If I Was Coaching Goldman’s Lloyd Blankfein
One of the big responsibilities of an executive coach is to help the client step back to a broader perspective and observe how what he’s doing connects or disconnects with the results he’s trying to get. It’s helping the client move, as Harvard’s Ron Heifetz would say, off the dance floor and onto the balcony. I don’t know for sure, but based on recent reporting, I’d have to guess that no one is providing that kind of support to Lloyd Blankfein, the CEO of Goldman Sachs. As the Financial Times thoroughly summarized this week, Goldman finds itself the subject of an unexpected shift from headquarters of the masters of the universe to object of universal scorn and anger over the $17 billion bonus pool it has set aside one year after taking billions of dollars in Federal assistance. Not content to fly under the radar screen (which wasn’t really possible in the first place), Goldman CEO Blankfein recently gave a long interview to the Sunday Times of London in which he said, among other interesting things, that he’s just a simple banker, “doing God’s work.”
Talk about pouring gasoline on a fire. If I was coaching Lloyd Blankfein, there are three basic questions I’d want to ask him to help him reframe his perspective and better align his actions with the results required in this new situation. Ideally, we would have talked through these questions about a year ago. It may too late for them to do any good now, but here they are:
What’s Changed? The point of this question would be to encourage him to pull the lens back and assess what’s changed in the past year and a half and how those changes have put Goldman in uncharted terrain. Clearly, Blankfein and everyone at Goldman are at the high end of the scale in terms of IQ points. They are smart people and could, at the drop of a hat, give a graduate level seminar about what’s changed in the global financial markets. In a coaching conversation on what’s changed, I’d want Blankfein to go beyond the IQ points and look at and reflect on what’s changed in what the Germans call the zeitgeist (i.e. the spirit of the time). I’d also want him to look at what’s changed around the impact of his words and actions. The combination of an unsettled and anxious zeitgeist with the internet’s capacity to exponentially magnify the impact of one’s comments can lead to explosive situations for leaders as visible as Blankfein.
What’s Important in the Long Run? The FT and Sunday Times articles both make it clear that the driving principle at Goldman over the years has been to maximize the capacity to make money in the most productive way possible. The company has done that successfully over a long time by managing their risk better than any other firm. What seems to have been overlooked in the risk management process at Goldman is reputational risk. The principle of maximizing the money appears to have caused Blankfein and the leadership at Goldman to overlook the long term risk to the firm’s reputation and its capacity to be profitable and productive over the long run. Going for the short term payouts may well lead to a killing the goose that lays the golden eggs situation.
You may have noticed that both of these questions are open ended questions that start with the word what. That’s a pretty standard technique of coaches. We like to use “what questions” because they open up thinking and help our clients think outside the box. Sometimes I joke that the only bad “what question” is…
What in the Hell Were You Thinking? Sure, it’s a little rude, but it seems appropriate in this case. My guess is that if he thought about it, Blankfein would realize that he’s been thinking within the terms of the old environment rather than the new world that he and his firm are in. As I said earlier, it may be too late for any of these three questions to do much good. Still, there may be a chance. Sooner or later, leaders screw something up. Some of those screw ups are more public than others and Blankfein has had more than his share of public ones lately. After making a big mistake, it actually can be productive to step back and ask,“What in the hell was I thinking?” If you can identify the thought process that led to the mistake(s), you have a reasonable chance of making adjustments in your thinking that will serve you and your organization better in the future. In spite of all the bad press they’ve received and bad decisions they’ve made lately, Goldman Sachs plays an important role in the global economy. For their sake and ours, I hope Lloyd Blankfein and his leadership team take some time soon to step back and sort through some perspective checking questions.