Stephen Schwarzman | The Knowledge Project #69

Hiring

Stephen Schwarzman emphasizes the importance of never compromising when hiring people. He believes that good enough is not good and that employees need thorough training to ensure they truly understand their roles. Schwarzman also discusses the process of making executives through training and coaching, highlighting the value of experience and judgment in difficult situations 1 2.

Never compromise when you're hiring people. Good enough is not good. And people need to be trained. You can't assume they know things just because they tell you they do.

--- Stephen Schwarzman

Creating a culture of transparency and continuous feedback is crucial for organizational success, according to him.

   

Decisions

In decision-making, Stephen Schwarzman prioritizes not losing money over potential gains. He compares this approach to a doctor's principle of 'do no harm,' emphasizing the importance of protecting capital 3. Schwarzman also highlights the value of learning from mistakes, advocating for a culture where errors are analyzed and used to improve processes rather than assigning blame 4.

The most important decision is to not lose money. Some people care about the upside. They don't worry much about the downside if they think the upside is great. I like to start in the reverse, sort of like a doctor, you know, do no harm.

--- Stephen Schwarzman

This method fosters an environment of continuous learning and improvement.

   

Crisis

Stephen Schwarzman shares his experiences managing Blackstone during the financial crisis, emphasizing the importance of staying calm and focused. He describes the massive deleveraging in the financial markets and how Blackstone's strategy of maintaining liquidity helped them survive 5. Schwarzman also discusses the foresight he had leading up to the crisis, recognizing the signs of an overheated market and making strategic decisions accordingly 6.

You can't get emotionally tied up in it because you didn't have anything to do with it. And we got through that period.

--- Stephen Schwarzman

His approach underscores the importance of strategic planning and emotional resilience in crisis management.