Learning from Stephen Schwarzman (again)

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Just finished Stephen Schwarzman’s new book What it Takes, which is a kind of a combination memoir and business advice book.

Regular readers know I idolize Schwarzman, who founded Blackstone and built it into, by far, the largest manager of alternative assets in the world. As one of the co-founders of a tiny speck of an alternative manager, it’s both inspiring and humbling to be reminded of all that Schwarzman has accomplished.

For me, the best part of the book was Schwarzman’s explanation of the genesis of Blackstone’s culture. How did he build that magnificent machine?

First, he went out of his way to hire what he calls “10s”, people who are capable of identifying big opportunities, developing strategies to take advantage of them, and executing.

Second, he instilled an ethic of intellectual rigor and honesty that allows even junior staff to contribute to tearing apart investment ideas to see if they hold up.

Third, he has done a fantastic job of promoting from within, giving talented people the opportunity to grow their careers inside the organization, rather than having to leave to get more responsibility (and, presumably, economics).

When you’re a founder, it’s easy to believe you have all the answers and scary to admit that other people may know better than you. I hope Jon and I have the humility and the self-confidence to do as Schwarzman has done in attracting spectacular people and giving them the scope to thrive.

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