We thought it would be interesting to republish something we first posted a few years ago about the impact of not making the grade at Partner Managing Director level over at Goldman Sachs.
A reader wrote in:
'It's interesting to see all the stuff in the media about the biennial selection process employees go through in an attempt to become a Partner Managing Director at Goldman Sachs.
I went through that process in 2006 (the first elections under then new CEO Lloyd Blankfein, and the fifth since Goldman introduced the current process after the 1999 float). I'd worked at Goldman for almost seven years, having been hired from a rival firm. And from day one, partnership was the one thing on my mind. In fact, I even took a nominal drop in salary and came with no bonus guarantee as I was desperate to join the firm.
Very soon, I had Goldman in my soul, and I viewed everything I did in Goldman terms. I behaved as I felt a Goldman partner should, feeling that ultimately that would serve me well should my turn come to be nominated. Some said that as I was not a Goldman 'lifer' (i.e someone who hadn't worked anywhere except the firm), I would be at a disadvantage when it came to obtaining a partnership. But I never really believed that, tempting though it was to use this as an excuse when I was later told that a partner's life wasn't for me.
I'd done well at the firm, generating a good revenue stream almost from day one. Mind you, that was expected. Over the years, it was hinted that I was heading in the right direction, and that I'd one day probably be up for partner. That simply made me dig deeper, work harder and ensure that I continued to keep my nose clean. And, strange as it seems, its wasn't the prospect of all that money that was motivating me (around 300 partners are thought to have shared some 20% of the firm's $12.1bn record bonus pool last year, raking in an average $8m each). No, it was the status that I craved. A partnership at Goldman, of course, signifies that you have made it to the very top. It just doesn't get any better than that.
Anyway, the time came a couple of years ago when I was tipped the wink. I was up for partner. I knew full well, however, that this was no formality. Few are selected for consideration, far less actually finally make it (I calculated the odds at slightly less than evens). The process itself it supposed to be a secret outside the firm, although there have been several media articles over the years which have attempted to lift the lid on what occurs. Goldman has teams of partners, experienced in the ways and nuances of the firm, who head up groups which consider each candidate who has met the nomination criteria. Maybe 25% will fall at that hurdle and not even go through the formal vetting process (these are generally known as the 'C's). The lucky ones (the 'A's and B's) that are vetted never actually meet face-to-face with the partner who has their destiny in his or her hands. Rather the lead partner seeks the views of other partners, building up a consensus view, painstakingly noting down comments and anecdotes about performance and cultural fit. Almost all those rated an 'A' will make it through (although not all), and these represent between 20 - 25% of the partnership pool itself in any given year).
Typically, there are stories that partners meet and horse trade in darkened rooms, agreeing to put in a good word for a particular candidate in return for support given to a favoured son (or daughter). Such claims are denied by Goldman, however, and I think that the process is probably as pure as it can be, and generally based on merit. The selection of partners itself takes several weeks, and towards the end of the year (and before year-end in November) the names of the new partners are released across the firm. If you receive a telephone call from the CEO (in my case it would have been Lloyd Blankfein), you know before anything is said that you made it (if you haven't, that is, already managed to establish your fate). If your divisional head calls up and asks to see you, then you know the jig is up. My heart sank when my telephone rang and the divisional head was on the line. The pain of failure, believe me, is unbearable. Some who fail to make the grade take months to recover, whilst others never do. A few are even said to have never set foot in the firm again after being given the bad news.
After the names of the anointed have been made public, many of those who didn't make it will gradually leave the firm. For some, and I was one, Goldman will still express a keen desire to retain you. If you are a possible candidate for partner in two-years time, Goldman will not want to lose you. And the firm knows that the phone will soon be ringing, and that opportunistic headhunters will be enticing the disillusioned away with promises of untold riches. I never really understood why I didn't make it that year, and I guess it didn't really matter. Some held that the partnership elections in 2006 would be an early sign of the direction Blankfein would be taking the firm. He was, after all, a trader at heart, and Goldman had effectively become a big hedge fund. And I was in investment banking, a product range which was being slowly marginalized. I never bought into that either, and I'm not sure any conclusions about the strategic direction of Goldman can be drawn from the ranks of those who made partner last time out. I guess, for me, it just wasn't meant to be. But, at the time, it hurt like hell. Hell, it still hurts.
Within 3 months, and despite the best efforts of the firm, I succumbed to the enticements of a random headhunter. I collected my bonus and, with a heavy heart, moved to a rival firm. My salary was significantly increased, and I was given a two-year guaranteed bonus deal. My new employer cared nothing that I hadn't made partner first time round at Goldman. The fact that I was partner material was enough for them.
I gave it my best shot at my new firm, but it just wasn't the same. Deep inside, I knew that I had reached for the top at Goldman and had fallen short. After six months, and giving up two decent bonus guarantees, I resigned and left the industry for good. I'm lucky enough to have made enough money never to have to work again (provided I'm not reckless). I've spent the last 18 months making some good personal investments and generally deciding on what's next. I do appreciate how fortunate I've been in my career, but I will never quite get over not having made it to the top at Goldman Sachs. That firm gets under your skin'.
Our Highly Placed Professional says:
'Fascinating to see how the money is almost a secondary consideration for these guys. But don't kid yourself, Goldman has always prided itself on being a the cutting edge of industry compensation!
I roomed with a Goldman guy when I first started in the City. Our worlds could not have been further apart. I was at the humble and now defunct Yamaichi, where the training was non-existent and where we were thrown a contact list and told to get on the phone and do some business! My roomie, on the other hand, was going through the Goldman induction program. Training, examinations, time in New York - the works. I was struck, however, by how brainwashed he and his co-workers appeared to be. They lived and breathed the firm like characters in some movie. They would even go in on Sundays for most of the day just to show some 'face time'. It was like some private army!
But there was always another side to Goldman. Every year you had to do a 360 degree evaluation where you judged your peers, and they, in turn, expressed their views on you. And every year there would be a 10 to 15 % cull of the least performing staff (and that was in the old days, before it became fashionable). And lest I forget, I was always stuck by the 'negative trade report' for salesmen - if you didn't print a ticket on any given day, you had to submit a report to explain why, and what you had been doing with your time that day.
The rewards, of course, are huge at Goldman. But people there are so Alpha. They want it all - and then some. Most of us would last about 5 minutes at Goldman Sachs, which is why many apply, but few are chosen'.
1. 'I think the Goldman guy has no sense of self-worth. He needs to grow up, get a grip and do something useful with his life now, instead of snivelling about not reaching the top at one particular firm'.
2. 'My dear man, you have simply been ejected from the biggest gang in the playground. So what ? How about developing some emotional intelligence and growing up!'.
3. 'Send him to Iraq. That will really give him something to moan about!'.