Adam Godley, Simon Russell Beale and Ben Miles in The Lehman Trilogy at the National Theatre A co-production with Neal Street Productions by Stefano Massini adapted by Ben Power Production team Director Sam Mendes Set Designer Es Devlin Costume Designer Katrina Lindsay Video Designer Luke Halls Lighting Designer Jon Clark Music and Sound Nick Powell Movement Polly Bennett Photo by Mark Douet
From left to right: Adam Godley, Simon Russell Beale and Ben Miles in 'The Lehman Trilogy' play at the National Theatre, London © Mark Douet

The senior partner of a law firm asks colleagues a simple question to assess the health of the organisation’s culture: “Why do you stay?”

There is a twist, he told me. They should not answer when they are in the flow of an exciting case, basking in the prestige and pay of their position, or looking forward to a sunny weekend surrounded by their admiring family. Instead, they should recall their worst day — when a senior colleague had bawled them out, say, the workload seemed unmanageable, and they arrived home in a rainstorm, too late to kiss the children good night. Why did they stay on that day?

For all the emphasis on scientific gauges of culture, powered by big data or artificial intelligence, this seems a good way of probing for organisational strengths and weaknesses. Last week, in a farewell note to staff at Goldman Sachs, outgoing chief executive Lloyd Blankfein half-answered the question: “When times are tougher, you can’t leave,” he wrote. “And, when times are better, you don’t want to leave.”

How corporate cultures rise and fall is on my mind because I recently watched The Lehman TrilogyBen Power’s adaptation of Stefano Massini’s epic saga about the bank, in a new production at London’s National Theatre. At the same time, the UK’s Financial Reporting Council has published its revised governance code, in which it urges boards to “assess and monitor culture”. 

The regulator guides directors towards the features of good culture, including honesty, openness, respect and a sense of shared purpose. It sets these against symptoms of sickness: a dominant chief executive, pressure to meet overambitious targets, and low levels of meaningful engagement between leadership and staff. Exactly the sort of faults that were laid at the door of Lehman’s last chief executive, the self-deluded Dick Fuld.

It is no plot spoiler to mention that The Lehman Trilogy, like Lehman itself, ends with Mr Fuld. In fact, the bank’s tumultuous collapse in 2008 merits only 10 minutes of the three-hour show. Most of the play describes the values, influence, and trajectory of the three original Lehman brothers and their descendants over a century and a half. With forgivable simplification, it lays the blame for Lehman’s eventual demise in part on how American capitalism distanced itself from real products such as those that the three brothers bought and sold in Alabama in the mid-19th century — textiles, cotton, coffee. The production suggests another, and more important, factor was the firm’s catastrophic cultural decay.

The final decline starts in the 1970s and 1980s, when stewardship of the bank passes from the family to traders such as the repulsive Lew Glucksman (who used to wield a small axe in the office) and his protégé Mr Fuld.

In the London production, the contrast is brought out by the fact that the actors portraying the brothers also play every other character. Even at the moment of bankruptcy, the darkest episode of the financial crisis, the trio are a visible onstage reminder, in their black frock coats and stiff collars, of the bank’s entrepreneurial origins and its pioneering early success.

Of course, Lehman needed to evolve to survive, as did Goldman Sachs. Culturally, the firms were once not so far apart. Indeed, at the beginning of the last century, second generation scions of the founding German-Jewish families prospered through partnering on deals, such as taking retailer Sears Roebuck public.

But Lehman failed to heed the advice now offered by the UK regulator: to monitor and control its poisonous sub-cultures, the “hotspots and outliers [that] can alert the board to a possible problem”. 

Like Glucksman and Mr Fuld, Mr Blankfein was a trader. But, whatever you think of Goldman as an organisation, he proved able to assimilate the culture of investment banking and hold the bank together through the financial crisis. His successor, David Solomon, is an investment banker (albeit one with a sideline in DJ-ing) who will have to achieve the reverse cultural trick.

Another FRC culture tip is to conduct exit interviews with people who quit. It is a step that companies often skip or rush. Mr Blankfein’s farewell note hints at a useful alternative. After a time, ask alumni what they miss most and least about the organisation.

Mr Blankfein forecasts he will miss Goldman’s people. It is a predictable response, but analogous to the reply the law firm partner hears most often when he asks colleagues why they stay: we wouldn’t want to let our mates down. There is one snag in using this as the ultimate test of good culture: many Lehman staff would have said the same 10 years ago, the day before the bank imploded. As Henry, Emanuel and Mayer Lehman knew, a rotten culture at the top infects the whole.

andrew.hill@ft.com

Twitter: @andrewtghill

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