Book Review
by William A. Hayes
The Partnership: The Making of Goldman Sachs by Charles D. Ellis. Penguin Press. 2008.
 We have recently seen the demise of some of the great Wall Street names: Lehman, Merrill, Bear Stearns. This has brought home the need to study what makes a financial firm a survivor and a success, with the strength to forge ahead in troubled times. There is no better source than Charles Ellis’ book on Goldman Sachs. Ellis was the founder and managing partner of Greenwich Associates, which has decades of experience as a strategic consultant to the financial community.
The Partnership is a very detailed, researched history of Goldman Sachs. The book is objective and clear. It discusses the failures, like the involvement with Robert Maxwell, and the often difficult road to results, such as the long process to establishing its money management business. The corporate culture is best expressed by a Hank Paulson quote: “The best protection is to continually reinvent ourselves so someone doesn’t do it to us.” One of the biggest reinventions was to go from the agent to the principal business. This produced some big profits, and now some big questions on Goldman’s future business model.
The title “The Partnership” implies a culture of teamwork, internal communication, and responsibility versus the silo structure and CEO arrogance that characterized the firms that failed.
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