that he had knowledge of) were acting in the way he describes, I can’t imagine that they would actually be willing to hear his types of critiques from someone outside of the highest ranks (and even that is stretch in my opinion) or without some brilliantly constructed campaign for change. Moreover, change is hard enough to engender when it’s potentially profitable in the immediate and reinforces people’s self-image, it’s exceedingly difficult when you are advocating taking money away and implicitly condemning years of profitability—that I am sure many took some level of pride in.

    If the culture has gone where Mr. Smith says it has the shortest path to change for Goldman and for the industry is for others to follow in the footsteps of Mr. Smith. Of course, it is not appropriate to air every disagreement you have with an employer, boss, industry, etc, but this was not a momentary and isolated frustration. Goldman is an icon of an industry that has created tremendous wealth and accumulated tremendous influence, but that is now showing signs of the significant abuse of that wealth and power. Mr. Smith, by accident or design acted in recognition that this is not about the relationship Mr. Smith had with Goldman, but about the relationship Goldman has with society–and therefore appropriately not just a private matter.  Would it have been better for Mr. Smith to first attempt to raise the issue internally, probably; but, ultimately I believe this was not a time to stand around slaying windmills.

  • Arjen Robben

    I love how people are saying that it was a cheap way of expressing his dissatisfaction. Let just say he brought this up to his M.D. when he was VP, what would have happened? Probably he would have been canned. If he brought it up as an M.D, an E.D to higher people, still he could have been asked to leave, given less responsibilities etc. 

    If he had done it any other way, Goldman would have never took it seriously, and we wouldn’t have taken it seriously either.