Here’s some very expensive proof that “soft” issues like employee morale can have a very hard impact on your company’s bottom line.
Check out the lessons for every company in last week’s Goldman Sachs fiasco, known as “Muppetgate.”
You’ve probably heard about it; maybe you even read it yourself: Greg Smith, long-time director at Goldman Sachs wrote an impassioned op-ed piece for the New York Times, explaining why he was resigning from the financial institution. The now-former employee attacked the corporate culture, the management team and the treatment of its “customers.”
Sound familiar? No doubt at some point you’ve heard similar grumblings by disenchanted staffers, whether they were accurate or not.
Only Smith chose to vocalize them in a very public forum … with some very big consequences.
The day the article ran, Goldman lost a staggering $2 billion in market value. And that was just the first day! Because the article cast serious doubt on the way the bank treats its clients, there are likely to be further very costly consequences, impacting even former colleagues’ bonuses.
And while it’s unlikely any of your people are going to air their grievances with your company to a major media outlet, you could still take an expensive hit from a morale problem.
Keep it from happening to you
To keep little issues from getting out of hand fast:
- Keep your ear to the ground. What some managers dismiss as little grumblings could blow up into something bigger. You and your other finance managers want to stay attuned to what’s being said in the hallways, the break room, etc. Watch in particular for repeat rumblings, which could indicate a wider-spread issue.
- Have a few inside sources. You also want to have one or two trusted people “on the inside” who will give you the real scoop on what people are thinking. Of course, you need to be extremely careful never to violate that person’s trust; he or she must know you won’t ever ID that person as someone who spoke up. But that trust must go both ways: If you need an opinion on how people are feeling about that new round of promotions, you have to know you’re getting an honest answer.
- Open your door even wider. Better than having to hear about a concern secondhand? Having someone approach you directly with it. Now’s a great time to reemphasize with your staffers that you welcome any issues they want to bring to you … and that you’d prefer to hear from them sooner rather than later (or before you read it in the New York Times!).