Decision Making and Communications at Goldman Sachs


A great book on the history and rise of Goldman Sachs is The Partnership

I love the idea of work cultures who encourage thoughtful disagreement. As Charley Munger says, always invert! Or put another way, it’s good to strong opinions, loosely held – and the people around you to challenge those opinions.

[something] that makes Goldman Sachs different from other firms is not that all Goldman bankers agree — and they are, in fact, encouraged to disagree.

Anyone who has read accounts of Goldman’s knockdown, drag-out fights over going public will understand this, as will anyone who has read two great books about Goldman: The Partnership and The Culture of Success.

…Goldman Sachs bankers can disagree only before decisions are made; once all opinions are solicited, consensus is reached, and decisions are made, the decision is one made by the firm, on behalf of everyone, and it’s final. Mostly, other Wall Street firms from partnerships to giant investment banks are hotbeds of infighting, and you need only talk to a few bankers before you find evidence that they undermine management decisions, subvert prominent colleagues, or openly ignore one another.

Goldman forces communication, as well. The firm has a voice-mail cult that ensures constant communication; everyone communicates by voice mail (sometimes left at 3 a.m.), and the rule is that every voice mail, whether it comes from the CFO, a client, or a lowly analyst, has to be responded to within 24 hours. Jonathan Knee, a former Goldman Sachs banker who joined Morgan Stanley and then Evercore Partners, tells a funny story in his book The Accidental Investment Banker. He was used to Goldman’s rules that everyone had to respond to one another and communicate about clients. When he got to Morgan Stanley, he says, not only was he surprised that his colleagues hoarded clients and refused to speak to him, he received so few callbacks from his fellow bankers that for weeks he thought Morgan Stanley’s voice-mail system was broken.

If you like The Partnership, there is also a great book on the history of McKinsey Consulting called, The Firm



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