So here I was with an offer letter from Columbia, no job (I quit) and no money to cover my Ivy League business school tuitions.
Back in 1998 these were days where your email account only caught a handful of emails every day, unlike the raging horde of spam that lands every morning in my outlook folder. Which meant that the violent reaction that we expect today to spam was rare; most strangers would send a polite response back to your query about an opportunity for an out of work associate actuary.
Inspired by the hope that my impeccable credentials would generate offer letters like there is no tomorrow I sent out 600 to 800 emails to anyone that I could think of as a possible employer. By the time I hit May of 1998 I had exactly one conversation going on with a firm of consulting actuaries in Florida (Hi Gary) and a stack of thank-you-for-your-interest-but-no-thank-you cards from the leading firms of this world. Then out of the blue, one fine day in July I get a crisp high end envelope from Goldman (surprising because I didn’t write to them) with a sweet note inside by a VP in London congratulating me on the Columbia offer and informing me of the Fall Associate program at Goldman for students starting their MBA in January term. I was asked to connect with the team in London if I thought Goldman in London would be an interesting side trip on my way to school in New York.
I picked up the phone and called them back.
How I got into Goldman and how I fared in the interview process is a separate series of posts. What is relevant now however is the contrast I found at Goldman, the Investment Bank and the local consulting firm with accounting roots that I had spent the last five years at! Goldman was rich, classy and a true meritocracy. You were in because you were selected. You were selected because you belonged. You belonged because you were sharp, smart, on your way to being successful and at the same time well grounded (not humble but not arrogant) and clear about why you wanted to work at Goldman Sachs. And the reason why you wanted to belong was that a few years at Goldman really made it worth your while financially and professionally. Unlike all the horror stories I had heard about working hours at Investment Banks, the desk I worked at in London was fairly respectable. We started at 8 am sharp; we were done by 6, 6:30 at the latest. There was no issue about compensation – they understood felt fair pay. There weren’t any issues about work because for you to survive your work had to contribute. No contribution, no future. Loyalty, history, allegiances went only so far and certainly not as far as they did during my consulting years.
While my fall internship only lasted four months, it taught me a great deal about workplace motivation, workplace environment, packaging and presenting a premium product and brand. It also opened my eyes to the level of profitability possible in a business and what that meant in terms of compensation and benefits for your employees.
It came down to a simple choice. In the consulting world in my pre Goldman life we always did work at the margin at marginal rates. The rationale was to make sure that we covered our overheads and our costs. And if that meant that we picked up marginal work to make payroll, we did. Bad pricing decisions were blamed on marginal work. Unprofitable business models were dumped on marginal work. The quality of talent (or its absence was blamed also on marginal work). In general we sucked because we did marginal work and we couldn’t improve because we were fighting so many fires on account of our marginal contracts that there was no room for thought, action, self improvement or growth. Long live marginal work.
Goldman on the other hand was a focused, well oiled machine that did a few things exceedingly well. One of them happened to be making money in financial markets. On every transaction there was absolute clarity about where fees and income would come from. And there was no concept of working on the margin. You transaction had to carry it weight because if it didn’t in the end it would directly reflect on your paycheck.
My personal future career was now very well defined in my mind. Anything marginal was out. A broad based shot gun consulting business was out. Financial services was in; focus was in; felt fair pay and compensation was hot. If I were to build an organization at some point in life, the Goldman model was far superior to anything the consulting world had to offer.
That fatal flaw in this analysis obviously was that while there was a lot to the Goldman story, a part of this was also due to the socio-economic and cultural difference between a first world job and a third world job. The consulting practice back home was in the process of being born and polished. Compared to Goldman’s hundred year history they were less than twelve years old. Compared to Goldman’s well established markets and products they were still in the process of convincing clients that it was more productive and efficient for an outsourced expert to do “a” job compared to a clueless in house resource. And that they should pay their bills on time because without that payment we couldn’t pay our bills on time.
Having said that there was still a distinct difference in mindsets between the two firms. Goldman worked and operated like a world class organization destined for greatness. While at some point in time we would have wanted to be a world class organization, the baggage created by some of the compromises we had made left no doubt in my mind that the firm that I had just left would have to kill a few people to get back on track. Short of cold blooded murder it would remain a consulting firm with accounting roots. And maybe that was a destiny that they were comfortable with.