From Our Briefings Newsletter

Published on17 DEC 2018

The article below is from our BRIEFINGS newsletter of 17 December 2018:

Briefly . . . With Goldman Sachs' Lloyd Blankfein 

As Goldman Sachs’ Lloyd C. Blankfein prepares to step down as chairman at the end of this month, he shared his thoughts on his legacy, leadership and lessons learned.

Lloyd, you were CEO of Goldman Sachs for more than 12 years – one of the firm’s longest-serving CEOs. What did you come to learn and appreciate about what it takes to be a great leader?

Lloyd C. Blankfein: Being a leader at Goldman Sachs is different than being a leader elsewhere because of its history and evolution from a partnership. For half of my career, the firm was a private partnership where the people you managed weren’t just employees to command and control – they were also your co-owners. During my tenure, I continued to embrace that philosophy. A real test of leadership in our organization is getting very talented people to subordinate their ego in the short term, to strengthen the firm’s platform so they can benefit from it in the long run. But you have to get them to see the opportunity for the firm and for them personally as a result of working for the firm as opposed to their individual glory.

You presided over one of the firm’s most challenging periods in recent history – the financial crisis. How do you think the firm has changed as a result?

LCB: I think one of the big takeaways for us was that while the firm did well in managing our risks and surviving the existential phase of the crisis, we had to deal with reputational issues. For our part, we went through a period of self-examination and decided we had to make sure our customers and clients saw us as more client friendly. Prior to the financial crisis, we thought there was virtue in anonymity. The less the world saw of us, the better it was for our clients and for us. But the financial crisis showed how influential we were to the world – and how influential the world was for us. Post crisis, we had to get people to know us as the committed and involved citizens that we are. 

Next year, Goldman Sachs will turn 150 years old. Very few institutions make it that long, let alone under the same name. Why do you think Goldman Sachs has maintained itself as a successful firm over that period across so many different generations and circumstances?

LCB: The keys to the firm’s longevity are the qualities that make Goldman Sachs the kind of place where the best people will want to work. The question then becomes what we are offering to incentivize the best people to want to work here. For example, we offer a culture where our leaders have an obligation to train people and make them better than they would otherwise be. We have an important network of relationships that will last a lifetime. We have values that are consistent with their values. Look at what many of our people do when they leave Goldman Sachs. Many go into philanthropy or government, which is attractive to people who want to work at an organization that can prepare them for such work later in life. We’re a firm that’s influential and the work that we do is important. So people come here because they want to be influential in their lives and, if they’re going to work hard, they may as well work hard on important things. And if you keep getting smart people to work here, it’s easier to attract other smart people.  So, if we can continue to get a higher proportion than others of ambitious, capable and smart people to want to have their careers at Goldman Sachs, then we will endure.

You’re known to be a history enthusiast. Since you’ve been here, you’ve interviewed historians such as Doris Kearns Goodwin and Ron Chernow as part of Talks at GS. You’ve also interviewed people who have been a part of history, like civil rights icon Congressman John Lewis. What have you learned from your reading and those conversations that have shaped your thinking about current events?

LCB: I’m a great believer in cycles and if history doesn’t always repeat itself, it often rhymes as Mark Twain was purported to have said. For example, we are today seeing pressure on parts of the tech industry that is perceived to be overly powerful and influential. In the early 20th century, we saw similar pressures on the oil industry, when Standard Oil was broken up. Later, we also saw it happening with AT&T and more recently, on parts of the financial industry.

Knowing history has also helped me a lot personally, so that when things were high and frothy, I had a sense that wouldn’t last forever. And when things were negative and nasty, I also knew those periods wouldn’t last forever.

You have also been vocal on Twitter on social issues, such as marriage equality, immigration and race relations  and one of the few Wall Street executives to take a public stance on divisive social issues. Are there any issues you wished you would have weighed in on more? And do you think it made a difference?

LCB: When I commented on things publicly it was either on issues that affected our firm and were on topics that we had an expertise in – whether it was tax policy, budget deficits or the prospect of a government shutdown. But I also had a duty to comment on social issues, such as marriage equality, LGBT rights and immigration policies, that affected the ability of our people to do their jobs. Part of my job as CEO was to be a champion of our people. If people aren't free to travel with their significant others because they can't get the same visas, or if we couldn't move our people to another office because of immigration policies, then I had an obligation to speak up to make sure our people are free to work in an environment where they can live up to their professional potential. On issues related to what we do at Goldman Sachs, I'm licensed to talk. In other cases, I'm obligated to speak up. I think I weighed in on the issues where I should have.

What would you like your legacy to be? 

LCB: I’d like to be thought of as somebody who was fully committed to the firm, cared for its people and made the firm stronger during the period of time for which I was responsible. And I would like people as individuals to have appreciated my commitment and think that I made as many people as possible be better than they would otherwise be.

What do you think you’ll miss the most? And what are you looking forward to in your next chapter?

LCB: I’ll miss the interaction with the people we were just talking about. In some ways, I can’t wait to stop worrying about stuff. But I also think I’ll miss worrying about stuff. It’s the background noise. I always had something I needed to be thinking about. I’m looking forward to figuring out how to fill the gap.