I’ve been reading “The Partnership: The Making of Goldman Sachs” by Charles D. Ellis. After reading chapter 12, entitled “Principles” I felt that I needed to post them:
1. Our clients’ interests always come first. Our experience shows that if we serve our clients well, our own success will follow.
2. Our assets are people, capital, and reputation. If any of these are ever lost, the last is the most difficult to gain.
3. We take great pride in the professional quality of our work. We have an uncompromising determination to achieve excellence in everything we undertake. Though we may be involved in a wide variety and heavy volume of activity, we would, if it came to a choice, rather be best than biggest.
4. We stress creativity and imagination in everything we do. While recognizing that the old way may still be the best way, we constantly strive to find a better solution to clients’ problems. We pride ourselves on having pioneered many of the practices and techniques that have become standard in the industry.
5. We make an unusual effort to identify and recruit the very best person for every job. Although our activities are measured in billions of dollars, we select our people one by one. In a service business, we know that without the best people, we cannot be the best firm.
6. We offer our people the opportunity to move ahead more rapidly than is possible at most other places. We have yet to find the limits to the responsibility that our best people are able to assume. Advancement depends solely on ability, performance, and contribution to the firm’s success, without regard to race, color, age, creed, sex, or national origin.
7. We stress teamwork in everything we do. While individual creativity is always encouraged, we found that team effort often produces the best results. We have no room for those who put their personal interests ahead of the interests of the firm and its clients.
8. The dedication of our people to the firm and the intense effort they give their jobs are greater than one finds in most other organizations. We think that this is an important part of our success.
9. Our profits are a key to our success. They replenish our capital and attract and keep our best people. It is our practice to share our profits generously with all who helped create them. Profitability is crucial to our future.
10. We consider our size an asset that we try hard to preserve. We want to be big enough to undertake the largest project that any of our clients could contemplate, yet small enough to maintain the loyalty, the intimacy, and esprit de corps that we all treasure and that contribute greatly to our success.
11. We constantly strive to anticipate the rapidly changing needs of our clients and to develop new services to meet those needs. We know that the world of finance will not stand still and that complacency can lead to extinction.
12. We regularly receive confidential information as part of our normal client relationships. To breach a confidence or to use confidential information improperly or carelessly would be unthinkable.
13. Our business is highly competitive, and we aggressively seek to expand our client relationships. However, we must always be fair competitors and must never denigrate other firms.
14. Integrity and honesty are at the heart of our business. We expect our people to maintain high ethical standards in everything they do, both in their work for the firm and in their personal efforts.
My favorites are number four, number seven, and number fourteen.
Sidney Weinberg (long-time leader of Goldman Sachs a.k.a. Mr. Wall Street) said,
“The press that praises you when you’re up is the same press that kicks you when you’re down”
Despite the negative media attention that Goldman Sachs is currently getting, we can learn from these principles.