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What It Takes by Stephen Schwarzman: Book Review + 5 Key Takeaways

What would you give for a few hours of one-on-one time with a self-made billionaire CEO?

For a sense of what it would be like, you can pick up What It Takes: Lessons in the Pursuit of Excellence, Stephen Schwarzman’s recently released memoir.


Schwarzman is the co-founder, CEO, and chairman of Blackstone, an investment and advisory firm that manages $500 billion and invests in hundreds of companies globally. In What It Takes, he shares a series of personal stories and “inflection points” in his life and career, complete with hard-won lessons and insights.


If you’re interested in how the mind of a hungry, pragmatic, ultra-successful entrepreneur works, this is a great place to start.


What if I don’t work in Finance?

Sure, the book is immensely valuable finance pros with familiarity around the people, companies, and subject matter. But don’t be dissuaded if you’re not a native of Wall Street. Finance and investing are constants in the book, but the industry is mainly a backdrop, and a vehicle for Schwarzman’s insatiable desire to build and achieve.


“Finance proved to be the means for me to learn about the world, form relationships, tackle significant challenges, and channel my ambition.”

He admits he was no financial whiz, but instead flourished due to skills that are transferable across industries, like his “ability to see patterns and develop new solutions and paradigms, and with the sheer will to turn my ideas into reality.”


The stories, and even complex financial concepts or jargon, are explained so that any layman can understand. The challenges, themes, and lessons are universal, making the book as accessible as it is inspiring.


Making a difference

Schwarzman shares his accounts of remarkable deals and financial transactions, the inner workings of various economic downturns, rubbing shoulders with world leaders, his influence on political affairs, and an array of large scale philanthropic activities.


While outwardly he encourages readers to think big, he discusses his earliest successes — like his role in getting Yale’s dating policy changed, or small wins early in his career — with the same gusto and pride as his more recent commercial and political feats.


This exposes the book’s real message: not everyone will, or even wants to, make a billion dollars. Take risks, be bold, and have the courage to do what others won’t. However large or small, make a positive difference, and leave things better than you found them. Leave no ounce of potential untapped.


Stephen Schwarzman at Davos [Source: World Economic Forum]

The catch-22 of success stories

Here’s where I get hung up, though: the late chapters of What It Takes become a bit one-dimensional. It descends into a laundry list of triumphs, leaving readers desensitized to their gravity.


But this is the catch-22 for all autobiographies of the uber-successful: whatever the authors encounter at the top of the mountain feels boring and unrelatable compared to the tremendous peaks and valleys of their come-up, where dreadful obstacles abound and even the smallest wins — usually brought about by gritty ingenuity and tenacity more than corporate sleight of hand — feel momentous (1).


So in such a book we’re forced to take the late chapters somewhat for granted. The monotony is proof positive that they did something right. A life well-lived arguably should get easier as time goes on — you should be learning and growing, and the same mistakes and deficiencies shouldn’t keep knocking you off course over and over. The whole point of grinding for your first 50 years is so the next 50 aren’t so damned difficult.


So we're often forced to judge these stories primarily on the drama and excitement of the rise to fame, fortune, and influence, the early struggles and mistakes, the crucial early wins and tipping points, and the lessons learned along the way. And on that basis, What It Takes undoubtedly still delivers.

Ambition fuel

No matter who you are, this book is potent ambition fuel. You’ll come away fired up, eager to make your mark on the world and rack up your own accomplishments. It’s loaded with valuable lessons and principles that you can apply in your own life and career, in relentless pursuit of your own version of excellence.


You can get started on your journey by picking up the book here.


In the meantime, here are my 5 favorite takeaways from Stephen Schwarzman’s What It Takes: Lessons in the Pursuit of Excellence:


1.) How to solve complex, multivariate problems and build negotiation mastery

As Schwarzman’s career progressed, he was faced with increasingly complex deals and decisions. How do you solve huge problems with multiple stakeholders and countless, constantly changing variables?


According to the author, after studying the problem in detail, “pull back and look for the handful of variables that could determine the key points for any deal.” Don’t try to optimize for every single possible detail. Redefine the problem or goal by focusing only on a few key variables or determinants.


For a simple example, if you’re deciding where to go on vacation, you’ll never reach a decision by trying to find the "perfect" destination that checks every possible box. But if you focus on just a few factors — e.g. price, historical significance, and cuisine — it’s much easier to reach a satisfactory outcome.


Once you’ve zoomed out and settled on the key areas of focus, Schwarzman recommends identifying the “zone of fairness.”


While the book doesn’t define the concept explicitly, a zone of fairness is essentially where the interests of two (or more) parties intersect. An outcome that falls within these boundaries would be considered fair on all sides, allowing a deal or decision to be reached.


Let’s go back to the vacation example: If you plan on traveling with a significant other, for example, it’s doubtful you’ll have a happy trip if one person unilaterally decides where to go. It must be a negotiation. If they suggest a destination with an exorbitant price tag, or a horrid cuisine, automatically you know the outcome falls outside your zone of fairness, and it’s a non-starter.


You can ensure a mutually advantageous outcome by focusing on the zone of fairness, where everyone is satisfied with the outcome, even if the key variables differ between parties.


To take it a step further, in a true negotiation your objective is to ensure that once you land within the zone of fairness, the scales are tipped as far in your favor as possible. That way it's still fair to the counterparty, but the deal is sweeter on your end. This is especially true with the zero-sum deals more typical in finance and investing, although not as wise a move for our vacation example...

Always focus on the zone of fairness.

2.) A foolproof method for creating a competitive advantage

How do you create a competitive advantage, especially as a new, unproven entrepreneur or deal-maker?


Go where the established players won’t. Your best bet, according to Schwarzman, is to find a real bastard of a problem that others won’t touch, and solve it. “The harder the problem,” he explains, “the more limited the competition.”


Easier said than done, sure. But as a new player you can devote more time and attention to problems that established competitors and larger firms can’t justify. In doing so, you carve a niche for yourself, and develop a valuable reputation.


“If something’s easy, there will always be plenty of people willing to help solve it. But find a real mess, and there is no one around. If you can clean it up, you will find yourself in rare company. People with tough problems will seek you out and pay you handsomely to solve them. You will earn a reputation for doing what others cannot.”

In short, your size and scale may feel like a weakness, but it can be leveraged as a strength. It allows you to build a client base and competitive advantage by doing difficult, unscalable things that others won’t consider — something that comes up constantly in the world of entrepreneurship.


3.) The harsh realities of entrepreneurship

Schwarzman does us the favor of being brutally honest about all the ups and downs of the entrepreneurial journey, dispelling myths and misconceptions along the way.


In perhaps the most fascinating chapters of the book, Schwarzman describes the pain of getting Blackstone off the ground alongside his intrepid business partner Pete Peterson. He recalls the humiliating transition from being some of the biggest names in Finance to complete nobodys, “so irrelevant” that people forget having met them.


“Not so long ago, people fought to have us work for them. Pete and I hadn’t changed, but now that we were out on our own, no one cared about us. As the days ticked by, I worried we would be just another failed start-up.”

Aspiring entrepreneurs be warned: The author pulls no punches in describing the bitter rejection, and worse, the feeling of pure insignificance as a novice founder.


“The rejections were horrible and humbling. The setbacks seemed endless. We met people who lied to us or never showed up for appointments even after we had traveled across the country. People we knew well in positions of authority rejected us.”

They had to tap every form of fuel and motivation they could muster, for example, the desire to prove the naysayers wrong:


“I felt I was failing on every count. I was overwhelmed by self-pity.... To see Pete and me, who had been so powerful at Lehman, so sure of our success, take a beating would have given many people pleasure. I couldn’t let it happen. I could not fail. I had to find a way.”

As an entrepreneur, remember that outsiders only see your success or your failure. They can’t imagine the feeling of staring at what feels like an endless gap between where you are and the business you imagine. They don’t see the inflection points, the internal battles, the relentless doubt, the countless struggles and obstacles, and all the instances where you’ve come within inches of folding.


“Once you succeed, people see only the success. If you fail, they see only the failure. Rarely do they see the turning points that could have taken you in a completely different direction. But it’s at these inflection points that the most important lessons in business and life are learned.”

Blackstone felt like it was on the brink of death for so long, but the founders soldiered on, learning from every dead end and fork in the road, taking whatever “insignificant pieces of business” they could find. They built momentum slowly but surely. Eventually, after they had been humbled so many times, their startup dues had been paid, and the flywheel started turning.

4.) Keep pitching - over and over and over

I cringe when people try to apply the adage “once you build it, they will come” to the startup world. For one prime example, Schwarzman and Peterson were wealthy, established finance professionals with expansive networks and solid reputations, but the process of getting their business off the ground was brutal, slow, uncertain, and fraught with anxiety.


They did whatever they could to sustain themselves mentally through the journey, but at the end of the day, clients wouldn’t magically appear as a reward for their suffering. What was their secret method for bringing in new business?


“Call, then keep calling.” It’s as simple as that — but so important that the author uses the phrase as a chapter title. Their prior lives on Wall St. did them no favors in opening doors or closing prospects. They had to pitch, and sell their vision to anyone who would listen.


“As a salesman, I’d learned you can’t just pitch once and be done. Just because you believe in something doesn’t guarantee anyone else will. You’ve got to sell your vision over and over again. Most people don’t like change, and you have to overwhelm them with your argument, and some charm. If you believe in what you’re selling and they say no, you have to presume that they don’t fully understand, so you give them another opportunity.”

Like the founders of Blackstone, who eventually had to span the globe drumming up business, you’ll need to cast the widest net you can to get your first couple of customers. You’re going to have to “smile and dial,” do things that don’t scale, and pitch your dream — over and over and over.

Smile and dial

5.) "Time wounds all deals"

Finally, here’s an axiom that any businessperson is wise to have tattooed on their wrist: Time wounds all deals. As Schwarzman explains:


“There is a saying in finance that time wounds all deals. The longer you wait, the more nasty surprises can hurt you. I like to finish work quickly. Even if tasks are not urgent, I like to get them done to avoid the unnecessary risks of delay.”

In the late 80's, Blackstone was raising capital for its first investment fund. The markets were hitting record highs, and once they secured enough money from investors, they hauled ass to get everything through the finish line. Unbeknownst to them, a storm was brewing, and they were saved by their speed of execution:


“On the morning of Monday, October 19, with our fund closed and the money committed. That day, the Dow dropped 508 points, the largest one-day percentage drop in stock market history, bigger than the one that triggered the Great Depression. If we had taken an extra day or two to close the fund, we would have been caught in the downdraft of Black Monday. The money could have slipped away, all our efforts gone to waste. Our urgency had saved us.”

Maybe there’s no need to run sixth gear at all times, but growing a startup is like a constant walk on thin ice. Your default should be to operate with a sense of urgency and a bias for action. You might see problems approaching, but many times, like in Blackstone’s example, you'll be unaware of the ice splitting under you. Velocity is often the only thing that will save you from collapse.

Growing a startup is like a constant walk on thin ice. [Source: Shutterstock]

It was difficult narrowing down my takeaways from this book — What It Takes is loaded with fascinating anecdotes and lessons, and closes beautifully with the author's "25 Rules for Work and Life." I didn't even get a chance to touch on Schwarzman's philosophy on how to lead and manage an organization, build a company culture, stay innovative, operate with integrity, hire "10s," present yourself in the best light, or identify and nurture up-and-coming talent — but it's all there in What It Takes.


Give this one a try if you're early in your career and want to learn to truly differentiate yourself, if you're an aspiring or existing entrepreneur, or if you work in finance and want to learn what it takes to lead and succeed.


P.S. — If you enjoyed this and want more Entrepreneurship book reviews and takeaways, subscribe to my newsletter below!


Footnotes:


(1) Another example comes readily to mind: I remember feeling this way late into Richard Branson’s Losing My Virginity as well. The rise to the top — his experiences and anecdotes founding a magazine, a record store, a record label, and eventually an airline — are enthralling. But later in the book when he's steering huge companies, dealing with corporate B.S., and keeping himself entertained by doing crazy, life-threatening stunts only a super rich person could pull off, the story loses much of its zest.

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