What It Takes

Lessons in the Pursuit of Excellence

Stephen A. Schwarzman

• Publisher: Simon & Schuster UK
• Year: 2019
• Print ISBN: 9781471189555
• eBook ISBN: 9781471189562
• Topic: Business
• Subtopic: Business General
• Index: Business

'This story literally has what it takes: the anecdotes, the insights and, most of all, the values to guide the next generation of entrepreneurs' – Mark Carney

Blackstone chairman, CEO and co-founder Stephen A. Schwarzman shows readers how to build, transform and lead thriving organisations.

Stephen Schwarzman took $400,000 and cofounded Blackstone, the investment firm that manages over $500 billion and invests in hundreds of companies globally. He’s the CEO whose views are sought by heads of state around the world and supports universities with funding for cutting edge research and technology. But behind these accomplishments is a man who has spent his life learning and reflecting on what it takes to achieve excellence, make an impact and live a life of consequence.

Schwarzman’s story is an empowering, entertaining and informative guide for anyone striving for greater personal impact. From deal-making to investing, leadership to entrepreneurship, philanthropy to diplomacy, Schwarzman has lessons for how to achieve success through the relentless pursuit of excellence.

 

REMOVE THE OBSTACLES

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GO BIG

Schwarzman’s Curtains and Linens sat beneath the elevated train in the middle-class Frankford section of Philadelphia, selling draperies, bedding, towels, and other household goods. The store was busy, the products good, the prices fair, and the customers loyal. My father, who had inherited the business from my grandfather, was knowledgeable and friendly. He was happy running the business just as it was. For all his intelligence and hard work, he had no ambition to move beyond his comfort zone.

I started working at the store when I was ten years old for ten cents an hour. I soon asked my grandfather for a raise to twenty-five cents an hour. He refused. “What makes you think you’re worth twenty-five cents an hour?” I wasn’t actually. When a customer came in with window measurements and wanted to know how much fabric she needed for drapes, I wouldn’t have the foggiest idea how to figure it out or what to tell her, or even the desire to learn. During the Christmas season I was put in charge of selling linen handkerchiefs to elderly ladies on Friday nights and Saturdays. I’d spend hours opening box after box of nearly identical handkerchiefs, none costing more than a dollar, and then pack them all away again once the customer had made her choice or rejected everything after five or ten minutes. It felt like a waste of time. In my four years as an employee, I evolved from a grumpy child to an argumentative teenager. I was particularly upset about the toll this job was taking on my social life. Instead of attending football games and high school dances, I was stuck at the store, cut off from the world I wanted to be a part of.

But while I could never master gift wrapping, I could see the potential for Schwarzman’s to grow. The Greatest Generation had returned from World War II. We were in an era of extraordinary peace and affluence. Homes were being built, suburbs were expanding, and the birthrate was spiking. That meant more bedrooms, more bathrooms, and more demand for linens. What were we doing with one store in Philadelphia? When America thought linens, it should be thinking Schwarzman’s Curtains and Linens. I could imagine our stores from coast to coast like today’s Bed Bath & Beyond. That was a vision I could fold hankies for. My father disagreed.

“Okay,” I said. “We could just expand all over Pennsylvania.”

“No,” he said. “I don’t think I want to do that.”

“How about Philadelphia? That couldn’t be too difficult.”

“I’m not really interested.”

“How can you not be interested?” I said. “We have all these people who come into the store. We could be like Sears.”—which was prosperous and ubiquitous at that point—“Why don’t you want to do this?”

“People will steal from the cash register.”

“Dad, they’re not going to steal from the cash register. Sears has stores all over the country. I’m sure they’ve figured it out. Why don’t you want to expand? We could be huge.”

“Steve,” he said, “I’m a very happy man. We have a nice house. We have two cars. I have enough money to send you and your brothers to college. What more do I need?”

“It isn’t about what you need. It’s about wants.”

“I don’t want it. I don’t need it. That will not make me happy.”

I shook my head. “I don’t understand. This is a sure thing.”

Today, I understand. You can learn to be a manager. You can even learn to be a leader. But you can’t learn to be an entrepreneur.

My mother, Arline, was restless and ambitious, a great complement to my father. She saw our family coming up in the world. She once decided to learn to sail—I suppose she imagined us like the Kennedys, hair blowing in the salt breeze off Hyannis Port—so she bought a twenty-foot sailboat, learned to sail it, and entered us in races—Mom at the helm, Dad doing as he was told. She won lots of trophies. My twin brothers and I always admired her competitiveness and will to win. In a different era, she would have been CEO of a major corporation.

We lived in a semidetached stone and brick house in Oxford Circle, an almost entirely Jewish neighborhood of Philadelphia, and I grew up playing on playgrounds littered with broken glass bottles, surrounded by kids smoking. The father of one of my best friends, who lived across the street, was killed by the mafia. My mother didn’t like seeing me with the guys in black leather jackets who hung out at the bowling lanes along Castor Avenue. She wanted better schools for us. So not long after I started junior high, she decided to move us out to the more affluent suburbs.

In Huntingdon Valley, Jews were a rarity, about 1 percent of the population. Most people were white, Episcopalian or Catholic, happy with their place in the world. I found everything there incredibly easy. No one was trying to hurt or threaten me. I did well academically and led the state championship track team.

In the 1960s, the United States felt like the economic and social center of the world. Everything, from civil rights to sex to attitudes toward war was changing, as the United States escalated its involvement in Vietnam. I was part of the first generation to grow up seeing the president on television all the time. Our leaders were not mythical figures; they were accessible to people like us.

Even Abington High School became part of this change during my sophomore year. Every morning at school, in accordance with Pennsylvania state law, we listened to verses from the Bible and said the Lord’s Prayer. I didn’t mind, but Ellery Schempp’s family did. They were Unitarians and felt that the school’s Christian emphasis violated their rights under the First and Fourteenth Amendments to the Constitution. The Schempp case reached the US Supreme Court, which ruled 8–1 that the Pennsylvania prayer statute was unconstitutional. The case put Abington High School at the center of a national debate, with many Christians arguing that this case was the beginning of the end for their religion in public schools.

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At the end of my junior year, I was elected president of the student council. In that position, I first experienced what it means to be an innovator.

My father may have vetoed my idea to turn Schwarzman’s Linens into the first Bed Bath & Beyond, but now I was in charge of something of my own. The summer between my junior and senior years, we took a family car trip to California. I sat in the back seat with my mother driving, the warm air blowing in my face, imagining what I could create with my new position. I didn’t want to be just another name on a long list of student leaders. I wanted to do something that no else had done, or even thought to do. I wanted to develop a vision that was so exciting that the whole school would rally to help make it happen. As we drove from coast to coast and back, I scribbled notes on postcards to my fellow officers of the student council, random ideas, which I would mail every time we stopped. They were all at home, lounging around, getting this blizzard of cards, while I was in search of a great idea.

It finally came to me as we were driving. Philadelphia was the home of American Bandstand, a television show for teenagers hosted by Dick Clark. The city also had really wonderful radio stations, like WDAS, one of the leading African American radio stations in the country. I listened to music obsessively, from James Brown to Motown, the great doo-wop groups of the 1950s, then the Beatles and the Rolling Stones. At school, I could barely walk the halls without hearing the student rock groups practicing the songs they heard in the bathrooms and stairwells, wherever the acoustics were good. One of their favorites was “Tears on My Pillow” by Little Anthony and the Imperials. That was the sound and emotion of high school. Tears on my pillow, pain in my heart.

How great would it be, I asked myself, if we could get Little Anthony and the Imperials to come to school and perform in our gym? Sure, they lived in Brooklyn and were one of the most popular groups in the country at the time and we had no money. But why not? It would be unique. Everyone would love it. There had to be a way, and I made it my job to figure out how.

Fifty years on, the details are hazy. But there were a lot of phone calls, a lot of whose dad knows whom. And at the end of it, Little Anthony and the Imperials came to Abington High School. I can still hear the music, see the band onstage, and feel everyone having a great time. If you want something badly enough, you can find a way. You can create it out of nothing. And before you know it, there it is.

But wanting something isn’t enough. If you’re going to pursue difficult goals, you’re inevitably going to fall short sometimes. It’s one of the costs of ambition.

Jack Armstrong, my track coach at Abington, was medium height, medium build, with gray hair swept back behind his ears. Every day, he wore the same maroon sweatshirt and windbreaker, the same stopwatch on a lanyard around his neck. And every day, he brought the same positive, cheerful demeanor to work. He never shouted or got angry, just raised or lowered his voice within a narrow range, the slightest change in cadence to get his point across. “Look at what those guys have just done. And you’re making pretend you’re working out!” There wasn’t a day I didn’t throw up after practice, sick from the effort.

One day, he’d make the sprinters run a mile, far more than we liked. We’d tell him what we thought, but we knew we were in the hands of a genius. We wanted to please him. Even during winter, he didn’t let up. He’d make us run lap after lap around the school parking lot, set on a hill and whipped by the wind. We kept our heads down to make sure we didn’t slip on the ice. He stood against the wall, bundled up in his coat, hat, and gloves, smiling and clapping us on. Our high school had no special facilities, but while our rival teams were doing nothing during the winter, we were training in harsh conditions. When spring came, we were ready. We never lost a meet.

Whether he was coaching future Olympians or boys joining in from the bench, Coach Armstrong treated all of us the same, communicating a simple and consistent message, “Run as well as you can,” to satisfy the demands of the training schedule he designed. He didn’t terrorize or cheerlead. He let us figure out what we wanted. In his entire career, his teams lost just four times: 186–4.

In 1963, we were the Pennsylvania state champions in the mile relay and invited to compete in a special event in New York City at the 168th Street Armory. On the bus ride there, I sat, as usual, next to my best friend, Bobby Bryant, a six-foot African American superstar. Bobby was so warm and kind that it would take him forever to get through the school cafeteria because he had to stop and joke with every table. School was a struggle for him academically, but on the track, he was magic. His family never had much money, so I bought him a pair of Adidas spikes with the money I made working. It was a gesture of friendship, but also more than that: Bobby running in a great pair of spikes made all of us look good.

Six teams lined up in the final. I always ran the first leg, and I never passed the baton in second place. When the gun went off, I broke out in front. But coming around the first curve, I felt my right hamstring rip. The pain was sudden and excruciating. I had a choice: I could pull over and stop, the sensible choice for my body. Or I could continue and find a way to keep us as close as I could and give us a chance to win.

I drifted to the middle of the track, forcing the runners behind me to find a way around. I gritted through the remaining distance, choking down the pain and watching my competitors sprint ahead. I passed the baton to our second leg runner twenty yards behind the leader. I limped to the infield, bent over, and vomited. I had done all I could, but there was no way we could make up the distance. I had imagined victory and worked ferociously to ensure it. I had put in those hard and lonely laps through the winter. Now I was certain we would lose.

But as I stood there, my hands on my knees, I heard the crowd stirring, shouts bouncing off the brick walls. My teammate running the second leg was starting to gain. Then our third runner closed the gap further. The spectators in the balcony took off their shoes and started banging them on the metal panels lining the track. After the third leg, the gap was down to twelve yards, still a huge distance to make up. Brooklyn Boys High School had their best runner, the best runner in the city, waiting to grab the baton. Oli Hunter was six feet three inches tall with a shaved head, wide shoulders, a tapered waist, and extremely long legs, perfectly engineered to run. He had never been beaten in any competition. Our final leg runner was Bobby.

I watched Bobby take off on the flat, wooden armory floor, his eyes wild with intensity, focused on Hunter’s back. Stride by stride, he reeled him in. I knew Bobby better than anyone else, but even I couldn’t tell where he got that combination of spirit and strength from. Right at the tape, he lunged forward to win. He did it! The crowd went wild! How could that possibly have happened? It had been a superhuman effort. Afterward he came over to me in the infield. He put his big arms around me and hugged me. “I did it for you, Steve. I couldn’t let you down.” Training and competing together, we made each other better.

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During my senior year, I realized that Harvard was the best-known Ivy League university in America. I believed that my record merited my admission. As it turned out, Harvard didn’t agree. They put me on the wait list. Coach Armstrong suggested I go to Princeton to run track and even arranged for it. Like a petulant teenager, I said no because I thought Princeton wanted me just for my athletic ability. I won a place at Yale, but Harvard was a fixation, part of the vision I had for myself. So I decided to call the head of admissions at Harvard and convince him to admit me. I found his name and the central phone number for the admissions department. I brought a pile of quarters with me to school to use in the pay phone. I didn’t want my parents to hear me make the call; it was something I needed to do on my own. I was practically shaking with fear as I dropped the coins into the phone, one by one.

“Hello, I’m Stephen Schwarzman from Abington High School in Abington, Pennsylvania. I’ve been accepted by Yale, but I’m on your waiting list, and I’d really like to go to Harvard.”

“How did you get to me?” asked the dean. “I never talk with students or parents.”

“I asked for you, and they put me through.”

“I’m sorry to say we’re not taking anyone from the waiting list this year. The freshman class is full.”

“That’s really a mistake,” I said. “I’m going to be very successful, and you’ll be very happy that you accepted me at Harvard.”

“I’m sure you’ll be successful, but Yale is a lovely place and you’ll enjoy it and have a good experience there.”

“I’m sure I will,” I said, persisting. “But I’m calling because I want to go to Harvard.”

“I understand that, but I won’t be able to help you.”

I hung up the phone and practically collapsed. I had overestimated my ability to sell myself. I accepted my rejection and resigned myself to my second choice: Yale.

In the final speech I made as student council president, I laid out a philosophy on education that has remained remarkably consistent throughout my life:

I believe that education is a discipline. The object of this discipline is to learn how to think. Once we have mastered this we can use it to learn a vocation, appreciate art, or read a book. Education simply enables us to appreciate the ever-changing drama fashioned of God’s own hand, life itself. Education continues when we leave the classroom. Our associations with friends, our participation in clubs all increase our store of knowledge. In fact, we never stop learning until we die. My fellow officers and I just hope that you will become aware of the purpose of education and follow its basic tenets, questioning and thinking, for the rest of your life.

That summer, as my father drove me back from summer camp where I had been a counselor, he told me that I was entering a world he knew nothing about. He knew no one at Yale or anyone who had been to Yale. The only help he could give me in this new world was to love me and let me know I could always come home. Other than that, I was on my own.

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Freshman year at Yale, I shared two bedrooms and a study with two roommates. Luckily, I got the single bedroom. One of my roommates was a private school boy from Baltimore who pinned a Nazi flag to our living room wall. He had a glass case where he kept Nazi medals and other paraphernalia from the Third Reich. Every night we went to sleep to the sound of an album called Hitler’s Marching Army. My other roommate didn’t change his underwear for practically the entire first semester. College was a real adjustment for me.

Commons at Yale is a soaring brick building in the middle of campus. It was constructed in 1901 for Yale’s two-hundredth anniversary. It seemed like a train station full of...

Table of contents

• Cover
• Made, Not Born
• Part I: Remove the Obstacles
• Part II: Pursue Worthy Fantasies
• Part III: Seeing Around Corners
• Part IV: Sprinting Downfield
• Photographs
• Acknowledgments
• About the Author
• Index
• Copyright