本日佳句 – The Making of Goldman Sachs, Part II
Posted in Investment, Quote on Feb 16th, 2010
With Whitehead’s persistent and cautious “prune losers, feed winners” style of management, the whole IBS [Investment Banking Service] organization became constructively infected with commitment: first to specific actions and transactions and later to an overall strategy – and eventually to a firmwide culture and x commitment to a new, organized way of doing business.
- The Partnership: The Making of Goldman Sachs, p.161
As George Doty observed: “Goldman Sachs’s new business development organization was by no means an overnight success. For several years, it was a money loser. That’s one of the main reasons other firms did not duplicate it. Who wants to duplicate an experiment that is a radical departure from the tried and proven, and doesn’t seem to be working all that well?” It would take ten years and several false starts before Whitehead’s innovation worked out.
- The Partnership: The Making of Goldman Sachs, p.163
Whitehead’s IBS organizational structure also made it possible for Goldman Sachs to follow a low-risk and high-impact “fast follower” strategy on new products and services. Let other firms be first with new ideas, absorbing the costs and pains of being on the “bleeding edge” of innovation. Study what worked and improve it if possible, sort quickly through more than a thousand client relationships to select the most likely prospects for the new services; then, using IBS as the delivery system, take the transaction specialist to all the most promising prospects; and finally, by outselling the innovating competitor, come from behind quickly to do the most business and become the recognized experts in the new service.
- The Partnership: The Making of Goldman Sachs, p.175
In sustained pursuit of his strategic goals, Whitehead combined disciplined planning with reserved affability. He was quite unconcerned about being demanding of others. Smoothly rational rather than emotional, he never fraternized with the troops or had pals within the firm. Respected, but not loved or even particularly well liked, and often considered aloof from the others, who regularly socialized together, Whitehead was called, behind his back, the great white shark. He never cajoled or coddled and could be hard on investment bankers who sought praise or had a high need of ego celebration. Whitehead calmly obliged conformance in large matters and small.
- The Partnership: The Making of Goldman Sachs, p.179
Whitehead not only designed and staffed his productive organization, he made it work, saying to one banker after another, “You can do it,” and always clearly implying, “and if I hold you to it, you will do it.” “John was almost regal in the way he acted,” says Smith. “I never met anyone else like that in my life. It’s really quite amazing. He tells you exactly what he wants you to do; gives you the clear understanding you have no alternative and must do it; then proceeds to encourage you to believe you might very well be able to do it; and then continues on to give you the feeling you might even enjoy doing it, particularly if you commit your every effort to be sure you’ll succeed.”
- The Partnership: The Making of Goldman Sachs, p.180
If Goldman Sachs wanted to get into a business, it preferred to give the challenge to some of its own most promising young people. “When, as we rarely did, we decided to go outside the firm for talent, we avoided hiring whole groups or teams. Instead, we would identify the very best people, get to know them well, and bring them over individually. These new individuals would learn the Goldman Sachs culture and either blend into the firm or they would not make it at Goldman Sachs. We always tried to be creative with the new techniques and new financial products, but I never thought we had to be first with everything. I was perfectly happy to have another firm be first with a new idea because I was confident that with our superior marketing organization, we would improve the product and then achieve dominance through distribution, while those other firms put their reputation at risk if it didn’t work. We control our growth rather tightly so things don’t get away from us.”
- The Partnership: The Making of Goldman Sachs, p.180
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