Sufficient credit often is not given for the supporting system in the success or failure of a business or enterprise. A recent case is the failure of MF Global (equity $1.4 billion, liabilities $44.4 billion, as of June 30, 2011), the hedge fund headed up by Jon Corzine, former New Jersey governor and 25-year veteran of Goldman Sachs. “He was from Goldman Sachs…” was the oft-repeated phrase by insiders when explaining why they acquiesced to his risky trades (The New York Times, November 1, 2011, p. B1).

Ah, the old Goldman Sachs halo. But is it portable? Didn’t help former Goldman great John Thain, who resigned as CEO of Merrill Lynch after greater than anticipated losses or Robert Rubin, another Goldman legend whose post-Goldman investments were far from golden. Nor did the halo save Chris Flowers, who left Goldman in 1998 and whose most-recent fund lost just shy of $4 billion.

So what is it? Were all these former Goldman stars really flakes? Flukes? Or perhaps they have true genius, just genius in need of structure, support and, yes, at times even a culture of restraint. Did they need a system the equal of their genius, perhaps the system that was the institution of Goldman Sachs?

For all its mythical reputation as a modern-day King Midas minting money at will, Goldman also has a lesser known but equally strong reputation for risk analysis, internal audit, and compliance. They have strong internal cops (risk managers) who have access to the top, and the top has a history of listening. This vital but more plebeian aspect of Goldman’s success is not widely known or appreciated or copied.

Good people need good systems to achieve their best. Focused training, effective checks and balances, and prompt, useful feedback leverage the efforts of good people and achieve great results.

Unfortunately, bad systems (sadly, often government) can hamstring good people, resulting in mediocre results. This can create a downward spiral were the good people become dispirited and leave, while the apathetic stay.

Note: Full disclosure: I’ve visited (and been visited by) Goldman Sachs multiple times, discussing joint ventures. Goldman associates have been uniformly impressive.