fosters a more rigid tone of accountability. Underpinning the strategy
Solomon is bringing to Goldman Sachs now is a stricter lens for perfor-
mance evaluation—a metrics-based system that he piloted in the decade
he ran the investment banking division. There, he’d receive statistical
reports on such factors that reflected priorities both traditional—such as
the fees each banker collected—and personal, like which ones violated
his rule against making junior analysts work on Saturdays. In year-end
reviews, he surprised some people by asking them to justify granular
choices. A fiscal disciplinarian, he unseated some managers whose pay
ballooned out of whack and replaced them with cheaper people; besides
layoffs, past employees say getting “zeroed” at bonus season was a signal
to start job-hunting. At the same time, he demanded loyalty, dismiss-
ing young analysts who were caught accepting their next job elsewhere
before their Goldman contract was up. Solomon felt it was a conflict
of interest. Of his philosophy, he says, “You have to set a culture where
discipline matters, and people make hard decisions.”
The ultimate manifestation of Solomon’s method is the way he set out
to tackle Goldman’s gender gap. Concluding that the problem began at
the bottom, Solomon instructed his investment bankers to hire half-
female analyst classes starting in 2017, then expanded the mandate to
all new recruits. Bankers received no bonus points when they increased
the share of women from roughly 40% to as much as 49%. “Like, doing
almost well enough doesn’t count,” Lemkau recalls. “That is quintes-
sential David.” The banking division’s analysts that started this year are
the firm’s first to achieve gender parity; firm-wide, Goldman expects
its 2020 crop to include more women than men. “He is really breaking
glass,” Dina Powell, a Goldman partner and former White House adviser,
said at Fortune’s Most Powerful Women Summit in October.
Indeed, several colleagues use the phrase “breaking glass” to describe
Solomon’s approach—often in the sense of someone who set upon
Goldman’s old ways as though he was rifling through Grandma’s an-
tiques to decide what to pawn and what to toss. His first day as CEO,
he put out a memo aimed at bulldozing the territorial silos in which
the firm was organized: Now, there’d be just “One Goldman Sachs,”
Solomon wrote. People would be compensated more for bringing in
business anywhere in the firm, regardless of where they sat. Within
minutes of the email hitting inboxes, says Alison Mass, chairman of the
investment banking division, she had “50 calls from random people
around the firm,” including back-office workers, with ideas to sell her
clients. “It was literally like he turned a key and unlocked a door and
let everyone out,” Mass says.
Next, Solomon turned Goldman’s investment banking playbook on
If you need someone to tell
you you did a good job, one of
Solomon’s deputies advised a
colleague, “Go hire somebody
to do that for you. ”
INVES T OR ’ S GUIDE 2020
OUTFOX
THE
WOLVES
OF
WALL
STREET.
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