level of talent and hard work. I remember thinking the firm’s policy on compensation range was almost “socialist.”
Family Values
The firm also instilled a feeling of “family.” Goldman inculcated its values in other ways as well. When I started, I was assigned a “big buddy” who had graduated from business school and worked at Goldman for a few years to work with me on my first few projects. Big buddy relationships could be traced like a family tree: my big buddy had a big buddy, and so on. He also had little buddies like me. We were “related,” and one could essentially trace his “ancestors.” It was an informal network, and people had a sense of pride in their lineage of buddies.
Fortunately, my big buddy was great (as were my several little buddies). He had been an athlete at a small college, worked as an accountant, and pushed his way through to an Ivy League business school and into Goldman. Someone told me that when my big buddy had been a summer associate, he essentially slept under the desk in his cubicle because he wanted to make sure he would get a full-time offer. When I sheepishly asked another associate whether the story was true, he scoffed and said, “Of course not.”
I was relieved.
Then he walked me to the other side of the floor, to the office of Peter Sachs (a descendent of the original Sachs). He pointed, smiling, to a worn leather couch and advised me to take short naps there when pulling all-nighters, adding, “It’s a lot more comfortable than a cubicle.”
In addition to teaching me financial analysis, my big buddy gave me hints about what to wear and how to act. His general advice was don’t do or wear anything to draw attention to myself.
I also was assigned a mentor—a vice president—who was supposed to speak to me about my career and give me a senior connection to the firm. If my big buddy was like an older brother figure, my mentor was like a father figure. He took me to lunch or dinner periodically and told me which projects I should work on and with whom. He also spoke to other senior people to get me assignments that would help me improve. In addition, I sat in a cubicle right outside a partner’s office, and we shared the same assistant.
My mentor told me that everyone was expected to accept any social invitation from another Goldman employee (not to mention attending every department or firm meeting or function). He told me there was no excuse for missing a wedding, funeral, bar or bat mitzvah, or christening. My London wedding in 1998, when I was an associate, was attended by the head of my department, one of the co-heads of banking, and a member of the management committee.
After seeing how my mentor and the partners worked, I certainly didn’t need codified business principles to understand the ethic. One partner literally had holes in the soles of his shoes. My mentor had holes in the elbows of his shirt. Both worked twelve- to fourteen-hour days and on the weekends. I once had to call a partner at his home on Christmas Day to ask him a question and got no complaints. My mentor had an L.L.Bean canvas briefcase, and one of the partners carried his things and paperwork in a large brown paper bag. I was afraid to carry the new leather briefcase my parents had given me for college graduation. And I made sure I was in the office before my mentor and the partners, and I left after they did.
When I started at Goldman, I was handed a two-hundred-page, green-covered directory with every employee’s and partner’s home address and work and home phone numbers (cell phones were not widespread, and e-mail was years away from being used at Goldman) as well as summer or weekend contact information. Obviously, having readily available contact information increased efficiency, but the other message was that you were expected to be reachable at all times—no matter who you were. The directory seemed like a club book, and it reinforced the feeling of being in a family, adding to the flatness of the organization.
One implication of the value of keeping a low profile was that there were to be no superstars.35 The implicit proscription of displays of ego extended beyond office walls. Unlike other investment banks, which allowed their bankers to be quoted by the media, Goldman preferred its M&A bankers to be “anonymous executers of transactions.” The unspoken message was clear to all: “No one is more important than the firm.”36
Goldman also invested serious time and effort in training. Most analysts and associates joining Goldman from school are trained over weeks to learn the firm’s history, expectations, processes and procedures, and organizational structure. The primary intent is the socialization of new members. During my training, various Goldman executives came and spoke about the Goldman history and their departments. Junior people gave talks about their jobs and explained how to be successful at Goldman. There were group dinners and cocktail parties. We learned specifics that would help us in our day-to-day jobs, such as Excel spreadsheet-modeling skills, but it was also a way for new people to gain exposure to various people and departments that would help trainees think about problems or provide information to help clients. The people we were in training with were our “class,” and we developed a strong identity as members of our class. You would also be evaluated by comparison to those in your class. Even with the implicit competition, we felt a great camaraderie. My twenty-year class reunion party in 2012, sponsored by Goldman, drew people from all over the world. Retired senior partners also attended.
After the initial sessions, Goldman provided constant formal training: tools to do the job better, updates on product innovations or trends, information about how to be a better interviewer or mentor, training on how to better provide clients with full solutions and not only a product solution, and updates on compliance and legal issues as well as best practices. Not a month went by without some sort of formal training. We also had outside guest speakers to talk about specific topics. As we progressed in our careers, we received specialized training for any promotions—usually followed by a cocktail party in which partners congratulated us, perhaps followed by handwritten notes of congratulations from various partners. In addition to training, we attended many department functions, including holiday parties, strategy sessions, outdoor bonding exercises, and picnics—even group trips to the beach or skiing (often, spouses were invited).
Goldman also strongly encouraged participation in community and public service. Most people looked up to and admired Goldman employees who went on to public service, and those who were hired from government. You were expected to participate in Goldman’s Community Teamworks program, an initiative that allows employees to take a day out of the office and spend it volunteering with local nonprofit organizations. The firm also matched the charitable contributions of employees, and partners generously gave to their alma maters and other nonprofit organizations. In some interviews, partners explained that citizenship had multiple purposes: to do good, to make people feel good about where they worked, and, admittedly, to extend Goldman’s network.
Long-Term Greedy
Goldman’s foremost principle—of “clients’ interests first”—entails doing what is best for the client, regardless of the size of the fee (whether it will be received now or later) and never suggesting deals to clients specifically to generate fees. Putting clients first requires a commitment to the honesty and diplomatic candor that enable clients to trust Goldman to honor confidentiality of information, provide reliable advice, and not pull any punches. This honesty was a hallmark of Goldman’s earlier days, and the firm’s reputation for ethical behavior distinguished it among Wall Street firms.37
When I was a financial analyst, we were asked to review the strategic alternatives for a division of an industrial company. Internally, we informally gathered about a dozen M&A bankers and debated the best courses of action for the client. During the discussion, a young associate revealed something the CFO had said: that the client CEO thought the division in question should be sold, and pointed to the data and analysis that would substantiate this point of view. Goldman would collect a fee if the division sold.
The vice president who was assigned to advise the company patiently listened and then snapped, “The CEO hired us for our unbiased advice, and not to justify what he thinks.”
We incorporated the group’s suggestions and then spent days going from one partner’s office to another, discussing the merits of various courses of action. I was impressed that all these partners would take the time to listen to discussions about