THE BLOG
07/05/2010 12:57 pm ET Updated May 25, 2011

MEMO TO LLOYD BLANKFEIN

Dear Mr. Blankfein,

Goldman Sachs is clearly at a crossroads. It's not about whether the firm will be found guilty of the fraud charges lodged against you by the SEC.

It's not about whether your firm will survive and continue to prosper. There's little doubt it will, no matter how many standoff Senate hearings are held, and no matter what sort of financial reforms get enacted.

The real issue, Mr. Blankfein, is what kind of company you want Goldman Sachs to be going forward.

The threat you face is also an opportunity to rethink the role you play among your peers, and to redefine your company around something beyond simply maximizing profits.

Your challenge is to move beyond how much value you can add to the bottom line, and to widen your perspective to consider how much value you can add in the world.

Let's start with your employees. What kind of promise are you making to the young people who come to work for Goldman? Some would argue they're among our nation's best and brightest. They're almost certainly among the highest achieving and most driven of their peers.

In 2008, 40 percent of Harvard's graduating seniors went into banking or consulting and many of them went to Goldman. But here's a more telling statistic: only 20 percent of those seniors -- 1 in 5 -- would have made the same career choice if money were not a factor in the decision. The rest -- 80 percent -- would have chosen to go into the arts, the media, or public service.

Are we better off that they chose banking? Are they?

The value exchange you and your fellow bankers offer to top college graduates is time for money. You pay them more than anyone else does, and what you ask for in return is nearly all of their time and mind share.

It's a thin, one-dimensional exchange. They learn to trade, create arcane financial instruments and make deals, but not much else. And with that narrow perspective, the end has increasingly come to justify the means, and your industry ultimately imploded as a result, to everyone's detriment.

The people you hire don't have the time or the encouragement to reflect on who they want to be, to challenge themselves creatively, or to contribute to the world in which they live.

Instead, the most successful among them become money-making machines. Is it a surprise that they see their work not as a calling, but as a means to an end -- getting rich enough, fast enough that they can retire early, so that they can be free to do something more satisfying?

Here's what a former Goldman associate told a Washington Post reporter last week: "A lot of people decide to sacrifice much more time than they normally would because the money is so good, and then they believe they deserve extremely high pay because they're giving up so much time. It's not malicious. But there are a lot of unhappy people who end up in that situation."

I run an organization that helps companies better meet the needs of their employees. We've done a fair share of work in banks. Over and over, we've met people who drive themselves hard and work long hours in the pursuit of extraordinary material rewards. But we've also encountered a lot of bankers with a hunger for more satisfaction from what they do and more meaning in their lives.

Mr. Blankfein, after your testimony this week, most Americans don't buy your claim that Goldman is in business to "help government raise capital to fund schools and roads," or to "work with pension funds, labor unions and university endowments to help build and secure their assets for generations to come."

Instead, most Americans believe you and your fellow bankers are in business to secure your assets for generations to come.

Rather than trying to get more out of your people, could you consider investing more in meeting their higher needs for meaning and value, so the promising young college graduates you recruit come there for some reason beyond money.

It's striking that among Goldman's famed list of 14 business principles, not a single one has anything to say about your role in the community, or in the world. Or even about investing in your own people.

Is there something beyond providing superior returns that Goldman could come to stand for? Why not use more of the company's vast wealth, power, and intellectual capital to help address the world's economic challenges and add value to people's lives -- not as a way to burnish your image, but rather because that's what a great company ought to do.

If you stand for something more than money, the people you hire won't have to choose Goldman by default solely because you pay them more money than anyone else. And if you begin to meet their need for meaning and value, you'll truly attract the best and the brightest, and they'll help you redefine and recreate Goldman Sachs.

Sincerely,

Tony Schwartz