Billionaire Blackstone founder Steve Schwarzman says a leader's most important trait is a clear view of their firm's purpose


Steve Schwarzman

  • Steve Schwarzman, the billionaire founder and CEO of US private equity giant Blackstone, says the most important trait a leader can possess is having a firm view of their organization’s purpose.
  • Schwarzman, who founded Blackstone in 1985, has a net worth of roughly $18 billion.
  • He also touched upon AI’s impact on the world, describing its influence on the Chinese venture capital industry as “profound.”
  • Visit Business Insider’s homepage for more stories.

Billionaire Blackstone founder Steve Schwarzman has revealed the most important trait he thinks a leader can possess.

Speaking to Business Insider about leadership and technology, Schwarzman was asked what he thinks the most important leadership trait is. He said: “A firm view of what the purpose of your organization is, and where the world is going.”

Schwarzman also talked up the merits of being a nice person — something that might raise the eyebrows of his critics. He has been quoted by the WSJ as wanting to “inflict pain” on his rivals.

He added: “You need to articulate for everyone what your core values are, and where you want the organization to go. You’re in the business of defining values and norms and objectives.

“If you do that well, plus you’re a nice person – because you have to convince people to join the journey, and that it’s worthy and exciting for them, and beneficial for them and society – that’s what you have to do to be a leader.”

The 72-year-old founded Blackstone, the US multinational private equity and asset management giant which manages over half a trillion dollars in total assets, in 1985. His net worth is around $18 billion, according to the Bloomberg Billionaires Index.

Schwarzman said he also looks for a wealth of other traits in prospective employees.

“[Employees I hire] have to be smart,” he said. “They have to be intellectually flexible. They have to like the world of lifetime learning. They have to be transparent. They have to have high integrity. They have to believe in meritocracy. They have to like – not to disguise it – they have to like hard work. They have to have unimpeachable integrity.”

Big business names Schwarzman has hired include Jon Gray, the firm’s current COO – a fellow billionaire and the chairman of hotel and hospitality giant Hilton – and its CFO Michael Chae, a former director at US data giant Nielsen.

“Everybody I hire needs to have those things, and if you don’t, you can’t be here [at Blackstone]. The other thing you have to have is [to be] a nice person.

Asked to elaborate, he said: “They’re not difficult; they’re cooperative; they’re open; they’re honest. They have good motives, and they believe in what the organization is trying to achieve. You can define nice yourself, along with [not having] anger, or resentment, or hostility towards others. [It’s] somebody you’d like to spend time with.”

FILE PHOTO: The ticker and trading information for Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) April 4, 2016. REUTERS/Brendan McDermid/File Photo

Though Blackstone has enjoyed extraordinary success in business terms, its business practices are not without criticism. In March, the United Nations accused Blackstone, which is also one of the world’s major corporate residential landlords, of contributing to the global housing crisis by inflating rent prices and charging unnecessary repair fees.

Blackstone is investigating the ethical implications of AI

Schwarzman gave his views on AI’s impact – and potential impact – on the venture capital industry. Blackstone donated a record £150 million ($200 million) to Oxford University to investigate the ethical implications of AI use.

Schwarzman said the rapid emergence of AI in China was remarkable.

“It’s profoundly changed the venture industry in China,” he said. “The amount of money proportionately that’s going into AI in China is very, very large, whereas, in the United States it’s been slower in terms of allocation because, in the United States, there have been lots of ways to very productively make money in the venture business.”

According to research by CBS Insights, the proportion of money invested by the US in artificial intelligence has fallen relative to the rest of the world, just as China’s proportional investment in AI has grown.

Although China accounted for just 10% of global AI deals in 2017, Chinese AI startups nabbed 48% of all AI funding dollars that year, exceeding the funding taken by US AI firms funding for the first time.

Schwarzman added: “Some of the [US] AI developments are a lot different than, for example, developing apps, which are very low-money and yield very substantial profits for the people involved. So I think that will change over time when AI becomes more widespread in the States.

“The whole sort of coordinated infrastructure that’s developing in China hasn’t really happened here yet. I think that, for reasons of competitiveness globally, that should happen in the West generally.”

SEE ALSO: Blackstone CEO Stephen Schwarzman shares the interview questions he asks to find out if an executive job candidate is ‘a perfect 10’

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