Goldman Sachs suffers the perils of PR spin
One of the biggest challenges facing a company under fire involves resisting the temptation to downplay the severity of the crisis. There is no shortage of crisis communications advisors who may advocate telling white lies or less inflammatory half truths--a practice euphemistically known as "spin"--but that approach almost invariably makes the situation worse. Goldman Sachs' misguided PR effort to combat its mounting reputational crisis is a textbook example. When the Securities and Exchange Commission first unveiled allegations that Goldman had misled investors when it sold a package of risky subprime mortgage-related securities, known as Abacus, the mighty investment bank wasted no time in thundering that the civil allegations were "completely unfounded" and vowing it would vigorously challenge them.