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?
Share this post with your network
Filed under: Sales