Inside the rise of Stephanie Cohen, the Goldman Sachs dealmaker leading a make-or-break push to take on Main Street
- Stephanie Cohen, cohead of Goldman’s consumer and wealth group, is the only woman heading one of the bank’s primary business divisions.
- She is a key architect of the bank’s ambitious consumer strategy, which involves partnerships with high-profile consumer brands.
- Insiders told us what’s at stake for her growing group, and what it could mean for Cohen’s future.
- Visit Business Insider’s homepage for more stories.
When Adena Friedman, the CEO of Nasdaq, hosted a dozen executives for dinner at her home in June 2018, it marked the first encounter for one of Wall Street’s most senior women and another up-and-comer.
Stephanie Cohen, then a chief strategy officer at Goldman Sachs, impressed Friedman with her penchant for bringing multiple perspectives to bear on a conversation.
“She’s witty and funny. She’s incredibly smart. And she’s what I call a three-dimensional thinker,” Friedman told Insider. “So it’s just a lot of fun.”
Cohen is now a formidable Wall Street figure in her own right. Six weeks after meeting Friedman, Cohen became the youngest person to join Goldman’s management committee. Last November, she and Tucker York, credited with building the bank’s private wealth business, were handed oversight of Goldman’s consumer and wealth-management division, the home of grand ambitions to go toe to toe with JPMorgan in consumer banking.
The appointment made her the lone woman running one of Goldman’s business divisions — and only the second to ever do so — and entered her into the discussion as a CEO candidate. It also put her right in the middle of a historical pivot for Goldman Sachs, which has ignored retail customers in favor of institutional clients for much of its 150-year history. (One former CFO kept a toaster in his office to warn against retail-banking gimmicks.)
Goldman now finds itself carving a path with a direct-to-consumer digital bank and a broad effort to give retailers, automakers, and other nonbanks the tools to offer their own banking products. And yet investors continue to discount the effort, assigning it little to no value in their calculation of the future share price.
Changing those opinions will be a huge mark of success for Cohen, who fancies herself something of a change agent, and York, a 35-year Goldman lifer less inclined to rock the boat. But falling short may mean a depressed stock price and knocking Cohen off a course that’s quickly propelled her into the rarified air of Goldman’s executive suite.
Cohen, people told Insider, combines intelligence and a supernatural ability to act on many projects simultaneously with a direct demeanor and a willingness to check her ego in service of achieving the best outcome. Detractors question the depth of her record to date, and acknowledge that this will be her biggest test yet.
This account of Cohen’s past and near future is based on interviews with more than a dozen colleagues, former colleagues, clients, and friends. (Cohen declined to comment for this story, but Goldman provided a list of seven people it said were willing to speak on her behalf.)
Read more: Goldman Sachs has named 6 people to lead product development in its consumer and wealth management group — a sign of big innovations to come from the growing division
Arming the rebels
Few strategies loom as large on Wall Street as Goldman’s early efforts at retail banking and its plans to expand them into a technology offering that spans the globe by acting as the back-end for companies that want to offer banking products under their own brand.
The idea is to use Goldman’s banking infrastructure, compliance regime, balance sheet, and relationships with the biggest companies to give those clients the ability to offer branded banking products.
The bank built a credit card with Apple, and it recently signed an agreement to partner with General Motors on the automaker’s credit card. It already lends to Amazon and Walmart merchants.
The strategy allows Goldman to acquire millions of customers more quickly than if it did it alone, and spreads out the cost of developing and running Marcus, the digital consumer bank run by Omer Ismail. Goldman will soon add checking and wealth-management accounts to Marcus’ savings and lending products. Insurance is also likely coming, people with knowledge of the strategy said.
Leading the strategy is a triumvirate of Goldman executives, insiders said. Cohen is joined by the chief information officer, Marco Argenti, a former Amazon exec, and Hari Moorthy, formerly of JPMorgan, who heads a new transaction-banking effort. (Insiders said that Cohen’s cohead, the 35-year Goldman veteran York, will be more focused on the wealth-management side of the business.)
Read more: A new Goldman Sachs tech exec hired from Amazon is taking a page from the Jeff Bezos playbook by urging engineers to ditch PowerPoint and write memos
If Argenti is the engineer and Moorthy the product manager, Cohen is the institutional player who brings both banking expertise and the knowledge of how to get things done within the politics of Goldman, one former employee said. Without her, the person said, Argenti would likely leave in frustration and Moorthy would be confined to a narrower role.
“You can’t do it without all three,” the person added. “But without her it fails and falls apart.”
‘A mergers black belt’
Cohen was a competitive figure skater who dreamed of making it to the Olympics. It was only in college, at the University of Illinois at Urbana-Champaign — where she finished in the top 3% of her class — that she began to think about alternative careers, she told herstorycreated.net, a site run by Reva Jariwala, a high-school student in California who interviews trailblazing women.
“I learned a lot about the power of perseverance from figure skating,” Cohen said in the Q&A. “You try and you fall, but you always pick yourself up. This idea of working from failure came a little more naturally to me because of that.”
She joined Goldman after graduation, in 1999, assuming she’d spend two years there and head off to law school. Instead, she settled in Goldman’s mergers department, where she gained an expertise in working with clients in industrials.
The sector is a favorite of the private-equity firms that throw lots of business to Wall Street banks like Goldman, and Cohen began to work with them more.
In 2011, she found herself as the lead banker selling a private-equity stake in AlixPartners LLP, the consulting firm that rose to prominence in the 1980s for advising on the bankruptcy of DeLorean Motor Co.
Fred Crawford, AlixPartners’ CEO at the time, said Cohen stood out for coming up with a cohesive and easy-to-understand message for prospective acquirers, and persuading the consulting firm’s management to rally around it.
“The intellect — her ability to carry a lot of things in her head and be processing against all of them simultaneously — it’s a real skill,” he said. When she acts on those things “it’s cut and dried and clean and timely and usually on point.”
The two have stayed in touch, and Cohen invited Crawford to join the board at CollegeSpring, which gives low-income students equal access to resources for taking college-prep exams.
Stephen deFalco ran Crane & Co., the US paper-production company, when Cohen brokered its sale. His was a niche business not well understood by bankers until she came along. She was a force at the negotiation table, he said.
“She’s very self-aware, and so it’s almost a little disarming, because sometimes you’re at a negotiation table. You know, the egos can run very hot and whatnot, and she doesn’t. She is absolutely cool, fact-based, thoughtful at every word, and I think it creates a sense of firmness that looks like it’s kind of an unbreakable resolve.”
As Cohen’s career led her to work with private-equity clients, it also placed her in the orbit of Alison Mass, a Goldman partner who has long led Goldman’s financial sponsors practice. Cohen and Mass talk several times daily, one person who knows them both said.
It was Mass who, with Friedman in 2017, first came up with the idea of holding an annual 12-person networking dinner for senior women at Goldman, Nasdaq and Carlyle, where Friedman was CFO when Mass was the coverage banker. Mass initiated Cohen into the club the following year.
Cohen has in turn taken to helping shape the careers of other Goldman women: Jemma Wolfe, the head of Launch with GS, who just took a job on the CWM strategy team; Tanya Baker, leader of the internal idea incubator; CEO David Solomon’s chief of staff, Ida Hoghooghi; and Heather Miner, Goldman’s investor relations chief, are all close associates.
“We always talked about who the ‘Q1s’ were, as we’d call the high-trajectory women. Stephanie was always on those lists,” Mass told The Cut in 2018. “We call her a mergers black belt.”
An intro to the partnership, and lessons learned
By the time Cohen was named a Goldman partner, in 2014, she was already on the fast track, helped by her stature in an investment-banking division then being run by Solomon and his chief lieutenant, John Waldron, a former partner said. She often organized get-togethers for her partner class and, and as a member of the partnership committee, reported on the class’ efforts to promote more cross-divisional collaboration, the person said.
But she wasn’t without detractors. Goldman has long held a reputation as being a brutally meritocratic place where bringing in business, or being “commercial” in company jargon, is more important than anything else.
One former partner said there were questions about whether Cohen had brought in the kind of money typically required of new partners. (A back-of-the-envelope calculation would require each partner to bring in $100 million or more in annual revenue, for example.) The same question was asked of Dina Powell, another senior woman at Goldman, who returned for a second stint after serving in the Trump administration.
Nonetheless, Cohen was tapped the following year to build a team to focus on M&A for private-equity firms. The small group quickly got overwhelmed and Cohen’s team got stretched, exposing a management flaw that she still considers a notable failure.
“That was a mistake,” she told herstorycreated.net. “I learned about the importance of building and scaling a team, focusing my time on making the people around me better, and hiring people with diverse skill sets and ways of thinking.”
In November 2017, then-CEO Lloyd Blankfein tapped Cohen to replace Stephen Scherr as chief strategy officer, elevating her into a role with an office on the 41st floor, where Goldman’s executive office is located.
Strategy deep dives
The role showcased Cohen’s approach to learning something new, and she set out to learn more about strategy and emerging technology, already convinced it would be a critical driver of Goldman’s future.
Roger Martin, the former dean of the Rotman School of Business at the University of Toronto, met her in 2018 after the two had been connected by Adam Grant, an eminent Wharton professor. Cohen began to pepper Martin with questions.
“‘OK, Roger. Adam said you advise lots of CEOs on strategy — you write about strategy. What do you think about how strategy ought to be done to be most effective in an organization?’ It was very exploratory in that way,” he said.
Cohen brought the same approach to forging a closer relationship to Silicon Valley. Assisted by David Haber, a member of her team and a former startup founder with deep relationships in the technology industry, she embarked on a “listening tour,” meeting more than 50 of venture capitalists and entrepreneurs in conversations she began by asking questions and soliciting advice about what Goldman could do better.
Patrick O’Shaughnessy, who interviewed Cohen for his podcast, “Invest Like the Best,” said her method of learning as much as she could, even if it meant acknowledging a degree of vulnerability, is a rare quality.
Two others who take a similar approach are John Collison at Stripe and Daniel Ek at Spotify, he said, adding that both “do an unbelievable beginner’s mind immersion and emerge two months later knowing more about it than anybody else because they’re willing to take a backseat.” Stephanie’s process looked similar, he said.
Cohen and her team began to read Ben Thompson’s website, Stratechery. Thompson, formerly of Apple and Microsoft, has written about the strategies the big tech firms like Amazon, Google, and Facebook are using to control the internet.
Cohen, Haber and others at Goldman — former CFO Marty Chavez, most notably — saw a way to apply that model to financial services. The idea is now central to how the firm is looking to reinvent itself.
“She deeply understands that tech is going to be a key driver of competitive advantage for Goldman in the future,” a former employee said.
Cohen and York have started shaping the division in their vision, naming Wolfe and Stephan Lambert to a newly formed strategy team and tapping six executives to run product in the division.
If Cohen can successfully employ technology to supercharge Goldman’s future, she’ll be a contender for the top job, insiders say. Internal politics won’t help.
She’ll have competition from other Goldman elites like John Waldron, the firm’s president, widely considered to be first in line when Solomon ends his tenure. And there’s Julian Salisbury, the global cohead of Goldman’s asset-management unit who’s known internally as a political executive who has fostered a close relationship with Solomon.
And yet Cohen is no slouch when it comes to navigating the firm, people said. Not the backstabbing type, she’s smart enough to understand she has to pay attention to that side of her career if she wants to succeed, said a friend and former colleague who spoke on condition of anonymity to preserve their relationship.
“She does not use politics as a way to advance herself,” he said. “But she is savvy enough not to let it be something that holds her career back.”
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