Public relations consultants are the great unsung heroes of the business world.
These guys are not just ad execs who come up with catchy slogans or signature logos. They’re evil geniuses who prowl the shadow world of our subconscious.
In Hollywood, every studio, talent agency or major star has a go-to guy. This is the specialist who gets the call when a blockbuster with a bloated budget needs a boost or when a fallen star needs a public makeover.
When Aussie-born actor Mel Gibson was arrested for driving under the influence of his own stupidity, and the headlines roiled with his unseemly racial epithets, his first call wasn’t to his lawyer.
To companies that need their public images rehabilitated, a savvy PR consultant is worth his weight in stock options.
Just ask Goldman Sachs.
The mega-bank often tagged with the moniker “Goldmine Sachs” because of its prodigious money-making, is facing harsh public criticism for the $20 billion in year-end bonuses the firm plans to pay its execs only months after being bailed-out by the U.S. taxpayers. While most American businesses have been clawing and scratching to keep their doors open, Goldman posted an eye-popping $3.2 billion profit in the third quarter.
A Dazzling Distraction
In a vague mea culpa, and in an effort to put a friendlier face on the public’s perception of the firm that has been branded as a band of merciless profiteers, Goldman has teamed up with Warren Buffet, the world’s most beloved investor, to unveil a $500 million initiative to help America’s small businesses.
It’s brilliant!
Just when you thought it was safe to start hating Goldman again, they pull a dazzling feat that would have left circus promoter P.T. Barnum speechless. They’re like the virtuoso magician who uses a scantily-clad assistant to divert your attention away from his sleight-of-hand.
Buffet’s involvement with this dexterous promotion is no accident. He is Goldman’s largest single investor. Consequently, it’s in Buffet’s self-interest to be become the public face associated the effort to help the Wall Street bank overcome the slew of negative publicity it has recently been forced to endure.
Under the program dubbed the “10,000 Small Businesses Project,” Goldman will set aside $300 million to support Community Development Financial Institutions (CDFI) certified by the Treasury Dept. CDFI’s include banks, credit unions and investment funds that target low-income and otherwise disadvantaged populations.
Goldman will set aside another $200 million for scholarships to community colleges and universities around the country. The money is intended to fund training and educational opportunities for under-served business owners.
In a Tuesday press conference that could have been orchestrated the original Spin Doctor, Alastair Campbell – the U.K. public relations specialist credited with resurrecting British Prime Minister Tony Blair’s political career and the man the Queen called when Prince Andrew was photographed wearing a Nazi uniform at a costume party – Goldman CEO Lloyd Blankfein made a rueful admission. “We participated in things that were clearly wrong and have reason to regret,” he said. “We apologize.”
Strategically Scripted
Without missing a beat, Blankfein turned the podium over to the grandfatherly Buffet to describe the firm’s commitment to helping small businesses. “Our recovery is dependent on hard-working small-business owners across America who will create the jobs that America needs,” Buffett said. He later added: “I would not be doing this if I didn't think there was going to be a significant net benefit to small-business owners in this country.”
Goldman's initiative should not be dismissed as a mere public relations stunt. The $500 million they’ve earmarked for the program isn't chicken feed. On the other hand, the company still wants to dole out bonuses to its execs equal to 40 times that amount.
Blankfein and his fellow Wall Street cohorts argue that such compensation is essential for the firm to retain its talent base. Given Goldman’s consistent track record of success, it’s hard to dispute Blankfein’s position.
Here’s an alternative idea that may not only burnish Goldman’s public image, but also might symbolize some charitable restraint as we approach the holiday season.
Rather than handing out $20 billion in lavish bonuses this year, Goldman should cut the promised compensation in half. Instead of committing only $500 million to its small business initiative, it could seed the program with 20 times that figure.
The public relations mileage Goldman will get from this mammoth gesture will pay uncounted dividends for years to come. At $10 billion, the true benefit to small businesses will be palpable. A deed of this magnitude may also humiliate other mega- banks into following suit.
As the legendary P.T. Barnum often said, there is only one liquid a man could use in excessive quantities without being swallowed up by it. Printer’s ink.
By putting $10 billion into the program instead of a paltry $500 million, Goldman could net a hundred-fold return in positive PR ink.
John Cohn is a senior partner in the Globe West Financial Group based in West Los Angeles. He may be contacted at www.globewestfinancial.com
