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When a panel of nine federal jurors last week found onetime Goldman Sachs Group trader Fabrice Tourre liable for securities fraud for intentionally misleading investors in the now-infamous 2007 mortgage-linked offering called Abacus , Goldman CEO Lloyd Blankfein and his management team must have been feeling pretty good about their decision three years ago to pay a then-record $550 million to settle charges by the Securities and Exchange Commission against the firm for its role in the failed deal. Blankfein and company have been eager to put the incident behind them, says Charles (Charley) Ellis, founder of international business strategy consulting firm Greenwich Associates and author of the 2008 classic The Partnership: The Making of Goldman Sachs. At about the same time that it was settling with the SEC, Goldman created a business standards committee consisting of 17 of its most senior executives, as well as securities industry sages H. Rodgin Cohen of law firm Sullivan & Cromwell and former SEC chairman Arthur Levitt, to study every aspect of its operations. In January 2011, Goldman’s board approved the committee’s 39 recommendations , which included renewing the firm’s focus on serving clients and increasing transparency.

“I really think that they are going to pull themselves out of this,” Ellis tells Institutional Investor. “They are still the best firm in the business, have the best people and have the best systems.”

Few people know Goldman Sachs better than the 75-year-old Ellis, who turned down a job offer from the firm in 1963 after graduating from Harvard Business School because he was recently married and needed more money than Goldman was paying. (“It never occurred to me to ask if the firm gave bonuses or raises at the end of the year, so I made a terrible, boneheaded decision when I didn’t accept their offer,” he said in an October 2001 interview at HBS.) Ellis eventually ended up at Donaldson, Lufkin & Jenrette, where he worked for six years before tiring of the politics and lack of meritocracy. In 1972 he founded Greenwich Associates to focus on providing strategic advice to commercial banks, insurance companies, investment banks, investment managers and securities dealers. By the time he left in 2009, the firm had grown to more than 300 people and was advising financial institutions in 135 markets around the world.

Goldman Sachs was one of Ellis’s earliest and longest-standing clients, a relationship that began when the consultant got a call from a secretary for Gustave (Gus) Levy, who ran the firm from 1969 to 1976, saying that Mr. Levy would like to meet with him. The mission of Goldman shifted under Levy, who “put increasing emphasis on profits from arbitrage, institutional brokerage and block trading,” Ellis writes in his latest book, What It Takes: Seven Secrets of Success from the World’s Greatest Professional Firms. Although co–senior partners John Whitehead and John Weinberg turned the focus back to investment banking during their reign in the late ’70s and ’80s, their decision to acquire commodities trading firm J. Aron & Co. in 1981 laid the groundwork for the increasing shift away from client-serving businesses under Goldman’s future top executives Robert Rubin, Stephen Friedman, Jon Corzine, Henry (Hank) Paulson Jr. and current CEO (and former J. Aron precious-­metals salesman) Blankfein. As Ellis explains in the following exclusive excerpt from What It Takes, “the multiple recent crises of Goldman Sachs were at least several decades in the making.”  — Michael Peltz