Stop Trying to Fit In | Former Goldman Sachs CEO Lloyd Blankfein

0:00 Early in his career,

0:01 Lloyd Blankfein was constantly judging the room and himself.

0:04 Who shall I be this time?

0:06 How shall I sound this time?

0:07 He grew up in public housing in Brooklyn

0:10 and arrived at Harvard feeling like an outsider.

0:12 Then came the decision that would shape the way

0:15 he carried himself for the rest of his career.

0:17 Somebody put his hand on my shoulder and said,

0:19 "Lloyd, you may think you're changing,

0:20 but everybody knows exactly who you are." And so,

0:22 I decided I might as well go with it because I'm not fooling anybody anyway.

0:26 For the future Goldman Sachs CEO,

0:28 that meant stopping the performance and becoming

0:30 more comfortable with who he was.

0:32 I think what's prized most in the world,

0:34 whether people acknowledge it or not, is, you know, authenticity.

0:37 But as he rose through the firm, Blankfein also had to learn another lesson.

0:41 To be a good teammate, you have to not only take criticism,

0:44 but you have to be a little softer when you give it.

0:46 These are Lloyd Blankfein's Executive Decisions.

0:55 Did you feel growing up, and in your early years,

0:58 whether it was at Harvard, Harvard Law School, J.

1:01 Aron, did you feel like an outsider?

1:03 Well, I did.

1:04 I wasn't a lot like my classmates.

1:07 I came from public housing,

1:09 and I went to Harvard and I had roommates that had gone to private school.

1:13 Yes, I was an outsider, I was a striver.

1:16 And in my experience when I meet other

1:18 people who are in senior positions all over,

1:20 if you unpack their stories, you know they kind of were that way too.

1:25 I think it's helpful in some ways.

1:28 But from a very early age you didn't let that become an issue,

1:31 you didn't let that become something that kept you down.

1:33 Actually, I think reading Streetwise, you used it to drive you on.

1:37 Is that the case?

1:38 It did, and it gives you perspective.

1:41 It also gives you, delivers you a higher EQ, Emotional Quotient,

1:46 about people because you learn to read

1:48 the room better because you're always very conscious,

1:51 less about what you're communicating and really

1:54 what the other person wants to have.

1:56 You know, you become a little bit more of a pleaser and that helps you.

2:01 I'm sure everything has a good side and a bad side.

2:03 I'm sure it's burdensome in some ways and helpful in other ways,

2:07 but can't help myself.

2:08 I go into a room and I'm thinking how am I being perceived.

2:14 I'm conscious you may not hear it as much as other people do,

2:17 I have a kind of an outer borough New York City kind of an accent.

2:23 I once said who shall I be this time?

2:26 You know, how shall I sound this time?

2:28 And somebody put his hand on my shoulder and said,

2:30 "Lloyd you may think you're changing but everybody

2:32 knows exactly who you are." And so,

2:34 I decided I might as well go with it because I'm not fooling anybody anyway.

2:38 Yeah.

2:38 Let me talk a little bit about your earliest role

2:40 models and I think they maybe came from your family.

2:42 You've got this amazing grandmother who you

2:43 were living with at one stage as well.

2:45 You've got your father who worked in the post office,

2:47 but a really hardworking guy and really helped drive you,

2:50 and you've got your mom,

2:52 you've got your sister as well who is I think eight years older than you?

2:54 Nine years older.

2:55 Yes.

2:55 Nine years older and was just a phenomenal person in bringing you up as well.

2:59 Were these the early mentors?

3:01 You know, I hate to say it because it was such a good lead-in, but not really.

3:06 From very early on, I really just wanted to get out of the neighborhood,

3:10 get out of the context that I was in, go.

3:13 And for me, the symbol was to go to an out-of-town school, to get accepted.

3:17 It would mean, in my case,

3:19 having to get a scholarship and go to an out-of-town school.

3:21 And my parents, who I really, really appreciated, had a much tougher life.

3:26 You know, they're blue-collar, blue-collar people, workers, laborers.

3:30 You know, my dad didn't have a lot of opportunity, so I appreciated them,

3:35 but they really weren't that much of a role model

3:37 for me because I was trying to get into a different role.

3:40 You know, you watch television,

3:41 you see how other people live, other people, you know.

3:44 I didn't know anybody who lived in a real

3:46 house as opposed to an apartment in an apartment complex,

3:49 but I aspired to all these things that you saw and I worked towards it.

3:54 So, it was you that drove yourself,

3:56 not anyone particularly in your early childhood or your developing years?

3:59 I felt that way, I can't think of anybody who I aspired to be.

4:03 I didn't know anybody growing up whose father went

4:06 to work in a suit or you know wore a tie.

4:11 I didn't have that stuff, so I always try,

4:14 I mean I didn't affect that stuff, I just wanted to leave where I was.

4:18 I find that phenomenal.

4:20 I've conducted 22, 23 Executive Decisions interviews now.

4:24 People come from all kinds of backgrounds.

4:26 One from a slum in Casablanca,

4:28 another one from rural Kentucky where he was working

4:30 in the garage at 13 and found it really tough,

4:32 but they all had a mentor who said to them no, you can go and do this as well.

4:37 So, for you to get to Harvard and then Harvard

4:40 Law School purely on the back of your own drive,

4:44 that is quite an incredible thing.

4:45 Well, I'm here.

4:46 So, if I didn't have that, I wouldn't be talking,

4:48 there'd be somebody else in this chair talking to you.

4:50 I was always driven that way, yes, I was.

4:52 But I mean it wasn't like, I mean I think I had a perspective on it,

4:55 I think I had a sense of humor, I think if it didn't work out,

4:59 I would have adjusted to it, but I was encouraged by incremental success.

5:05 And so, I did well in school and, I

5:08 mean I had people who helped me along the way.

5:10 My high school didn't have a college office

5:13 that would prepare you to apply to colleges.

5:15 I went to a different high school just to go to their college night and there

5:19 was somebody manning a booth who was

5:21 representing Harvard and he gave me an application,

5:24 he chatted with me and I filled it out.

5:26 I filled it out like you'd filled out

5:28 a landing form when you were coming into a country.

5:30 These were meant to be essays and I just wrote it off my head.

5:35 But I give university a lot of credit because they found me.

5:39 You know, it's not done by statistics, they read your application,

5:43 they give you an interview and I'm lucky they saw something.

5:47 When did you decide you wanted to go to Harvard?

5:50 It doesn't get more blue blood as opposed to blue collar.

5:52 Oh, I decided why I wanted to go to Harvard when I got into Harvard.

5:56 I never saw it before.

5:58 I just applied to all the brand-name schools that I could.

6:03 So, it was a bunch of Ivy League schools and then the state school of New...

6:07 Is it Yale that turned you down amongst others?

6:09 Yes, of course.

6:09 I didn't get into all of them, you know, to this day I still have some

6:14 admiration for them because they were smart enough,

6:15 they turned me down, but I thought I would end up in a state school,

6:19 which wouldn't have been so bad.

6:20 And then, freakishly,

6:21 I got into a couple of these Ivy League schools and that was

6:24 a big moment and there was a lot of apprehension associated with it.

6:28 I hadn't met anybody who'd gone to a school like that.

6:30 And when I went there,

6:32 I'm sure my roommates and friends that subsequently became friends thought I

6:37 was a Martian or someone from someplace far away, but it worked out.

6:42 But you yourself felt like you were trying to fit in.

6:45 You were buying Lacoste T-shirts to fit in.

6:48 You were trying to buy the right suit,

6:49 the right sports jacket to fit in as well.

6:51 And then when you were going to friend's homes,

6:53 you were like, "Wow, this is phenomenal.

6:54 I didn't know people live like this." But when you brought them back,

6:57 you felt very self-conscious, didn't you?

6:58 I did.

6:58 And then I felt embarrassed with my friends,

7:01 and then later in life, I felt embarrassed about having been embarrassed,

7:06 because that was terrible because I felt, you know,

7:10 was I being fair to my family and those feelings.

7:12 And now I decided that I'm not going to be so hard on myself,

7:16 and it's just a kind of a normal thing.

7:19 Right, I'm going to spin forward now.

7:21 You've got your undergraduate degree at Harvard.

7:23 You've done really well in Harvard Law School.

7:25 You've moved on to a great company

7:28 a little bit further down the line, Donovan Leisure.

7:31 You're a successful, hardworking lawyer looking at kind of fairly dull areas,

7:37 tax and what have you and looking at the nuances of tax, but you've made it.

7:42 Why on earth did you look to throw all that away

7:46 and becoming a trader or a salesman at a small brokerage?

7:51 Commodity?

7:51 Well, I was working at that job, but I didn't love the job.

7:55 And for me, it was a chore.

7:58 I was living in New York.

8:00 New York is a very finance-oriented town.

8:03 So, I started applying for other jobs and those were jobs in finance.

8:07 I started interviewing at this small commodity trading firm called J.

8:11 Aron.

8:12 And then during this elongated interview process Goldman acquired them,

8:15 you know that was lost on me,

8:17 I didn't even observe that, and it didn't really matter

8:19 for a few years because it operated separately for a long time.

8:22 But I joined this company, they gave me a job and it turns out in hindsight,

8:27 I found this afterwards,

8:28 they hired 20 people in the hopes that they'll have two at the end.

8:33 And it was a trading environment,

8:34 and you know rough and tumble and people were screaming

8:36 at each other waving their hands and it was sort of like,

8:39 believe me, that was an environment that I had

8:41 grown up in and so I was quite comfortable with.

8:43 So you felt actually that your Brooklyn background, you'd kind of, "I can do,

8:47 this is way better than law just sitting

8:49 there looking at complicated tax judgments as well." Yeah,

8:52 I wasn't as analytic as that.

8:54 In hindsight, yes, at the time I just said,

8:57 "this seems pretty good,", and frankly, the hours were shorter.

9:00 I mean, the one good thing about being a lawyer in those days is that the hours

9:05 were so long and sometimes there was a lot of drudgery associated with what you

9:10 had to do that almost any other job after that would be lighter and merrier

9:14 and would be a better lifestyle for a young

9:18 associate trying to climb the law firm ladder.

9:20 And so, when I went there, it looked better in a lot of different ways.

9:24 I didn't know if I'd be good at it, and it turned out it suited my personality.

9:34 You were 36 years at Goldman's J.

9:36 Aron, and it seems to me that you spent at least

9:39 the first half of that career trying to justify the J.

9:42 Aron operation to what was a very

9:45 well-established investment banking operation at Goldman Sachs.

9:47 You guys were always pushing against a glass-ceiling,

9:50 or the Goldman's guys were on a better floor,

9:52 and you guys were in a different building,

9:53 and you had to convince Goldman's that actually,

9:56 this was the way forward to become a bigger operation.

9:59 Well, there was a bit of a cultural difference between the firm J.

10:02 Aron that I joined, the relatively small commodity trading firm,

10:05 which consisted of a lot of people who were streety,

10:08 not all of them had been to university and it

10:11 was people who would kind of work their way up.

10:14 A good entry-level job at J.

10:17 Aron was to be the driver for one of the senior partners of the firm,

10:23 so that shows you what the kind of career path was in that firm.

10:27 Whereas Goldman Sachs was a very, very establishment kind of firm,

10:30 where people had graduated from all the Ivy League schools and that was

10:33 kind of the entry requirement to get a job at Goldman.

10:36 So, there was a little bit of upstairs downstairs about Goldman Sachs and J.

10:41 Aron.

10:41 Of course, you know,

10:42 I already had a chip on my shoulder and that kind of really reinforced it.

10:47 And so yes, there was a little bit of trying

10:50 to prove that we were good and frankly it didn't hurt us.

10:53 Some of these things that you think of as burdens and disadvantages

10:56 in the long run turn out to be advantages because we worked harder,

11:00 took a little less for granted, were much more curious about learning about

11:04 stuff because we didn't think we knew everything.

11:06 Were you successful sometimes in spite of yourself?

11:08 A little bit later on you had to take on 360-degree performance reviews,

11:12 and time and time again people would say that you were very combative,

11:18 you didn't always listen to them, you talked over- sounds a bit like myself

11:21 at work to be fair- but you talked over them.

11:24 Were you successful in spite of yourself sometimes?

11:27 I put in a review, this is a 360,

11:29 you know 20 different people, some report to you, some are over you,

11:33 comment on you and somehow, they all came up with 20 synonyms

11:37 for this guy really needs to change his behavior.

11:40 Tough.

11:41 I know people who are in very, very high senior places and I think boy,

11:46 that person must have been voted most likely

11:49 to succeed in kindergarten and every year since then.

11:51 And there are some people who are later bloomers and who

11:55 never thought themselves- and I was sort of in that latter category.

11:58 In my life I've met some very, very accomplished, very,

12:00 very smart people, but people throw the word genius around very, very easily.

12:05 I've met people who've worked hard, who've done well,

12:07 who had lucky opportunities and give them credit,

12:10 they took advantage of those opportunities, but they weren't geniuses.

12:13 They just applied themselves, they had their ears open,

12:16 they had curiosity about the environment around them,

12:19 and they saw things and they went through

12:22 little doors that other people wouldn't have seen, and that's a point to make,

12:26 that a lot of these opportunities are more accessible than you think.

12:30 If you think that someone can only get to this spot because

12:33 he's brilliant and genius and had this charmed life at every stage,

12:36 you kind of give up.

12:39 And so, part of this thing, an objective is,

12:43 that my career is not only relatable but accessible.

12:48 Statistically, not a lot of people are going to get those same kinds of breaks,

12:52 but you can go pretty far in this world

12:55 taking advantage of opportunities and working hard.

12:57 My own career in the city started very early on.

13:00 I had a great role model, a man you probably know Jeremy Isaacs,

13:03 who went on to Lehman’s of course, and he was a great role-model,

13:06 and I still speak to Jeremy and get advice off him to this day.

13:09 Who was the best of the best that you listened

13:12 to and used as a role model when you were at Goldman's J.

13:15 Aron?

13:15 Yes.

13:16 You know, and it's funny, little things make very important impressions.

13:19 So, going back to my law firm days when I first went to, I said earlier,

13:23 I never knew anybody who wore a suit.

13:26 I went to the first boss I had in my law firm,

13:29 this is the most useful thing possible, he told me how to dress better.

13:33 I didn't know that you put little tabs in your collars to keep your collar down.

13:39 He told you to go and buy a few Hermes ties.

13:41 Told me to buy these ties and not those ties.

13:43 Save your money.

13:44 No, don't buy ten of those ties.

13:46 Buy one or two of these.

13:47 You know, people take an interest in small ways

13:50 and those are the things that establish a good bond between people.

13:55 I'm sure he taught me things related to the law,

13:58 I probably would have learned those anyway.

14:00 I want to go to 1991.

14:01 Robert Maxwell's ringing you up.

14:03 One of the most important businessmen in the world.

14:05 "I want your advice, Lloyd", as well.

14:06 You got a little bit flattered by him, everyone got flattered by him.

14:10 Couple of months later, he's passed, whether he fell off his boat, no one knows.

14:15 Or pushed.

14:15 But he was a crook.

14:16 Right.

14:16 It turns out that Robert Maxwell was a crook.

14:19 What did you learn from that relationship?

14:20 You know, I learned- well, first of all,

14:23 you're exactly right I was kind of seduced,

14:26 But even if somebody told me I was seduced,

14:27 I'd have been flattered that he took the time to try to seduce me.

14:30 At that point, I was a fairly junior person in the foreign exchange world.

14:35 He was transacting, himself.

14:36 But a lot of people did in those days

14:41 involved in global markets because you know, currencies were very volatile,

14:45 and decisions about currencies were quite consequential to business.

14:48 And there was nothing that he did with me

14:51 that was illegal or should necessarily have raised a big flag.

14:55 but I realized that I was an unwitting instrument on his effort

14:59 to take money from his public company and move it to his private companies,

15:04 because he would do currency transactions and he'd give the back-office

15:07 payment terms that involved moving the money to a different source,

15:11 which he was entitled to do,

15:12 he was the CEO of both entities and he was authorized to do it.

15:16 But when the dust, when this all came out,

15:18 I realized, my god, I was so flattered by him,

15:21 by the fact that he was calling me

15:24 and that I was giving advice to the great man,

15:27 that I realized that as you grow up and you're in a position of influence,

15:31 or the ability to help people, you have to have a certain kind of reserve,

15:35 because you can't allow yourself to be flattered in that way,

15:39 you can't allow yourself to be manipulated and used.

15:41 And the temptation, by the way,

15:43 even among well-intended people who don't have fraud in their in their scope,

15:49 might get you to do things that you don't want to do,

15:53 and if you're a natural pleaser and so impressed

15:55 by your own magnificence because these people want to befriend you,

15:59 you'll do things that you shouldn't do.

16:02 And so, you learn in life, and I understand very senior people very often,

16:06 especially in a banking world where you make credit decisions and you can

16:10 finance someone or not finance them and it's really existential for their lives,

16:15 you have to have a certain kind of remoteness, and you can't be very,

16:20 very good friends and always want to please the people

16:23 you do business with, because you have to make again,

16:26 decisions that are in the best interest of the company

16:29 and the greater world and not necessarily in their interest.

16:33 Goldman slowly realized, got more and more partners on board,

16:36 that you just needed more capital.

16:37 You loved the culture.

16:38 It was culture versus capital at one point- that was how

16:41 it's framed by a lot of partners- but you needed more capital.

16:44 So, you became, you decided to IPO a portion of the company as well.

16:48 That made you a stunningly rich man, didn't it?

16:50 I think something in the region $90 million dollars.

16:52 Well, we maybe have different thresholds for what's stunning.

16:55 It certainly made me wealth- Well,

16:57 compared to where you are now Lloyd, I appreciate that, but...

16:59 It certainly made me a lot wealthier, but I wasn't stunned by it at the time.

17:03 So, the process to end the formal

17:06 partnership and become a listed company as well, that was very interesting.

17:10 Yes.

17:10 Tell me about that.

17:10 So, let me say, Goldman Sachs

17:12 really prized its culture as a private-partnership,

17:14 and it really made a difference.

17:16 Everyone was an owner of it, and owners are different than employees

17:21 because you feel entitled to information, you feel entitled to have influence.

17:24 If the senior partner wants to do something,

17:27 he really has to socialize and listen to comments,

17:30 because you're dealing with your fellow owners.

17:32 That makes sometimes processes are slower,

17:35 but it makes the organization much more stable,

17:37 and you know I think better in the long run.

17:41 So, people were very reluctant to give that up.

17:43 We thought it was a special advantage of the firm

17:46 and to this day I believe it was.

17:48 It was partly the opportunity to do more stuff with more capital.

17:52 But having survived some of those earlier crises,

17:55 partnership is another thing also.

17:57 It's impermanent capital compared to a corporation, which is permanent capital.

18:01 You keep your balance sheet, you keep your capital,

18:04 people can transact shares and get out of their position and leave the company,

18:08 but the capital stays in the company.

18:10 But what is fascinating about that It's too dangerous

18:13 to remain a private partnership And a lot of partners walked.

18:16 And I think this tells a lot about you, if I may say so.

18:19 I think you were stunningly wealthy by the way, and I think you knew it,

18:22 because you knew where you came from, you

18:24 never forgot East New York and Brooklyn as well.

18:26 But a lot of the partners thought,

18:27 I can do other things here, and a lot of them did.

18:29 They went into politics, you talk about, into all kinds of other things.

18:32 I think one of them went into coaching.

18:34 They bought sports teams.

18:35 Sports teams.

18:35 You stayed.

18:36 So, I think that does tell a lot about you and what drives you as well.

18:40 Can you just expand on that?

18:42 Well, yeah.

18:42 I mean that's the answer.

18:44 I just am wired.

18:45 I liked what I was doing.

18:48 You know people also left,

18:50 partly people left because they wanted to really to defend

18:54 their wealth that they had acquired, and they could.

18:57 Look we all suffer.

18:58 You know we all go to work every day,

19:01 and boss does something that annoys us and guess what,

19:04 you go home, you complain to your spouse or, and then

19:07 you come in the next day and you sort things out.

19:10 But when you're well to do, and you sort of get irritated at your boss,

19:14 the next day you go in and you quit, because you can.

19:17 Keeping people at that point was a little bit different.

19:20 People had leapfrogged in wealth.

19:21 People had previous notions of what was wealthy and somehow,

19:25 they leap way beyond that, and so some people decided to leave,

19:29 they were probably making the right decision for themselves.

19:31 It wouldn't have been the right decision for me.

19:32 What would I have done for the next 30 years?

19:35 By the way, in old Goldman,

19:37 it was always figured that people would stay, be a partner of the firm,

19:41 and then leave when you still had more gas in the tank,

19:45 more chapters left, if I mix a metaphor, more chapters left to perform.

19:49 Well, that's how with your public speaking as well,

19:51 you never want to speak too long, you want to leave them wanting more.

19:53 Yes, always leave them wanting more

19:54 and you make the opportunity for someone else.

19:55 But people usually left the firm in their middle 50s and then

19:59 they did something else and every-once-in-a-while

20:01 somebody would stay too long, like me.

20:04 When you became partner of the firm,

20:06 the person that inducted you into the partnership would sit there and say,

20:09 "This is your expectations of you.

20:11 This is what you have to do.

20:12 This is your new role and your new station and a set of responsibilities,

20:16 a role model for others." And he'd say, you know,

20:19 the expectation is you should organize your life,

20:22 so if and when they write an obituary about you,

20:26 no more than three or four paragraphs are about Goldman.

20:28 You should do other things.

20:29 By the way, you should do other things while you're working at Goldman.

20:32 You should be philanthropic.

20:33 You should be on the boards of certain charities.

20:36 And you know, your career should end at a point

20:38 in which you still do other things afterwards.

20:42 And that was a very important part of the Goldman ethos.

20:48 In 2006, you became the CEO.

20:50 You took over from Hank Paulson.

20:52 You became his heir apparent.

20:53 You were like the COO, you liked being the COO because you didn't have

20:56 the same legal liabilities on the result statements as well.

20:59 When did you make the decision, I'm going to be the CEO?

21:02 I became the COO, but working for somebody who was still youngish

21:07 and still was going to stay in the firm for a longer time,

21:11 short of being hit by a bus or something else,

21:14 and then guess what happened, as happened to so many of my predecessors,

21:17 he got tapped to be Secretary of Treasury,

21:20 effectively finance minister of the country.

21:21 So, prior to that weekend when he discussed with me that he was taking the job,

21:26 I thought I would probably retire as his number two.

21:30 You still didn't think you were going to be number one?

21:33 I didn't think I was.

21:34 I knew if there was a call for somebody else to replace him,

21:38 it would probably be me at that point,

21:40 but he was young enough to do that job for a longer time,

21:45 that would make me older than I should be to start in that role,

21:49 and instead of working another ten years in that job, he left that job.

21:52 So, I ended up being CEO of Goldman Sachs for almost 13 years.

21:56 There's a great quote, earlier quote.

21:57 If I knew I was going to go so high in the firm,

22:00 I would have been a lot nicer to people I met along the way.

22:03 It would have saved a lot of time making up to them later on.

22:06 Oh, sure.

22:07 You had to change your personality a little bit as you got higher up.

22:10 As I got more senior, again, you had a chip on your shoulder,

22:13 a certain amount of resentment of people who acted haughtier,

22:16 and then we started to outperform and, you know,

22:20 the recognition of that outperformance lagged the actual outperformance,

22:24 and then at times I had to remind them of, you know, what was going on.

22:28 I could be sarcastic.

22:29 I was never much of a screamer, but I was very,

22:32 very caustic and you know it was very entertaining for a lot of people around,

22:38 but not necessarily for the object of my sarcasm.

22:41 There's a lot of Lloyd-isms out there.

22:43 Sorry I know this is quote-a-rama.

22:45 "I am listening"- This is you in management committees.

22:47 "I am listening.

22:48 I just hear faster than you talk." I mean no wonder people, no wonder people...

22:53 Yes.

22:53 Somebody would say, why don't you let me finish before you disagree

22:56 with me and I said look you haven't said it, but I hear faster.

23:00 I've already heard you and hear...

23:01 No, no, it was difficult.

23:02 And again, I think we all get our personalities are stamped at very young ages.

23:07 You don't become a completely different person,

23:09 but you can kind of lean against character, which I learned to do.

23:14 And the fact of the matter is, I was tough on people and the people I

23:19 was tough on weren't immediately helpful to me thereafter,

23:22 and why would they be and shouldn't be.

23:25 I learned to be more self-deprecating.

23:27 I learned I still had perspective, I still had a sense of humor,

23:31 but I would stop myself before I made somebody else feel bad about it.

23:35 And so, I think I got a lot more better,

23:38 but I think also my basic character was, I was very institutionally oriented.

23:42 You know, I grew up and I wasn't part of anything,

23:45 I felt remote when I went to my fine university, in my early stages in the firm,

23:51 and when I sort of felt part of a big important institution,

23:54 I kind of hugged it, I kind of like it.

23:57 There are some people who are geared

23:59 to be entrepreneurial and want to be by themselves.

24:02 They say they can't work for someone,

24:03 and they don't want to have partners where they have to.

24:06 I wasn't that way.

24:07 I liked being affiliated with an institution,

24:10 and to work well in an institution, you have to be a good teammate,

24:14 to be a good teammate, you know, you have to, not only take criticism,

24:16 but you have to be a little softer when you give it.

24:19 And over time, I learned that.

24:21 So I said, really, I mean I made a good joke out of it,

24:24 but it was actually true,

24:25 I had to make peace with a lot of people who on my way up and their way up,

24:33 didn't enjoy my sarcasm as much as I enjoyed delivering it,

24:37 and I had to make peace with them, and they were right and I was wrong.

24:41 But what went well in Brooklyn and East New York when you're growing up,

24:46 and then worked really well on a trading floor as well,

24:50 doesn't necessarily work in the same way when you're

24:53 talking to top board members or politicians or blue bloods.

24:56 You kind of had to adapt quite a lot, didn't you?

25:00 You adapt, but look, at the end of the day,

25:02 I think what's prized most in the world,

25:03 whether people acknowledge it or not, is you know, authenticity.

25:06 I mean I know who I am.

25:09 It helps to have a high position, because now I walk into a room and people,

25:14 I mean this is shocking to me,

25:16 people are sometimes intimidated of me before they meet me.

25:19 When you're CEO you get taken around to people,

25:21 and somebody at Goldman would say "oh this person really thinks very,

25:24 very highly of you and is looking forward to meeting me",

25:28 and I'd say gosh if they think really highly of me why ever would I meet them?

25:33 You can never be radically different- I would lean against certain tendencies.

25:37 Lean against tendency to be, you know, sarcastic or snarky.

25:41 At some point you realize, why would I have a chip on my shoulder at this point?

25:45 I'm a graduate of excellent schools.

25:47 I've been the head of a very influential firm.

25:50 I've mingled with a lot of very important-

25:53 I think it's time to set that chip aside.

25:56 I don't know if I agree.

25:57 I think if you're authentic and that's who you are, then that's who you are.

26:00 But even, you have to acknowledge,

26:01 even in your, you know also to be authentic is to acknowledge reality.

26:05 And at some point, I remember when I was growing up, we were the recipients.

26:09 my family was generally the recipients of other people's philanthropy.

26:13 I went to my schools, you know I got free lunch in school.

26:17 My college applications were free because our income was below a certain level.

26:21 We lived in public-housing, so rents were very low,

26:23 and you know, that sticks with you.

26:25 And then one day, you know, you realize, my goodness,

26:27 way before I was a partner of Goldman Sachs, you know,

26:31 at some point, that's kind of, not only don't I need other people's help,

26:35 but I should be giving help.

26:37 Lloyd, let me spend a bit of time talking about the GFC,

26:40 the Great Financial Crisis.

26:41 Tell me a little bit about what good decisions you made in the face

26:45 of what was an existential threat for the financial system and, dare I say it,

26:49 for the global economy.

26:50 Well, the best set of decisions were really baked in, and in fact

26:54 it was the earlier crisis that put us in a position,

26:58 because we became very, very,

26:59 very aggressive risk- we were risk managers and processes.

27:03 So, we were always very conscious of risk.

27:06 You know as Goldman's we have a reputation as being risktakers and doing

27:10 well in good times and not suffering as much in bad times.

27:14 But we instituted a lot of processes.

27:17 The most important one was we marked our securities,

27:20 our balance sheet to mark to market,

27:24 very rigorously, very religiously, very often.

27:27 And so other people didn't.

27:29 We would mark to market AAA securities,

27:32 securities that were always presumed to be

27:34 worth a hundred cents on the dollar forever,

27:37 but we would not only market to market,

27:39 we would test it in the market by having people go out and sell them,

27:42 and seeing if there was truly a market to it as opposed

27:45 to marking things to models or marking things to analogies to other instruments.

27:50 And that religious marking to market all the time,

27:55 gave us an early warning sign that something was amiss in the world.

27:59 And when the financial crisis started to go and it

28:03 affected kind of the weakest part of the mortgage market,

28:06 subprime, even people like Ben Bernanke

28:09 and other great central bankers said well,

28:12 this is a temporary phenomenon, transient.

28:15 I agreed with that, that this didn't look like it

28:17 would become as big as we know it ultimately became,

28:19 but we said something is going on here, let's bring our risk down,

28:25 let's stay closer to home, was the language that we always used.

28:28 So, traders and risktakers and market makers continued to make markers.

28:33 If clients wanted to buy something, we sold it to them.

28:36 If they wanted to sell to us, we bought from them.

28:38 Sometimes we'd be long, sometimes we'd be short,

28:41 these kinds of instruments, but we kept it bounded within a very,

28:45 a tighter range than we normally would,

28:47 because we just saw that things were in flux

28:49 even though we didn't know what the outcome was.

28:51 So, you were well prepared.

28:52 Can you think of a decision, a pivotal decision you made in the heat,

28:55 that actually was the best decision you made in that crisis?

28:58 We had to be very, you know, fleet of foot.

29:01 There were things happening all the time.

29:03 Every weekend the government was putting in a new protocol,

29:06 a new set of rules and guidelines.

29:09 And so incrementally, we were always preparing, trying to stay ahead of it.

29:14 What could happen next?

29:15 What could, how could things get worse?

29:17 And we had rooms of people who were

29:20 going out and kind of wargaming the next scenario.

29:24 We didn't always get it right, but it made us much more prepared,

29:27 to the point where people thought we were successful in anticipating things,

29:32 we were just very good contingency planners.

29:35 Another thing that we did that was, well I wouldn't,

29:38 I don't know whether you call this a decision,

29:40 really what I needed to do is get everybody to do their jobs,

29:43 and not to be kind of frozen by what was going on.

29:47 You turn on the TV, and it was like they were watching,

29:51 you know it was like a sporting event that was going badly.

29:54 Yeah.

29:54 It's interesting you should talk about sport,

29:57 because a great cricketer or even a baseball hitter,

30:00 they see the ball large and they see it slow when they're on form as well.

30:04 How did you feel in the depths of this crisis.

30:06 Did you feel a sense of calm?

30:08 I mean I was as nervous and as rattled as anyone,

30:11 but I didn't have the luxury of being able to perform that way.

30:14 You know, I think of an analogy, you're on an airplane and the flight

30:19 attendant you know is having a beatific smile.

30:21 Now I'm thinking, I look at that person I'm saying, is she rattled,

30:26 now I don't mind turbulence but I'm very

30:28 carefully attuned to the sounds of the engine, as long as those sound the same.

30:32 But every once in a while it sounds a little different to me,

30:34 and I look at her face or his face, and I go,

30:37 I mean if they look terrified, I would be terrified,

30:40 but instead it's that beatific smile and you know,

30:44 your position requires it, and so you do that.

30:48 I've never been in combat or in war, but I imagine,

30:51 you know when things are going off, you know,

30:54 your sense of responsibility kind of displaces

30:59 your anxieties and fears, in a way,

31:02 if you're wired that way, and I was kind of wired that way.

31:05 And so, keeping the firm on, I wouldn't say it was an even keel in that period,

31:10 but as even a keel as could be accomplished,

31:13 was a very, very important thing to do.

31:15 Lloyd Blankfein, it's been an honor and a privilege.

31:17 I've wanted to chat for you for years

31:18 and that's a big part of my career pluses now.

31:20 So, thank you very much indeed.

31:22 Steve, thank you.

31:22 I enjoyed it, wish it were longer.

31:23 Thank you, sir.

31:24 Thank you.

31:26 What could I learn from Lloyd Blankfein in this interview?

31:29 A legendary Wall Street figure.

31:31 His career has been well documented,

31:33 not least by himself in his extensive biography.

31:36 He's divisive.

31:37 Some think he's the ultimate example of fat cat Wall Street bankers.

31:41 Others laud him, say, look what this man did in the Great Financial Crisis,

31:45 negotiating Goldman's and the financial system to some form of safety.

31:50 What I really learnt is he's a street fighter,

31:52 a man who came from a blue-collar,

31:54 tough, working background, the projects in Brooklyn,

31:57 dragged himself up through Harvard, Harvard Law School, J Aron,

32:02 Goldman Sachs, and perhaps did it by sheer force of will.

32:06 He saw himself as an outsider.

32:08 He saw himself almost with a chip on his shoulder fighting against the system.

32:12 It's an amazing story of someone who made good.

32:16 It is a very relatable story for many people.

32:19 Thank you very much indeed for joining

32:21 me on the show we call Executive Decisions.

32:23 I would love to hear your feedback.

32:25 Please drop your thoughts in the comments,

32:27 or a review and please hit that follow or subscribe button.

32:31 On the next episode, I'll be speaking to the CEO of Reed Group, James Reed.

32:36 But I think that's a vital part of being an entrepreneur,

32:39 you have to keep trying things,

32:40 and the worst decision would be to stop trying things.

32:43 I'm looking forward to it.

32:45 We'll see you then.