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Some Parting Thoughts on Goldman Sachs

This post really belongs in the comments section of the post I wrote yesterday: On the Morality of Value Creating and Value Claiming (and Goldman Sachs). I would have put these thoughts there, but one long comment demanded more discussion than is fair to provide in the comments. I am going select a few of his points here, but you can read the original comments at the bottom of the post.

Integrity and Goldman As Villain

The commenter writes that Greg Smith’s act of conscience should not be “the basis for selling with integrity.” He also suggests that Sachs is not “the Wicked Witch of the West in Capitalism.” And he is correct. I have no idea other than Smith’s resignation letter whether or not he sold with integrity, so it is unfair to hold him up as a pillar of selling with integrity. Smith’s letter does demonstrate, however, how painful it is for a salesperson to violate his own conscience and to sell without creating value for his client. It does ring as truthful at some level (especially if you have seen salespeople struggle with, and then quit, companies that asked them to do the same, as I have).

More still, while I don’t for a minute believe the Goldman is the Glinda the Good Witch of the South, they are far too deeply entrenched in American politics for that to be otherwise, I am also certain that a wildly successful firm like Goldman doesn’t grow to their size without many good people that do care about their clients. You don’t grow if your clients don’t benefit from doing business with you. It just doesn’t work that way.

A few villains can damage the reputation of the good people that really make up a company. Like many companies that are vilified, Goldman surely has both.

Caveat Emptor, Caveat Venditor

This comment is far more troubling to me:

Caveat Emptor, has always been the basis of Buying, since
the Seller first appeared. Fraud, and Malpractice is governed by Law, not dependent on the individual integrity and honesty of the salesperson.

Without being provocative or argumentative, my only reply is: Bullshit!

“Buyer beware” has never been the basis of buying, especially when selling first appeared. To sell without trust has always ensured that the salesperson would eliminate the possibility of future sales. There couldn’t be a more thoughtless and common-sense violating approach for anyone who needs food, shelter, and clothing for themselves and for their family than to sell under the premise that the buyer should beware. In fact, future sales have always depended on the buyer not having to beware!

The charlatans and snake oil salesmen to whom “buyer beware” applies have always been tremendous transactional marketers that were never really concerned about their client’s outcomes. These people may sell, but they have never been salespeople.

If anything, the Internet has reversed the balance of power here, especially as it pertains to those would cheat others. If anything, Caveat Venditor, or “seller beware” is the basis for buying now. When those you harm are going to immediately and permanently post your name, your company’s name, a picture of your product, and their story for all the world to see (courtesy of Google), the shoe is most definitely on the other foot.

The second part of the commenter’s thoughts on fraud and malpractice being governed by law and not being “dependent on the individual integrity and honesty of the salesperson” are also troubling. Personally, my political philosophy is grounded in the belief that persuasion is preferable to force, but surely laws must exist to prevent, punish, and to compensate the victims of crime. But Smith said:

I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.

There are two problems with the commenter’s thoughts here. First, there were no laws violated. So much for fraud and malpractice. This makes my second point. Selling well depends completely on the salesperson’s honesty and integrity. In fact, when salespeople behave with honesty and integrity, if they act ethically, there is no reason that “law” should ever be mentioned. I don’t believe I know of a single salesperson that would argue to the contrary.

Lesson Four: You can sell unethically without violating any laws. You should never sell unethically, and that includes attempting to capture value without creating any for your clients. A short-term result that destroys your ability to be trusted is not a strategy that any successful person I know would recommend, least of all one who makes their living carrying a bag.

Thoughts in Corporate Governance

The commenter closes by suggesting that we are all to blame:

Good Corporate Governance is in the hands of the
shareholder, where we invest and who we invest with. If the Shareholder cannot see beyond his
return, then we are likely to turn a blind eye, to the very practices which you
decry! It’s not Wall Street, nor is it Selling; it’s all of us!

His point is well taken. Many firms, investment banks included, are slaves to their quarterly numbers. It is very difficult to serve shareholders who demand gains quarter after quarter, year after year, and decade after decade, ad infinitum, without sacrificing the company’s best future to the shareholder’s present. It’s difficult to make the right long term decisions when it means the short term suffers. The pressure to perform trickles down, and surely sales organizations are pressured to put up numbers.

It’s true especially here in the United States where we expect consistent, steady gains. We know only growth and growth, and growth. But for my money, as a shareholder, I would prefer to see quarters with no growth in exchange for the building of a company that serves it’s clients so well that the future returns are all but guaranteed.

I don’t have any answers here, but I know that I have never been jealous of public companies because the commenter’s point is true:  the short term rules.

But I do know about how short term thinking works in sales.

Lesson Five: In sales, there is never any reason to sacrifice your future client relationships and future sales for a short-term gain. The game we play in sales is a long game. It takes time to build a reputation as a value creator, a trusted advisor. It takes a lot of effort and energy, and you have to build a long history of producing results. There isn’t any short-term gain worth sacrificing your reputation.

You are your own primary shareholder. Act accordingly.


Are most companies full of both good and bad people?

How do good people deal with the reputation damage caused by the far smaller number of people that behave badly?

Can you sell unethically without violating any laws? Is it unethical to sell your client something that allows you to claim value but creates none for them?

What are the risks of sacrificing the long term for their short term? What are the risks for salespeople who would do so?

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  • JP Nicols

    I have long subscribed to the formula for Trust as given in the book The Trusted Advisor, by David H. Maister, et al: Credibility (knowing what you’re talking about) + Reliability (doing what you say you will) + Intimacy (know me well) all DIVIDED BY Self Interest.Firms (or individuals) can score 10 out of 10 in the first three, but it matters little if they score high in Self Interest (real or perceived).I once heard a consultant say they could help us reduce A1 risk– the risk that my firm would appear on Section A, Page 1 of the Wall Street Journal.In this interconnected world, it doesn’t take long to get there any more.

    • S. Anthony Iannarino

      It’s the divided by self-interest part that makes it interesting, isn’t it, JP? It’s quite a paradox that the greatest thing that you can do in your own self-interest is to try to create value for others. 

      • JP Nicols

        Enlightened self interest, I believe a wise Frenchman once called it…

      • S. Anthony Iannarino

        Ah! You have revealed yourself as a history buff, JP. I haven’t read de Tocqueville in an age. A wise frenchman indeed. 

  • Rvtl

    Good work.  I personally didn’t believe Greg Smith and thought it was he who has acted immorally

    • S. Anthony Iannarino

      I don’t know Greg Smith, and I have no idea if he acted immorally while he was with Goldman. I did believe that his resignation contained powerful language and powerful lessons for those willing to consider the implications for salespeople and sales organizations. 

      • Rvtl

        I can tell why he acted immorally.  He had a duty of care to all the stakeholders of Goldman first before he went public.  Also, he needed to show there was, in fact, harm being done, and that he tried to stop it. There are various ways to do this, but I won’t get into that here. To me, his was an emotional rant void of reason and not of a moral whistle blower.  I do agree with your approach to selling though. As a salesperson, you should believe your client will be better off having purchased your product/service.  Hence its value, for the both of you..

      • S. Anthony Iannarino

        Yes, the letter would have been more compelling had Smith written an account of what he did to prevent his clients from being harmed. My guess is that if those stories exist, they’ll show up in the book deal that is surely coming his way. 

  • Brian MacIver

    Caveat Emptor and your
    reply was Bullshit.

    do you know when a Salesperson is telling lies?

    their mouth very closely,

    their lips are moving, then they are lying!

    apologize to all Lawyers for borrowing their joke, just to make a point)

    main problem is Selling today is the myth of the “Trusted Advisor” model of the
    salesperson, (which you constantly promote) it doesn’t exist.  And, when Buyers begin to “Trust” Sales “Advice”,
    then they leave themselves wide open to abuse and exploitation.

    Selling is NOT about advising your Customer to buy your product on trust, which
    was EXACTLY the tactic shown in the documentaries on Lehman Brothers, and
    possibly other Investment Banks, to sell toxic debt products.

    Selling isn’t about “Trust”, that is for the unskilled Salesperson and the naive

    Selling is about “Demonstrating and Proving” Value to a Customer who does
    believe in “Caveat Emptor”, the very Customers that you describe.  Who do 75% of their buying on the Internet,
    BEFORE they even involve a Salesperson! 

    don’t sell ADVICE; we sell value adding products and services. 

    don’t sell on TRUST, we sell on proof. 

    don’t CREATE value by magic,
    we CONSTRUCT value with Customers demonstrating and proving the Value they

    term Sales relationships, and I have had clients for 30 years, is not based on
    TRUST, nor ADVICE.  It is based on
    excellent Interactive Skills, the ability to offer, demonstrate and prove
    Value, again, and again, and again. 

    Trust me; let me prove it: Buyer Beware!

    • S. Anthony Iannarino

      I am
      afraid we are going to have to agree to disagree, Brian. For my part, I will
      disagree vehemently (but as politely as I can). Trust is too important.


      one were to believe that every time a salesperson spoke that they were lying,
      then we would live in a very different world than the one that most of us
      occupy. This simply isn’t true; lying is the exception, not the rule. I hope
      that your experience in Spain isn’t that different from here in the States.


      couldn’t be more wrong about trust in sales. But you are correct in your
      assertion that trust does in fact leave one vulnerable. By trusting, one can
      indeed be hurt, whether that trust is in the advice one receives from a
      salesperson or the trust that accompanies any other human relationship. This is
      what makes trust such a valuable commodity!


      the word “modern” when referring to selling doesn’t in any way change the
      fact that human relationships have always been built on trust, including
      commercial relationships. As much as the Internet has changed buying and
      selling, it hasn’t changed human relationships or the values that we hold most dear.
      We still value honesty, and we work with people that we trust to be honest. We
      still value integrity, and we trust that the people we bring into our lives will walk their talk. We still
      value human relationships, and we trust others in order to engage in those
      relationships. Thank God this is true!


      I am
      fascinated by your idea that trust isn’t important in sales, and that we sell
      instead on proof. So when we provide reports and data, no trust is required to
      believe that the proof is correct and unbiased? When we provide references, no
      trust is required to believe that the experience that the reference shares will
      be our experience? When we read the case studies sales organizations provide,
      we aren’t required to trust that the information gives us the entire story,
      including the unfortunate missteps that all of us take in producing results for
      clients? When we refer a sales organization to another, on what do we make that reference
      if not that they can trust our word?


      trust, how do we gain our first client? How do we gain the first appointment
      with our dream client without generating the trust that we are worth their
      investment of time? How do we get a client to take a chance on a new idea if we
      aren’t trusted?


      said: “Don’t trust me. Let me prove it.” Letting you prove it means that I have
      to trust you.

      I am
      not cynical enough to believe I live in a world where no trust exists. I am
      happy that I can still do business with people that I trust, and that I never
      have to worry about their intentions. I hope that your experience changes! I
      can’t imagine living—or selling—in a world without trust. And thanks for
      providing your perspective; I hope that it is yours alone! 


    • Charlie Green


      I am a little bemused by your letter to Anthony.  As a co-author of The Trusted Advisor, and author of Trust-based Selling, I hate to tell you this but – that’s what you’re doing. 

      The Trust Equation, a little diagnostic tool I use, has four components.  In describing your own approach to sales, you nailed three of them:

      –Reliability (meaning a great track record of success);
      –Intimacy (assuming you mean what you said about “excellent interactive skills,” and
      –Credibility, meaning you’re competent, mean what say, talk straight and can back it up and so on.

      The only one you don’t demonstrate in your letter is low self-orientation. 

      I am not clear what your point is. You say that “the trusted advisor mode of selling doesn’t exist,” but as you describe yourself – you are one.  So, what are you, a unicorn?

      Brian, if you’ve got 30-year clients, it’s because you’ve developed a reputation for competence, reliability and interpersonal skills.  If that’s true, and I have no reason to doubt you, then I’ll bet you $10 that if we did a survey of your clients, what you’d hear them say is:

       “Why have we bought from Brian for 30 years?  Because we trust him, that’s why: he’s always delivered what he promised, he always is top-notch in competence, and I feel he understands me when I talk to him. He’s not like those fork-tongued caveat emptor salespeople you run into too much, he’s actually more like a, well, a trusted advisor to us.”

      Here’s what I bet you wouldn’t hear them say:

      “Why have we bought from Brian for 30 years? Because I don’t trust anybody, and we approach every sale as if every vendor is a crook, him too.  For 30 years in a row, he’s turned out to have the winning combination. But that doesn’t mean I trust him, hell no – he’s probably been setting me up for the kill in year 31, when he’s going to yank the chain and totally screw me.  That’s why I’m forcing him to go through the whole RFP process every time with every other jackass salesperson. Trusted advisor?  Hell no, Brian’s a crook same as them all, he’s just got more competence. At least, until the next sale.”

      How ’bout it Brian?  Want to do a little survey and report back?  

      • Brian MacIver

        Thank you for your considered reply. I would love to tell
        you I had spent two days surveying my Customers, but I just had not checked
        this blog for two days (Apologies).
        Also, I haven’t read your book, but I will Kindle it today. 
        What have I got against “Trusted Advisors”?  My experience, as a Sales Performance
        Consultant is this:  The most common
        source of Trusted Advisors in my Big Telco, Big Data and Big IT client base is
        TAS.  Who do many things very well, but
        not everything, for no Company is perfect.

        The TAS hierarchical approach to Selling with Trusted
        Advisors as the pinnacle is a persuasive, if IMO a flawed model.  It wrongly makes Trusted Advisors “aspirational”
        rather than “appropriate”.  Amongst my
        Clients we ended up with a considerable number of “Trusted Advisors”, who were
        Poor Sales Performers.  The rub was,
        previously, before they underwent the “change”, they had been Performers!

        I would argue that “Trusted Advisors” is just one of several
        successful Sales styles, not a desired “end game”.  And that the Trusted Advisor’s contracted
        purpose is the “Selling” of the Firm’s Products and Services, not the “Giving”
        of trusted advice to their Customer.  It
        is this mode of Sales “Trusted Advisor” which doesn’t exist!

        Further, I would argue that successful salespeople have a
        wide variety of Selling “Styles”, which they can “flex” to suit the Buyer from
        hard-nosed sceptic to naive dependant.  To have one style is to be right some of the
        time and wrong most of the time rather like a Clock that has stopped!

        On Customer “relationships”, which I believe are individual,
        I use an approach developed by Earl Naumann from his 1995 Book “Creating
        Customer Value, the path to sustainable competitive advantage”.  Together with Earl, I put to work his
        practices into Big Telco.  Were he to
        write the book today, I would insist he change the title to “CONSTRUCTING”
        Customer Value for that is what we did!

        As for our €10 bet, I will let you win without the survey
        and as payment I will buy your book.  I
        am not a Trusted Advisor, I am a Sales Performance Consultant, who sometimes
        gives Trusted Advice.  But, who always
        CONSTRUCTS Value for his Client Firm and his Clients.  (longest 1984-to date)

        I may well be a Unicorn “its horn was said to have the power to render poisoned water drinkable and
        to heal sickness.”  Only I exist, and spend
        my time de-training dysfunctional Selling Skills, and debunking Sales Myths
        which improves Sales Performance.

        It is curious is
        it not, that there was
        a widespread Disbelief in “Black Swans” which exist,
        yet a widespread Belief in “Unicorns”, which don’t exist! 
        Rather like a lot of Selling Skills!

        Good talking with

  • kathikruse

     Anthony, both of your posts are awesome! You are speakin’ my language.  So much so, that I felt inspired to write a post about them. It will publish tomorrow…”Social Flips the Table: Now, Let The Seller Beware”. (you’ll see it on Triberr :-)

    • S. Anthony Iannarino

      I am standing by, Kathi!

  • Mark Dalton

    I have to agree that I agree with Charlie and Anthony on the trust issue. 

    I also think that this is why I think Goldman Sachs (GS) have scored a massive own goal in their immediate response to Greg Smiths letter. Whilst we can’t say that Goldman Sachs have adopted the culture that Greg Smith alludes to, I find it quite telling that their response to his claims are to immediately castigate him as someone who has a grudge because of a lack of bonus or missed promotion. 
    If they as a company truly promoted a culture that put the clients best interests ahead of their own, then surely they would want some investigation into the claims and make every effort to weed out those individuals that were responsible for the toxic culture as Smith claims.I think it was Peter Drucker who said that culture eats strategy for breakfast every day. If GS wants to prove it has the right culture or at the very least, prove that it remains true to one of its key missions that ‘Our clients’ interests always come first. Our experience shows that if we serve our clients well, our own success will follow.” 

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