Blackstone's Stephen Schwarzman on Hiring Phenomenal People
Summary
TLDRIn this insightful interview, Steve Schwarzman, CEO of Blackstone, reflects on his entrepreneurial journey and the challenges of building one of the world's largest asset management firms. He discusses the importance of having a clear vision, the value of persistence in the face of rejection, and the significance of creating a culture that fosters growth and innovation. Schwarzman emphasizes the necessity of integrity, adaptability, and the pursuit of excellence in both leadership and personal endeavors.
Takeaways
- 😀 The importance of persistence and resilience when starting a business, especially in the face of numerous rejections and challenges.
- 🚀 The value of having a clear vision and strategy when founding a company, and the need to offer something distinctive in the market.
- 🤝 The significance of building a strong team with exceptional individuals, referred to as 'tens', who can drive success and innovation.
- 💡 The concept of 'great fantasies' as a driving force for ambition, which involves setting high aspirations and working to realize them.
- 🛠️ The emphasis on creating intellectual capital and constantly building upon it as a core part of business growth and development.
- 🔑 The recognition that being a CEO requires a distinct set of skills, including the ability to articulate core values and provide autonomy to team members.
- 🔄 The necessity for a CEO to balance control with the delegation of responsibilities, allowing team members to feel a sense of ownership and importance.
- 💼 Insights into the hiring process, highlighting the importance of matching capabilities with personality, and the cultural fit within an organization.
- 👥 The understanding that people are not like parts of a deal and that managing a team requires a nuanced approach that respects individual dignity.
- 🏆 The personal motivation of the interviewee, driven by a desire for continuous learning, facing new challenges, and the pursuit of excellence in all endeavors.
- 🌐 The acknowledgment of the fear of failure as a motivator and the importance of maintaining a sense of vulnerability and adaptability in a leader.
Q & A
What was the initial challenge Steve Schwarzman faced when starting Blackstone?
-Steve Schwarzman faced the challenge of starting Blackstone during a time when private equity was new and considered risky. He and his cofounder, Pete Peterson, had no track record in investing, which made it difficult to gain trust and support from potential investors and clients.
How did Steve Schwarzman approach the strategy for a new business?
-Steve Schwarzman emphasized the importance of figuring out the business strategy before executing it. He and Pete Peterson would meet every morning for hours to discuss their vision, what they wanted to achieve, and why anyone should work with them, highlighting the need for a distinctive offering in the market.
What was the 'great fantasy' Steve Schwarzman mentioned in the context of starting a business?
-The 'great fantasy' Steve Schwarzman referred to is the idea of having ambitious dreams or visions for what you want to achieve in life, and then working towards realizing them. In the context of starting Blackstone, this fantasy involved creating a business that would be successful in mergers and acquisitions and private equity.
What criteria did Steve Schwarzman and Pete Peterson establish for their business affiliates?
-They established three criteria for their business affiliates: an amazing investment opportunity, attracting someone to run it who was exceptional (a 'ten' on a scale of ten), and ensuring that the affiliates would generate intellectual capital that enhances the existing business.
How did Steve Schwarzman handle the fear of failure in his entrepreneurial journey?
-Steve Schwarzman acknowledged the fear of failure but stated that if one does not have that fear, they will stay asleep and fail. He emphasized the importance of having a remarkable human effort to overcome challenges and the importance of being fundamentally delusional to make things happen.
What was the significance of the first private equity fund raised by Blackstone?
-The first private equity fund raised by Blackstone was significant because it was the largest first-time fund in history at that time. It was raised by two people with no prior investment track record, demonstrating the power of persistence and force of will.
How did Steve Schwarzman deal with dishonesty and rejection during the fundraising process?
-Steve Schwarzman faced numerous rejections and dishonesty, including from individuals he had previously helped. He advised having a thick skin and being prepared for such setbacks, suggesting that the experience can make one a more humble and nicer person.
What is Steve Schwarzman's view on the role of a CEO?
-Steve Schwarzman believes that being a CEO is about more than just being an entrepreneur. It involves a different set of skills, including the ability to articulate core values, provide growth opportunities for employees, and balance control with autonomy. He also emphasizes the importance of being careful with every move and ensuring that people feel secure and valued.
What advice does Steve Schwarzman give for maintaining a culture of excellence in a growing organization?
-Steve Schwarzman advises to never stop articulating the core values of the business and to ensure that everyone in the organization understands and stands for those values. He also stresses the importance of surrounding oneself with phenomenal people who share the same value system and providing opportunities for growth and autonomy.
How did Steve Schwarzman apply his leadership philosophy to the early years of Blackstone?
-In the early years of Blackstone, Steve Schwarzman applied his leadership philosophy by setting up a rigorous investment process where every deal was critically examined by the team. This approach helped to ensure that every investment was thoroughly evaluated and understood, reducing the risk of failure.
What personal traits does Steve Schwarzman believe are important for effective leadership?
-Steve Schwarzman believes that effective leadership requires traits such as the ability to learn and adapt, a desire for creation and innovation, and an insatiable need to learn what's going on and see something new. He also values the ability to deal with complexity and problems and the enjoyment of being in charge and doing new things.
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