Goldman Sachs: PR and The Bottom Line

Lucas van Praag, Goldman Sachs' embattled PR chief

The PR industry’s three favorite case study subjects have all “confessed.” Tiger Woods gave a tightly scripted mea culpa with his mother in the front row. Toyota, personally led by CEO Akio Toyoda, submitted to a Capitol Hill pillory. But none has been as forthcoming as Goldman Sachs. In its 10-K statement, the company called “adverse publicity” a risk factor that could have ”a negative impact on our reputation and on the morale and performance of our employees, which could adversely affect our businesses and results of operations.”  

Is this the great admission public relations pros have been waiting for, proof positive of PR’s impact on the proverbial bottom line? In a recent interview, Goldman CEO Lloyd Blankfein claimed that the company is taking pains to explain itself–i.e., conduct public relations–after 139 years of not having to. Understandably, some things are hard to explain, such as Goldman’s well-publicized role in Greece’s debt meltdown, a new source of sleeplessness for global economic masters.  

Admitting a problem is the first step in recovery (The New York Post called a recent article “Goldman’s Rehab”). But many doubt Goldman’s sincerity when its PR chief is considered a PR disaster in his own right. Lucas van Praag, a native of England with an impressive command of the mother tongue, is being called arrogant, condescending and worse by the media and company critics. New York magazine has compiled Mr. van Praag’s “Most Withering Rebuttals.” In the end, The New York Observer’s quote from PR legend Howard Rubenstein says it all: “In any crisis, the spokesperson, or the head of the company, has to proceed with modesty.”  

Recently, Goldman Sachs has enlisted Texas-based PR firm Public Strategies, led by Dan Bartlett, George W. Bush’s communications director and counselor. This may be Goldman’s most telling public relations action. Three things must now happen:

1. Goldman Sachs must faithfully follow the plan that Mr. Bartlett and company develop
2. No more shoes can drop, à la the Greek financial crisis
3. Lucas van Praag has to stop using words like “chimera” and “effluent” if he is still allowed to speak to the media

Let’s see if Goldman Sachs really knows how to manage the bottom line.

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