Lloyd Blankfein, CEO of Goldman Sachs during the financial crisis of 2008, was one of the corporate leaders Senator Carl Levin mercilessly interrogated at Senate committee hearings. My 2019 book Negotiating Business Narratives, coauthored with my estimable spouse Beth Herst, has a chapter on financial sector narratives titled “A Good Dose of Outrage” that pays considerable attention to the crisis. It should come as no surprise that most of the texts we analyze instantiate bad-news fables like the corporate nightmare, the corporate rip-off, and the inside job. I have used the 2015 film The Big Short in recent iterations of my management and narrative course. Therefore, Lloyd Blankfein’s recent autobiography Streetwise: Getting to and Through Goldman Sachs immediately captured my attention.

Though the title indicates Blankfein’s narrative is about his illustrious career at Goldman Sachs, the book is also an autobiography, with chapters about his early life, education at Harvard College and Harvard Law, his bout with lymphoma in later life, and his retirement.

A Heroic Narrative?

Let’s begin with the financial crisis. Blankfein’s account is at times minute-by-minute and blends a discussion of the rapidly unfolding events (Lehman Brothers bankruptcy, crisis meetings at the US Treasury, Warren Buffet’s well publicized loan to Goldman) with insight into Goldman’s strategy in dealing with the crisis. Goldman did better than the other major investment banks. Blankfein attributes it to practices such as keeping tight control of risk by being neither a big short nor a big long on mortgages and monitoring the entire firm’s risk exposure by valuing (marking to market) all its assets on a daily basis. The crisis happened very early in Blankfein’s tenure as CEO and he feels that, to cope with it, he had to improve his skills at listening to, supporting and communicating with his colleagues. For the latter, he began sending voice-mail messages about corporate strategy on a near-daily basis.

In the book, Blankfein responds to Goldman’s many critics during that period. In his response to Senator Levin, he argues that Goldman was not betting against its clients, but serving as a market-maker for experienced and knowledgeable parties to bet against one another about the subprime mortgage market.

In terms of Borins and Herst’s analysis, this combination of an organization surviving a crisis and its leader becoming more capable is clearly a heroic narrative. Goldman’s survival relatively unscathed contrasts with firms that were bailed out by the government (Citibank and AIG), that were merged with stronger firms (Merrill Lynch), or that didn’t survive (Lehman Brothers). Put differently, there is a reason Blankfein has written about the crisis, while peers such as Richard Fuld (CEO of Lehman Brothers) and John Thain (CEO of Merrill Lynch) have stayed silent.

In addition to the crisis, Blankfein devotes considerable effort to describing the origins and current embodiment of Goldman Sach’s culture: preserving the mentality of a partnership in which all partners are deeply invested (literally if not figuratively) in the success of the firm after it becomes a publicly-trading corporation, hiring top graduates from elite universities, cultivating a network of alumni who have gone on to senior positions in other firms and government (for example Mark Carney), and both a corporate philanthropy program and support for personal philanthropy by partners.

A Small College near Boston

Though Blankfein’s experience at Goldman Sachs is the core of the story, I found other aspects particularly resonant. Blankfein entered Harvard College in 1971, the year I graduated. Like me, he was first-generation Harvard. And like me, he majored in the elite Social Studies program. I empathize with his discussion of how Harvard’s dense network of extracurricular activities was opaque to those who were first generation but readily comprehensible to those who were legacies or who had gone to prep schools. Blankfein focused on a career in law and regretted that he didn’t take advantage of the diversity of the undergraduate curriculum. I decided against a career in law and chose a wide variety of courses that were relevant to the career I envisioned as an academic.

I agree completely with Blankfein’s conclusion that an undergraduate liberal arts education remains of enormous value in broadening one’s understanding of the world and that career-oriented technical training should be left for the next stage of one’s education. I think the Harvard College that Blankfein and I experienced fifty years ago is a better institution than its current incarnation, in which grade inflation has become a major problem and students are intensely focused on launching their careers in elite firms such as, paradoxically, Goldman Sachs.

Blankfein provides an emotionally moving perspective on lymphoma a life-threatening illness that emerged suddenly. In addition to the medical system, he relied on the support of his family and his colleagues at Goldman Sachs, who helped him perform his corporate responsibilities. Blankfein emerges from the episode with gratitude towards physicians, family, and colleagues; wariness about whether he will have a recurrence (“there’s always a bit of a cloud over my head”), and deeper appreciation of each birthday. Having survived my own recent health crisis involving heart surgery, I deeply sympathize with Blankfein.

To conclude, Streetwise is a well-written account of a stellar personal career in finance and discussion of the culture and strategy of Goldman Sachs, the firm in which that career unfolded. It is aimed more at the business book market than the best-seller market (in part because it is occasionally technical in its discussion of financial sector activities such as trading and risk management). It contains leadership and strategy lessons that should be of interest to many in the business community, especially the financial sector. One of my tests of a book’s value is whether I would assign it in class. It passes, because when I teach management and narrative this fall, I will use it to complement The Big Short. I found Blankfein’s mixture of personal narrative and corporate history and strategy fascinating and I strongly recommend it.