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Goldman Sachs chief executive and president David Solomon has received bad press -- a lot of bad news.
Bank directors of more than five years are about to celebrate being accused of mismanagement and their ability to manage the company called into question.
His potty mouth, interest in DJing, lack of cooperation with other executives, insistence on returning to the office, and lack of Goldman Sachs online banking Marcus lead his colleagues to ask about his future at the firm. .
Salomon is accountable to shareholders, bank managers and fundamentals. Although Goldman Sachs (GS) shares are down 5% this year, they are still up nearly 40% since taking over in 2018. However, the CEO will discuss the internal debate and the new press release next month.
Goldman Sachs did not respond to a request for comment for this story.
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So what's going on here? Before Bell interviewed Jeffrey Sonnenfeld, he was director of the Yale School of Management CEO Leadership Institute, a nonprofit education and research focused on CEO leadership and corporate leadership organization to find out.
These questions have been edited for clarity and length.
Before the bell: What happened to Goldman Sachs? Is this a big management problem or a financial problem?
Jeffrey Sonnenfeld: There are many reasons for this. First off, we're past the Lionhead era, and now the pendulum has swung back to the point where we'll soon despise them. For CEOs, there is more focus on short-term performance than long-term change. But if you look at David Solomon's five years, the company grew 50% almost every year.
Goldman's long-term mixed culture is different. It is one of the oldest and longest-running companies in American history. Most of the people who still work there come from a collaborative culture, a collaborative culture. Now that it is a public company, decisions need to be made quickly. Now they have this cultural problem.
In unity, in unity, in complete unity, this is not a supplement in the hearts of the people. So you're going to see a lot of criticism of what the leaders are doing there, especially if the leaders need to make quick decisions because they have to be accountable to the owners and shareholders.
Former Goldman Sachs CEO Lloyd Blankfein is reportedly not happy with the work David Solomon has done and the help he has provided. What do you think about this?
Another thing about the character of Lloyd [Blankfein] that is still loved and popular is that he has a lot of loyal people and supporters who pour out all their grievances to you. It was hard, but Lloyd was a smart guy and he knew some of what he said was true.
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But he still stood up for David Solomon last week. He was criticized when Lloyd arrived, and Lloyd proved to be one of the brightest, brightest, most knowledgeable men in finance who ever lived, but he was no beginner.
What's wrong with Marcus?
Trader hangs up because Marcus is absent. But the deal fell through miserably because no one could have foreseen current interest rates. This eliminates the need for them to work with Marcus on the consumer side.
Look, construction companies made mistakes. One of the biggest and best acquisitions in Microsoft history was Nokia. [In 2015, Microsoft lost $7.8 billion on its acquisition of Nokia and ended its mobile phone business. ] Microsoft succeeded.
These companies have learned from some of the mistakes they made. All great leaders make big mistakes. For Marcus, Solomon took the idea and put it in a different economic context. I think some complaints are understandable, but it's not a fatal error.
Most of the charges against Solomon have to do with his brutal nature. I wonder, is he in trouble for not acting as a prophet of political correctness?
David [Solomon] was not acting as an emissary, he was very conspicuous. So it's not the same as the old Union-era gold standard. He doesn't cheat, he's honest. There's a brutal side to him, he's single, and he creates differences between people. The teacher may not suffer on the road. You need to be careful when holding senior positions in the public or private sector. I thought it could be different, and it wasn't too bad.
So, is this a clash between two different cultures at Goldman Sachs and little talk of a CEO change?
There is definitely a cultural difference here, because Goldman executives are always part of a mixed generation; he was there before the firm left. Young kids and some millennials have embraced co-working culture.
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