George Steinbrenner’s recent passing coupled with Bethany McLean’s Vanity Fair expose on Goldman Sachs’ changing corporate culture raises an important question for those thinking about stepping down and handing the reins over: How do I maintain the narrative I’ve worked so hard to create? In the various eulogies of the “Boss” what stands out the most is his commitment to winning. Everything about the Yankees from the overpriced hot dogs to the “no facial hair” policy reflects this goal.
Steinbrenner relinquished day-to-day control of the team in 2007 and entrusted his sons, Hank and Hal, to run the business. By all accounts, Hank and Hal are more reserved than their father and are more content to remain in the background and sign checks. Undoubtedly, since the brothers took over the Yankees the team has become a more corporate entity that uses its storied name to roll out a regional sports network and other numerous licensing and merchandising agreements.
As last year’s championship illustrates the Yankees remain committed to fielding a world class team. Still, the championships are no longer pursued with the insulated goal of winning. Instead, championships seem to serve the revenue machine. The narrative, dedicated to winning at any price, that Steinbrenner created has given way to a “money first” culture.
Conversely, a similar shift has occurred at one of the nations most storied and reviled financial firms, Goldman Sachs. As Bethany McLean writes: “As Goldman grew, it developed a unique culture, characterized by impossibly hard work, loyalty, secrecy, and a lack of flashiness. Senior executives there–unlike those at other firms do not have palatial offices with private bathrooms. In the late 1970s, John Whitehead then managing partner put what are still Goldman’s 14 Business Principles on paper. The first: ‘Our clients’ interests always come first.'”
As current CEO Lloyd Blankfein rose to power a new culture overtook the firm. In the words of one managing director, “If the old Goldman made its money taking Ford public the new Goldman made money hedging the cost of platinum for Ford.” One would be hard pressed to imagine Sidney Weinberg’s firm defending itself from allegations of improper trading activities.
Leadership transitions are under-realized opportunities to reflect on organizational culture. In the case of the Yankees and Goldman Sachs the dominant corporate culture has changed with a new management team in place. Firms must change in the face of differing circumstances, this much is certain. However, change must be negotiated with past successes in mind. These two iconic groups are where they are because they ingrained employees with a winner’s mentality. Time will tell whether these changes are for the better, but I think we can all agree that something has been lost, something that is much harder to regain: mystique.
Picture Credit: Wally G