Goldman vice-chair Kaplan memo warns of MD pitfalls, offers leadership advice

Rob Kaplan, vice-chair of Goldman Sachs, warned that reaching the managing director rank changes oversight and can expose personal weaknesses. Kaplan argued that soliciting feedback is pointless if leaders then “ask for feedback, then rebut it, and shut it down as soon as it arrives,” and he framed the corrective approach as “Regulation by subordinates.”

Kaplan spelled out a concrete routine for senior bankers: MDs should “learn to cultivate your subordinates as your coaches,” and he recommended that MDs conduct three or four “skip-level” meetings a week, gaining insights on personal deficiencies from vice presidents, associates and analysts. The prescription places regular, direct contact with junior staff at the center of senior development rather than formal reviews or upward ratings alone.

The column highlighting Kaplan’s remarks singled out the behavioral obstacles most likely to blunt that approach at the top. It identified two common blind spots among senior investment bankers as being “bad at listening to other people” and “thin-skinned and massive ego,” and added the editorial observation: “It’s tough at the top.” Those traits, Kaplan’s advice implies, make “Regulation by subordinates” difficult but especially necessary for MDs aiming to lead effectively.

The same column carried a separate item about a lucrative transaction described as a “kangaroo deal” that created “generational wealth” for an individual referred to only as Grounds. The piece noted that “most of the original staff of Barrenjoey were poached from UBS Australia in the first place, and they will also be cashing out on their shares,” and added the parenthetical: “(So will Barclays, which took a stake).”

That M&A context was also the occasion for a wider observation on strategy: “Buying an M&A boutique is something of a leap of faith - it’s one situation where you can be absolutely sure that the other side’s bankers are smarter and more motivated than yours are. So people only tend to do it when they are very confident indeed about the revenue outlook.” The juxtaposition of Kaplan’s leadership advice with the Barrenjoey transaction underscores two pressures facing senior bankers: managing people upstream while executing deals downstream.

For Goldman’s MDs, Kaplan’s practical mandate is clear and measurable: stop reflexively rebutting feedback and set aside time for three or four skip-level conversations a week with vice presidents, associates and analysts to surface blind spots. If those meetings are followed, the vice-chair’s remedy could shift accountability inward at a rank where oversight patterns and personal faults often collide.