Executive Q&A: Blackstone CEO Steve Schwarzman

Founder and CEO Steve Schwarzman leading a Blackstone meeting

What was your favorite class at Harvard Business School and what was the big lesson(s) you gained from it that you still apply today?

My favorite class was Production. I’m terrible with mechanical things, working with my hands, anything of that type. For some reason, I found production, the idea of building and running large factories (and systems) fascinating. So I had a lot to learn in that area. It was almost a symbol of how you deal with complex systems, integrate them and make them work efficiently to come out with something that is called a product. If you start with raw materials or minerals in the ground, you figure out how you make that chain work and get something out in a timely basis that consumers might even want: I thought that was like a mystery and a great thing to spend time on, which would not immediately be what someone would think about from an intellectual pursuit area, but I loved that class!

One unique aspect of Blackstone is that first year MBAs spend a considerable amount of time with both you and Tony James as part of your apprenticeship-modeled culture. As a result, you’ve had a first-hand look at how MBAs have evolved over time. What is the difference between MBAs of today and maybe 10 years ago – or even from when you were first an MBA?

I think the people we recruit are terrific human beings. They’re lovely, smart, and attentive. Probably 10-15 years ago, there was more attitude for some reason. Now, they’re simply great team members capable of enormous growth.

Kristen Williams, your global head of campus recruiting, told me that one of the biggest cultural expectations at Blackstone is to “Be nice.”  Being smart isn’t enough and engaging in politics or being disrespectful towards peers is a career ender. What are some of the key soft skills that MBAs should possess in their first job after school and what are some ways that you’ve seen potential students (Maybe 24 or 25) or seasoned professionals develop such skills? 

If people are 24 or 25 and they’re purporting to be adults, we accept them as adults. They’re like the rest of us. We expect people to be polite, smart, insightful, and have the highest levels of integrity. We expect them to be non-political. It’s an ever-expanding pie at Blackstone. There’s a place for everybody with talent.

So it’s very important that people understand that we only have people who want to be helpful, team-oriented, and believe in a meritocracy culture. If you don’t like all those things, you don’t belong here and you’ll stick out like a sore thumb. We’re not looking for people who want to create more stress with people around them. We have enough stress with what we do. So the firm internally should be a highly supportive environment and we’re very rigorous in making sure that’s what it is.

People on the outside say, ‘Jeez, you’re much different than many other places.’ And I basically say, “I don’t know. I may be a little out of touch, but it seems normal to me.” And they say, ‘Well, it’s not normal.’ And I tell them it should be like this. It works for everybody. That’s how I approach it.

You’ve reached the point where you don’t have to work. You’ve sealed your legacy by building a powerhouse organization. You’ve made your money. You have a strong reputation. Most important, from watching you on videos, you seem pretty happy. And that begs two questions. First, what keeps you fresh, imaginative, curious, and passionate? Second, looking at your own journey, how can young MBAs (and established professionals) get to where you are in terms of having a spark or having that motivational drive and spiritual calm?

I think it has something to do with your genes and something to do with your environment. In terms of the genes, I can’t help you with that. In terms of the environment, I think business is fascinating. It’s global. It involves over 200 economies in the world. Something is always happening in the different countries we’re in, businesses ranging from private equity which has all different kinds of industry and type and size, real estate, leverage credit, hedge funds, all kinds of other things we do here in the alternative industry. It’s really a bit of an intellectual piece and trying to figure out what’s going to be happening in different parts of the world. You have to marshal a knowledge of politics, economics, human behavior, cycles – it’s really fascinating and an endlessly changing challenge and job. It’s not really a job. It’s a life. If you enjoy focusing on things that never seem to be resolved and are constantly evolving, then it’s exciting. And not everyone gets excited by those types of things. For me, it’s enormously self-actualizing…and fun.

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